Australia's NSW's climate goals need policy support

Australia's New South Wales (NSW) state is unlikely to meet its 2030 and 2035 targets of cutting emissions by 50pc and 70pc from 2005 levels without policy changes, the state government-owned Net Zero Commission stated in its 2026 Annual Progress Report today.

The decarbonisation rate in 2023-30 needs to be at 5.5mn t/yr of CO2-equivalent (CO2e), more than 2.5 times faster than the 2.1mn t CO2e/yr achieved in 2004-23.

The rate is higher than an earlier pathway the commission indicated in March. NSW will now need to reduce its annual emissions by 38.5mn t of CO2e by 2030 from 2022–23 levels to reach its legislated target, and by a further 30.4mn t CO2e by 2035.

The trajectory is steeper in-part because reported emissions increased by 7mn t CO2e between 2021–22 and 2022–23, driven by growth in transport, resources, and agriculture alongside declining land-sector carbon storage. Only data up to 2023 was available when the commission produced the report.

"Although the direction is clear for NSW to achieve the 2030 target, the renewable roll-out is behind schedule and delayed closures of coal-fired power stations strongly impact emissions," the commission said.

NSW must accelerate energy development approvals to build sufficient renewable generation, storage, and transmission capacity to maintain system security as coal-fired power stations close.

The NSW government tabled legislation in May to fast-track approvals for priority renewable generation, storage and transmission projects as it seeks to replace retiring coal-fired generation capacity.

The state should also back electrification by supporting a faster rollout of EV charging networks and introducing requirements for new industrial loads, such as data centres, to rely on additional renewable energy sources from the outset, the commission said.

The commission explicitly warned that continued expansions of coal mines and the rapid growth of energy-intensive data centres pose a significant risk to the state's climate goals.

It noted that coal mine extensions are "not consistent" with legislated targets, while the Australian Energy Market Operator (Aemo) forecasts data centres will add 8TWh to annual NSW electricity demand by 2035, equivalent to 13pc of current demand.

Apart from electricity, the government must prioritise cutting methane pollution, which accounts for 30pc of the state's emissions.

This can be achieved through practical solutions in the livestock, coal mining, and waste sectors, including scaling feed additives, increasing landfill gas capture, and mandated on-site abatement at mines, the commission said.

The advice follows the March release of the NSW Environment Protection Authority (EPA) rules requiring underground coal miners to cut methane emissions.

The government has also recently supported emissions reductions through new investment in clean manufacturing and projects to expand domestic production capacity and attract investment into sectors including biofuels and renewable energy.

By Lawrence Wen