A new report says Australia should embark on a swift phase-out of fossil fuels—improving energy security, bolstering its position as a Pacific leader, and helping to combat climate change.
The report from global research institute Climate Analytics models a fossil fuel phase-out for Australia, showing it’s possible, and setting out policy actions required across the economy.
It says Australia can bring fossil fuel use to zero by mid-century, in line with its stated international commitments to hold warming as close as possible to 1.5˚C.
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“The Australian Government has publicly backed a global transition away from fossil fuels more than once, first through the Global Stocktake agreed at the 2023 United Nations climate summit, and again last year when it signed the Belem Declaration,” report author Thomas Houlie said.
“Earlier this year, along with 50-odd other countries, it committed to developing a plan to phase out fossil fuels nationally. With this report, we’re showing the government and the Australian people how this national phase-out can be done.”
In the pathway developed by Climate Analytics, coal generation would end in 2034 and oil use would halve by 2035, with major reductions in fossil gas consumption. Renewables would generate virtually all of the country’s electricity by 2040, while transport and industry would switch almost entirely to electricity.
The report says Australia needs to cut production of coal and gas for export to reduce both the domestic emissions from producing those fossil fuels—and its global carbon footprint from exporting them. This would prevent the danger of infrastructure becoming ‘stranded assets’ as its trade partners also accelerate their transitions from fossil to clean energy.
While the government is officially targeting net zero emissions by 2050, the report shows that current policies would only halve gross emissions, leaving the other half to be ‘mopped up’ by unsustainably vast amounts of carbon dioxide removal (CDR) which would not be necessary under a rapid fossil fuel phase-out.
The UN Environment Programme recently warned that because governments including Australia’s have failed to cut fossil fuel use quickly enough, it is inevitable that global warming will overshoot the 1.5°C limit that governments collectively set at the Paris Summit in 2015.
“Overshooting the 1.5°C guardrail is in no-one’s interests, least of all Australia’s,’ Climate Analytics CEO Bill Hare said.
“It heralds an era of even more serious climate impacts and potentially catastrophic risks, and sounds a deafening klaxon on the need to cut and eliminate fossil fuels as quickly as possible. The sooner we get out of fossil fuels the less carbon removal we’ll need.
“Thanks to our incredible renewable energy resources, Australia is one of the lucky countries able to lead the race to a fossil-free future and a safer climate. Many of our closest allies are looking to us for that leadership—and if they don’t find it in Canberra, they’ll be looking elsewhere.”
The report says in order to decarbonise the power sector, the government needs to set clear and ambitious interim targets, with clear dates for the phase-out of its thermal power plants.
On transport, the government needs to set targets for sales of electric vehicles across vehicle types by 2035 at the latest, commit investment to expanding the charging network, and incentivise a shift from car and plane travel towards electrified rail.
Australia needs to grasp the nettle and implement a time-bound strategy for the decline and elimination of its huge fossil fuel exports, with a halt to new project, expansion and extension approvals and a plan for the retirement of existing ones before they become stranded.
The report also recommends converting the much-criticised Safeguard Mechanism into a proper compliance-based emissions trading system with a declining baseline, but—importantly—to heavily constrain the use offsets, providing the economic signals needed for industrial sectors to decarbonise.
“If the Safeguard Mechanism was working we wouldn’t see massive new gas projects like the Beetaloo go ahead,” Houlie said.
The government should also step up investment in CDR—not to compensate for ongoing emissions beyond 2050, but to reduce the atmospheric concentration of CO2, ending the inevitable period of overshoot, and bringing global warming back down below 1.5°C by the end of the century.
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On the international stage, Australia will be running the international negotiations at this year’s UN climate summit, held in Türkiye in November.
“National fossil fuel phase-out plans will be a central issue for the negotiations,” Hare said.
“If the Prime Minister hasn’t got a plan that stacks up at home and internationally by then, he can expect to cop a lot of grief for failing to deliver a credible response to a burning issue.”
