Australia maps out emissions reduction pathway

Chris Bowen has been appointed climate change and energy minister in the new Australian federal Labor government's cabinet, promising to push for a 2030 emissions cut of 43pc without halting all new gas and coal projects.

Bowen, who put together Labor's climate change policies, believes that he will not need to bow to the Australian Green party's demands to ban the construction of all new coal, oil and gas infrastructure in Australia, despite The Greens holding the balance of power in the upper house of parliament, the Senate. The Labor party plans to legislate for zero net emissions by 2050 but has workarounds to meet a 2030 emissions reduction target of 43pc of 2005 levels without passing legislation, which would need to be approved by the Senate.

This will allow Bowen to pursue Labor's climate change goals without neither having to negotiate with The Greens, which want a 74pc cut by 2030 and net zero by 2035, nor with the opposition Liberal-National coalition that had a 26-28pc target for 2030.

Bowen will rely on tightening the safeguard mechanism, which imposes emissions caps on Australia's 215 biggest polluters and on an A$20bn ($14.4bn) Rewiring the Nation fund that will expand the electricity grid so it can handle more renewables, which are expected to provide 82pc of power to the grid by 2030. The safeguard mechanism is designed to protect Australia's export gas and coal producers as they are trade exposed industries but will require them to work with the Clean Energy Regulator on a path to net zero using technology. Australia is one the world's largest exporters of LNG, thermal coal and coking coal.

Bowen will abandon the previous government's gas recovery plan including funding the A$1bn Kurri Kurri gas-fired power plant in New South Wales and accelerated development of untapped gas resources, such as in the Beetaloo basin in the Northern Territory.

He may be forced to quickly intervene in the domestic gas market possibly through the Australian Domestic Gas Supply Mechanism (ADGSM) that restricts LNG exports, as record-high prices are threatening industrial users on the east coast. The ADGSM mostly affects the 9mn t/yr Australia Pacific LNG, 8.5mn t/yr Queensland Curtis LNG and 7.8mn t/yr Gladstone LNG projects at Gladstone in Queensland, which could also be subject to an east coast gas reservation policy similar to the one in place in Western Australia.

Bowen has been scathing of the former government's plan to [invest over A$1bn in carbon capture and storage (CCS)](CCS) in the production of LNG and blue hydrogen from gas, saying that it is up to capital markets and the private sector to decide what to finance in this space. A lack of government funding could scupper the development of a large-scale blue hydrogen industry, although Bowen is more interested in promoting the development of green hydrogen production and export from renewables.

Bowen will work closely with the newly appointed resources minister Madeleine King, environment and water minister Tanya Plibersek and industry and science minister Ed Husic.

Bowen has pledged to hold the Cop 29 UN summit in Australia as Canberra seeks to build closer ties with its Pacific neighbours. China this week backed away from plans to implement a trade and security agreement with 10 Pacific Island nations after a consensus could not be reached. But China's interest in the region forced the new Australian foreign minister Penny Wong to visit several of the island nations, bringing a message of her government's new focus on the threat of climate change to the region.

By Jo Clarke