How is Australia tracking in its emissions and renewable energy targets?

Decarbonisation is proving more challenging than anticipated.

On current trends, Australia will not only miss its renewable energy targets, but its carbon-intensive sectors such as electricity, transport and agriculture are well behind in cutting emissions as well.

This was the key takeaway from the Australian Financial Review’s Energy and Climate Summit.

Australia has fallen well behind the target of 82% renewables by 2030, which underpins the 43% emissions reduction climate goal specified as part of the Paris Agreement.

A combination of factors have been cited, including skilled labour shortages, supply-side pandemic disruptions, and planning approval bottlenecks.

But the bottom line is the current targets are almost unattainable without drastic change.

According to the latest trend baseline scenario released by the Albanese Government, the electricity sector needs to make a 55% reduction to its 2020 greenhouse gas levels by 2030, a commitment that outweighs all other sectors combined.

The energy sector’s target is 22% larger than the total reduction across the whole of Australia’s fossil-fuel-intensive economy. Emissions from the transport and agriculture sectors are also forecast to increase by 2030, not decrease.

While there was some optimism that the nation can still reach renewables targets, it is emissions and the outsized pressure on the energy sector that remains the biggest concern.

There are grave fears about rolling blackouts this summer in the eastern states, while WA is facing its own energy supply problems.

So how does Australia get back on track?

Speaking at the conference, Resources Minister Madeleine King and Energy Minister Chris Bowen flagged options the Labor Government is considering creating a clearer pathway – including a new “mid-term” emissions target for 2035.

Ms King confirmed the Government will adopt a new definition for ‘critical minerals’ along with potentially updating the list to include commodities such as coking coal, bauxite and iron ore which are crucial for trade partners.

“Our resources build cities, they build airplanes, ships and motor vehicles, and they will contribute to realising our own green energy aspirations and those of our trading partners,” she said.

Discussing the challenge ahead in meeting our renewable and emissions targets, Mr Bowen said the Government has asked the Climate Change Authority for advice on such a mid-term target, which would have to be announced before February 2025.

Mr Bowen acknowledged there are many companies investing heavily in renewables but not necessarily fast enough to cut emissions.

The Government also flagged ‘sectoral decarbonisation plans’ for so called “hard to abate” sectors such as electricity, energy, industry environment, agriculture and land, transport, and resources.

Ms King talked up carbon capture and storage as being vital to managing carbon in these sectors in her keynote speech to the summit.

She also pointed to the recent strengthening of the “safeguard mechanism” that kicked in from 1 July 2023, with increasingly tighter annual emissions targets.

Moving forward there is a call for greater collaboration between Government and industry, coupled with continued investment in sustainable energy infrastructure.

Such partnerships will give Australia a greater chance of achieving the ambitious net zero by 2050 targets currently in place, but they will take time to come to fruition.

In the meantime, the Australian Government will continue to straddle the line of being a reliable energy trade and investment partner, trying to shore up domestic and global energy security and accelerating decarbonisation.

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