Australia Lacks Coherent Plan to Meet Its Own Climate Targets

Australia has committed to net-zero emissions by 2050 and a 43% reduction in greenhouse gas emissions from 2005 levels by 2030, but has no comprehensive national strategy to achieve either goal, according to a new IEEFA analysis. Internal contradictions between government objectives — including on hydrogen, methane, electric vehicles, and energy efficiency — are creating confusion for industry and investors.

In the absence of a unified national energy transition strategy, scenarios produced by the Australian Energy Market Operator are being used by public and private stakeholders to guide planning and investment decisions, despite those scenarios being designed for narrower electricity and gas market purposes. The AEMO scenario assessed as most likely fails to meet Victoria's legislated emissions reduction targets, contains materially contradictory gas and electricity demand forecasts, and does not align with the government's 1.5-degree Celsius objective. Clean energy investors have separately questioned the assumptions underlying the only AEMO scenario modelled on 1.5-degree alignment.

IEEFA's analysis argues that the current approach prioritises supply-side energy solutions while insufficiently accounting for demand-side management and distributed energy resources. This creates risk of misallocation of capital and misalignment of regulatory decisions. The absence of shared national energy pathways means that different government departments and agencies are making independent — and sometimes contradictory — decisions about infrastructure investment, fossil fuel phase-out timelines, and resource allocation.

IEEFA calls for Australia to develop 1.5-degree-aligned national energy pathways that assess the energy transition in an integrated manner across all fuel types, sectors, and solutions — including both domestic energy needs and export-oriented projects. The pathways should explore a wide range of outcomes, distinguish between preferred and uncertain solutions, and provide actionable guidance on which new supply projects are essential and which infrastructure assets should be phased out and on what timescale. Multiple independent studies have concluded Australia would need to cut emissions by more than 60% by 2030 and reach net zero before 2040 to genuinely align with a 1.5-degree trajectory.

Key figure — 43% — Australia's legislated target to reduce greenhouse gas emissions below 2005 levels by 2030