Australia's governing Labor party's second majority term could mean that changes to the offshore permitting regime promised last year are signed into law, while east coast LNG businesses will avoid a planned reservation system proposed by the opposition.
Labor's victory at the 3 May election combined with the election of fewer members from the Greens party and climate-focused independents, could mean it faces less pressure to cancel fossil fuel projects.
But it will remain reliant on the Greens to pass laws through the nation's upper house — the senate — meaning Labor may need to negotiate the passage of bills with the leftist party if the Liberal-National-based coalition opposes its measures.
The Greens ran on a promise to ban new coal, oil and gas projects but won fewer seats than in 2022 because of preference flows.
A federal decision on the lifetime extension of the Woodside Energy-operated 14.4mn t/yr North West Shelf (NWS) LNG delayed by Labor, is now looking more positive for the firm. The firm sees approval as vital to progressing its Browse gas development offshore northwestern Australia.
Voters' rejection of the opposition Coalition on the nation's east coast means its policy to reserve a further 50-100PJ (1.34bn-2.68bn m³/yr) from the Gladstone-based LNG exporters will not proceed.
The result provides an opportunity for certainty and stability for the energy sector, upstream lobby Australian Energy Producers said. The group urged the government to focus on new supply as Australia's gas reserves for domestic use rapidly deplete.
The government will need to specify exactly how it aims to secure supplies to ensure stable supply, once coal-fired generators retire at the end of the 2020s and into the 2030s. This is because the nation's integrated system plan is based on Labor's policy of reaching 82pc renewable energy in the power grid, backed up by about 15GW of gas-fired power.
Industry will await further direction stemming from the Future Gas Strategy which canvassed solutions to Australia's declining gas supply including new pipelines, storage and seasonal LNG imports.
Permitting concerns
In the government's previous three-year term, a series of court-ordered requirements to consult with affected Aboriginal groups briefly disrupted multi-billion dollar LNG developments. Labor promised to specify through new laws exactly which groups must be consulted before approvals could be granted.
But these were dropped from the agenda in early 2024 following opposition by the Greens. Labor's resources minister Madeleine King blamed the Greens for obstructionist manoeuvres on this legislation, but it remains unclear if and when Labor might introduce such laws.
Conversely, the Coalition promised to end government support for anti-gas lobbies such as law group the Environmental Defenders Office — set to continue under Labor.
In liquid fuels, Labor's victory should boost Australia's electric vehicle (EV) sales, with emissions standards laws set to remain enforced.
The Coalition had said it would soften the laws because of concern over cost of living pressures. Plans to temporarily cut the fuel excise will also not progress.
Australia's EV take-up has stalled, and industry has blamed this on poor investment in recharging infrastructure and other policy settings, including the removal of the fringe benefits tax exemption for plug-in hybrid car models.
A re-elected Labor government is likely to further policy towards a mandate for sustainable aviation fuel or renewable diesel, given the growing share of Australia's emissions projected to come from the transport industry.
It pledged A$250mn ($162mn) for low-carbon liquid fuels development in March, for low-carbon liquid fuels development in March, as part of its commitment to the nascent sector.
Local market participants are optimistic that further biofuels support will be provided as urgency to meet net zero ambitions builds, including a 2030 target of 43pc lower emissions based on 2005 levels.
About A$6bn/yr of feedstocks like canola, tallow and used cooking oil are exported from Australia, while existing ethanol and biodiesel producers are running underutilised plants, making about 175mn litres/yr at present, because of poorly-enforced blending mandates.
