Australia faces uncertainty over climate credentials
Australia's Labor Party-led federal and state governments have advanced key policies over the past year that could help the country meet its 2030 emissions reduction targets. But increased climate opposition, looming national elections in 2025 and policies supporting fossil fuel use threaten to slow the momentum.
Canberra has moved to address the country's ability to meet its key 2030 target of renewables accounting for 82pc of energy use — a weak spot in its greenhouse gas (GHG) emissions reduction plan. The goal was looking increasingly unachievable without support so the government expanded its Capacity Investment Scheme (CIS), launching a first major 6GW tender in May. Tenders will run every six months until 2026-27 for a total of 32GW, consisting of 23GW of renewables — solar, wind and hydro — and 9GW of dispatchable capacity such as pumped hydro and grid-scale batteries, all to be in operation by 2030.
Australia could achieve a 42pc GHG emissions reduction from 2005 levels by 2030 under a scenario "with additional measures", which include the expanded CIS, the government's projections show. This would be just short of the legislated 43pc target, prompting ministers to assert the goal could be within grasp.
But the country must resolve problems arising from its increasingly constrained electricity grid, which have been compounded by slow planning and environmental assessment processes, in part because of rising community opposition. The renewables and transmission rollout has been slower than expected, and some states will be paying utilities to postpone the closure of coal-fired plants, raising concerns that any further extensions could impact the 2030 national target.
Australia also faces resistance in other key sectors. Canberra had to backtrack on fuel efficiency standards for new passenger and light commercial vehicles, meaning it may need to look at other options to cut emissions from transportation. This sector currently accounts for a fifth of Australia's total GHG emissions, but could be the largest source by 2030 as the electricity sector decarbonises.
Nuclear option
Labor, which governs Canberra and all Australian states and territories except Tasmania, faces rising competition in elections next year. The opposition Liberal-National coalition in June said it continued to support achieving net zero emissions by 2050, but warned that Labor's revamped 2030 targets could not be met. Labor's "renewables-only approach" raises supply security and cost issues, the opposition says. It promises instead to focus on a nuclear energy plan to bring state-owned reactors on line as early as 2035-37, if it is elected next year.
The opposition coalition has declined to set its own 2030 goal for GHG emissions cuts and is yet to provide more details about its plans, but its strategy of capitalising on the cost-of-living crisis and discontent over large-scale renewables and transmission projects across regional and rural communities seems to be working. Recent polls indicate lower approval ratings for prime minister Anthony Albanese.
Australia will join the UN Cop 29 climate conference in Azerbaijan in November looking to win its bid to co-host Cop 31 in 2026 with its vulnerable Pacific island neighbours. But uncertainty over its climate ambitions requires the country to assert its position as a new global climate leader and move on key issues agreed at Cop 28, including transitioning away from fossil fuels, as Pacific countries demand.
But Australia still sees gas playing a crucial, albeit reduced, role in its energy transition, and a new strategy in May stated the need to bring new gas supplies on line to keep domestic energy affordable and maintain Australia's status as a reliable LNG supplier. Almost 80pc of Australia's fossil fuel CO2 footprint in 2022 came from its exported carbon, non-governmental organisation Climate Analytics says.
| Australia's emissions | mn t CO2e | |||
| Sector | 2005 | 2020 | 2025* | 2030* |
| Electricity | 196.7 | 172.0 | 131.6 | 81.4 |
| Stationary energy | 82.2 | 99.9 | 101.9 | 96.4 |
| Transport | 82.0 | 93.2 | 102.2 | 101.6 |
| Fugitive | 42.8 | 53.6 | 49.8 | 46.5 |
| Agriculture | 86.0 | 72.6 | 79.0 | 79.8 |
| Industrial processes | 30.1 | 31.9 | 29.8 | 24.5 |
| Waste | 15.7 | 13.5 | 13.2 | 13.1 |
| LULUCF† | 80.7 | -42.5 | -55.3 | -57.1 |
| Total | 616.3 | 494.2 | 452.1 | 386.0 |
| Total WAM scenario‡ | 358.0 | |||
| *projected †land use, land-use change and forestry ‡with additional measures | ||||
| — Australian government | ||||
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Western Australia to allow some onshore gas exports
Western Australia to allow some onshore gas exports
Darwin, 19 September (Argus) — Western Australia's (WA) state government will allow onshore developers of gas fields to export about 20pc of their output as LNG during a five-year window, in response to a growing failure to bring on new supplies for the domestic market. WA previously banned onshore gas exports, except in the case of Australian independent Beach Energy's 250 TJ/d (6.7mn m³/d) Waitsia stage 2 project . Beach may be required to share its infrastructure with fellow Perth basin firms, the WA government said, to expedite market access for new projects. Australian mining firm Mineral Resources, which has argued for permission to export 85pc of the gas from its Lockyer project as LNG and fellow WA-based firm Strike Energy may benefit from the changes, as both hold significant reserves in the Perth basin. The changes apply to new onshore developments or existing projects seeking to expand production. Developers are required to reserve 80pc of gas produced for WA, with this rising to 100pc from 2031 onwards. The policy shift follows dire outlooks for WA's gas supplies as the state attempts to wean itself off coal-fired power generation. It currently contributes about a third of the electricity into the state's largest power grid. A parliamentary report last month warned WA cannot rely on sporadic appeals for more gas to meet demand. "These policy changes are sensible responses that balance the need for Western Australia to secure its energy future while encouraging onshore producers to bring on more gas supply as and when it is needed," mines and petroleum Minister David Michael said on 19 September. The 15pc reservation for offshore LNG projects will continue, while WA has promised more transparency on the policy with the publication of a yearly WA Domestic Gas Statement to reveal how producers are meeting obligations, with a review to take place after two years. An interim parliamentary report tabled earlier this year showed about 8pc of the state's offshore gas output has reached WA consumers since 2006, representing just over half the required volumes. Following public criticism of LNG producers' contributions, Australian independent Woodside Energy has since pledged an extra 32PJ (854mn m³) of domestic supplies by the end of 2025 . WA will also seek to strengthen laws designed to prevent companies banking prospective onshore oil and gas tenements, with a review into the "use it or lose it" policy to be led by the state's energy department. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Wash. regulators plan for cap-and-trade vote
Wash. regulators plan for cap-and-trade vote
Monterey, 18 September (Argus) — Washington regulators are making a "contingency" plan in the event of a successful repeal of the state's emissions cap-and-trade program. Initiative 2117, which looks to repeal the state's cap-and-trade program and prevent any similar program from taking its place, will be on state ballots for the 5 November election. "We are doing contingency planning in case the ballot measure passes and will update our covered entities when we do have information — and I know this initiative is creating a lot of uncertainty," said Stephanie Potts, senior planner with the state Department of Ecology today at the Argus North American Biofuels, LCFS & Carbon Markets Summit in Monterey, California. The agency also remains focused on continuing to implement the program, "assuming it continues," she said. Washington's "cap-and-invest" program requires large industrial facilities, fuel suppliers, and power plants to reduce their greenhouse gas emissions by 45pc by 2030 and by 95pc by 2050, from 1990 levels. The department is in an ongoing rulemaking process to expand and amend its carbon offset protocols, and also continues work to gather input for linkage with the Western Climate Initiative, a linked carbon market between California and Quebec. Potts said Washington expects to have a linkage agreement in place by the end of next year. The uncertainty introduced by the ballot initiative over the fledgling market's future has tempered carbon credit prices and activity this year. Argus assessed Washington carbon allowances (WCAs) for December delivery at $30.25/metric tonne on 4 March, their lowest price since the program's inception in 2023. The drop in prices at that time coincided with a statement by Ecology outlining how a successful repeal would end the agency's authority over the program. Earlier this year, the state Office of Financial Management (OFM) released a fiscal impact statement on a successful repeal that assumed an effective repeal date would be 5 December. By Denise Cathey and Jessica Dell Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil allocates R514mn to combat fires: Correction
Brazil allocates R514mn to combat fires: Correction
Corrects value of funding in headline and lead. Sao Paulo, 18 September (Argus) — Brazil will allocate R514mn ($94.3mn) to combat fires spreading across the country, presidential chief of staff Rui Costa and environment minister Marina Silva said this week. The funds are considered "extraordinary" and not a part of the country's overall budget because they are part of a special budget authorized by the supreme court to tackle climate change. Brazil is facing severe drought in all states but two, leading to fires in several regions. The flames are likely to cut the country's 2024-25 sugarcane output , while low river levels have roiled logistics . Part of the funds will be allocated to the environment ministry to reinforce monitoring and combating fires, Costa said. The federal police and the national public security force will also receive extra resources to reinforce investigations and battle environmental crimes. The armed forces will also receive some funds to support operations to extinguish the flames. Another portion will be earmarked to buy food for families in the north that are affected by the low water levels caused by droughts. The government will also issue another provisional measure this week to ease the release of resources from the Amazon Fund, Costa said. President Luiz Inacio Lula da Silva, supreme court chief justice Luis Roberto Barroso, head of the senate Rodrigo Pacheco and lower house speaker Arthur Lira all attended the announcement as a show of unity among the branches. Brazil is also considering increasing penalties for environmental crimes, which Silva considers to be "too low" at the moment. "The sentence of two to four years in prison is light," she said. "And some judges go further and completely relax this sentence." Brazil — which is trying to bolster its image as a climate leader — is also considering creating a climate authority and technical-scientific committee to "support and coordinate the federal government's actions to combat climate change." By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Hoekstra to face 'tough' EU parliamentary hearings
Hoekstra to face 'tough' EU parliamentary hearings
Brussels, 18 September (Argus) — EU climate commissioner Wopke Hoekstra, who has been nominated again for the role, is expected to face "tough" hearings in the European Parliament, according to a senior European official. The official told Argus that Hoekstra might have a "slight" advantage, as he underwent parliamentary hearings in 2023 when he took over fellow Dutchman Frans Timmermans' climate portfolio. At the time, Hoekstra was questioned extensively about past work with Shell and on climate issues. European Commission president Ursula von der Leyen put forward new commissioner candidates on 17 September, assigning Hoekstra the climate, net-zero, and clean growth portfolio. All candidates will undergo hearings before the EU parliament votes on the new commission line-up. Hoekstra has said he is "honoured and humbled", but formal appointment depends on how he performs during the hearings before the European Parliament's energy, environment and other committees. Hoekstra's mandate would include drafting legislation to enshrine a 90pc cut in greenhouse gas (GHG) emissions by 2040, from 1990 levels, into European law. The commission's 2040 target, revealed in February, referred to a "net GHG emissions reduction of 90pc". Hoekstra last year made a "personal" commitment to defend a "minimum target of at least 90pc" net GHG cuts. Von der Leyen has tasked Hoekstra with designing climate policies for the post-2030 period and developing an Industrial Decarbonisation Accelerator Act. Other key objectives include channelling investment toward net-zero infrastructure and ensuring revenues from the EU's emissions trading system (ETS) are used "effectively" to drive decarbonisation. Hoekstra's responsibilities extend to advancing a single market for CO2, boosting carbon removals for hard-to-abate sectors, and phasing out fossil fuel subsidies. Hoekstra would work closely with former Danish climate minister Dan Jorgensen, who is nominated for the energy and housing portfolio, if both are appointed. Jorgensen will be responsible for advancing the Electrification Action Plan for industrial transition and overseeing a roadmap to phase out Russian energy imports. He is tasked with ensuring the "full use" of joint procurement mechanisms, with a mandate to extend the current aggregated demand system from gas to include hydrogen and potentially other commodities. Supervising both Hoekstra and Jorgensen, in addition to von der Leyen, will be Teresa Ribera, Spain's former climate minister. Ribera has been nominated as executive vice-president for a clean, just and competitive transition. European Parliament officials expect to receive financial declarations and other procedural documents in the coming days. That will allow parliamentary committees to send written questions to Hoekstra and other nominated commissioners, officially kicking off the hearing process. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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