‘Moving sideways’: Emissions stuck in Morrison era

In June 2022, barely a month after Labor defeated the Morrison government in what has been billed as the climate election, Chris Bowen, the new minister for climate change and energy, offered cautionary words to a conference of renewable energy investors.

Emissions reduction targets, he said, “are easier set than met”.

Labor’s target was substantially more ambitious than that of the previous government. Where the Coalition had promised to cut emissions by 26 to 28 per cent by 2030 compared with 2005 levels, the new government promised 43 per cent.

Now the government is about to set a new 2035 emissions reduction target, as required under the United Nations Framework Convention on Climate Change, under which all nations are expected to increase their goals every five years.

Australia must submit its new nationally determined contribution – as it is termed – by next month, and it’s expected to be well north of 60 per cent. In a report last year, the Climate Change Authority, which advises the government, indicated it was considering a target of between 65 and 75 per cent reduction on 2005 levels. It is doubtful whether the Albanese government will be so bold.

Last month, in response to pressure from the UN to “go big”, Bowen repeated exactly what he said in 2022: “Targets are easier set than met.”

As well he might, for there is concern among experts and industry representatives that Australia will not meet its 2030 commitment, much less a more ambitious 2035 target.

Australia has barely reached the level of emissions reduction that the Morrison government committed to, says Frank Jotzo, professor of environmental and climate change economics at the Australian National University Crawford School of Public Policy.

“We’re sitting at minus 28 per cent or thereabouts, and we have been sitting at that for the last three years,” he says.

“Emissions are just moving sideways. And so it’s a really steep hill to climb from here to 2030.

“The government’s projections, the official projections, have us just about meeting the target. But those projections assume a really dramatic decline in electricity sector emissions just before 2030,” says Jotzo.

That in turn assumes a lot of fossil fuel generating capacity will be replaced by renewables. The government’s 2030 emissions reduction target is predicated on having the power grid running on 82 per cent renewable energy by 2030, to cover for other sectors of the economy – such as industry, agriculture and transport – that are harder to decarbonise.

In the view of many, progress towards getting those new projects built and connected to the grid is not nearly fast enough – as evidenced last Friday, in the latest quarterly report by the Clean Energy Council (CEC), which represents more than 1000 businesses involved in large-scale solar, wind and rooftop solar projects.

“For the second consecutive quarter in 2025, Australia has seen weaker investment in new renewable energy and storage projects, following subdued investor confidence earlier this year,” it said.

In the first half of this year, the CEC report said, “the total amount of renewable energy generation financially committed … [was] only a third of the 6-7 GW annual pace required to replace aging coal and meet the nation’s 82 per cent renewable energy target”.

The May federal election almost certainly had a lot to do with this. The Peter Dutton-led Coalition was notably hostile to renewables. It would have slashed Labor’s 82 per cent target to 54 per cent, so as to accommodate a fleet of wildly expensive, taxpayer-funded, slow-to-deliver nuclear power plants. While those nuclear facilities were being built, the plan was to extend the life of coal-fired plants.

No wonder, then, that the prospect of a Dutton government created “a great deal of uncertainty for renewable energy projects”, says Anna Freeman, general manager of advocacy and investment with the CEC.

“If governments signal an intent to throw money at coal-fired power stations to keep them open for longer, that dampens the market signals for new supply to come in and makes it harder to justify investment in new power plants. So, it’s not surprising to see investors hang back in those circumstances,” says Freeman.

With the Coalition parties now consigned to opposition, federally, for at least the next three years and likely the next six, confidence is returning, she says. There is a long pipeline of potential developments and “tremendous goodwill”, she says.

Further evidence of this comes from another major industry body, the Clean Energy Investor Group, which surveyed its members in July and found 90 per cent saw the re-election of the Labor government as a “positive catalyst” for greater investment.

However, says the group’s chief executive, Richie Merzian, significant hurdles remain, which must be overcome if the government’s 82 per cent goal is to be achieved.

“We’re doing okay,” he says. “We have over 40 per cent renewables in the national electricity market right now. But are we seeing sufficient investment to get us to almost twice that? Not right now.”

The biggest problem is the time it takes to get new developments approved.

“It is taking way too long to turn investment into clean energy,” says Merzian. “Way too long to get state planning approvals, way too long to do assessments under EPBC [the federal Environment Protection and Biodiversity Conservation Act] and, given that more than 70 per cent of the investment for our clean energy comes from overseas, way too long to get Foreign Investment Review Board assessments.

“It’s taking nine or 10 years to get a wind farm completely from investment to delivery.”

The same complaint about delays to development due to excessive red tape was made by the Productivity Commission in its report ahead of this week’s Economic Reform Roundtable in Canberra.

It is made, too, by Climate Council economist Nicki Hutley. The timeframes for approvals, she says, are a major factor in pushing up development costs.

“When somebody’s had nine years of carrying costs, their rate of return has dropped astronomically.

“And so the cheapest form of energy, renewable energy, is no longer so cheap, and that’s just adding to the cost for all of us,” says Hutley.

To date, progress has been maddeningly slow. Comprehensive overhaul of the EPBC Act, for example, has been advocated by multiple reviews, most recently the Samuel review in 2021, which found it unfit for purpose.

The Albanese government came to power in 2022 promising reform of the act but failed to deliver. The current environment minister, Murray Watt, said he would introduce legislation before the end of next year to streamline the EPBC regime’s byzantine processes, such that it will be able to deliver “a quick yes or a quick no” to renewables projects.

The varying requirements of state governments add further complexity, even where the states are positively disposed to renewables – and some are not. The new Liberal National Party government of Queensland stands out as an example of wilful obstructionism, says one senior industry source.

“Queensland was a bright spot for investment for renewables up until the state election last year,” they say, adding that the state was “hands down the favoured location for investment for renewables, because the resources are great and it had, generally speaking, a fairly receptive planning regime”.

But the new government dumped the state’s renewable energy targets of 50 per cent by 2030 and 80 per cent by 2035, pushed through legislation making it harder for new wind and solar projects to get planning approvals and extended the life of the existing coal-fired Callide B Power Station. The source described the attitude of the LNP as “openly hostile” to clean energy.

Elsewhere in the country, too, closure dates for several old coal-fired power stations have been pushed out – among them Eraring in New South Wales and Loy Yang A in Victoria. The reason, in part, is delays in the construction of transmission lines and in the connection of renewables to the grid.

Last month, the Australian Energy Market Operator (AEMO) announced that the $3.2 billion VNI West transmission project linking Victoria and NSW would not be completed until 2030, instead of 2028. Reporting this delay, the authoritative website devoted to the clean energy transition, RenewEconomy, listed a host of other projects beset by delays and/or cost blowouts “including Project EnergyConnect linking South Australia to NSW, the Marinus Link from Tasmania to Victoria, Humelink from NSW to near the Victoria border, and the Copperstring project in north Queensland…”

The bottom line is that Australia still has a great deal less clean energy in the system and more dirty fossil fuels than the official forecasts would have us believe, says Dylan McConnell, an energy systems researcher at UNSW Sydney.

There are, he says “two incompatible stories” about the national energy transition. One tells of record investment “in the pipeline”, and the other tells of “what’s actually being delivered into the system today”.

“But we’re actually not getting the stuff in the ground, generating and reducing emissions.

“If you compare what they said we would have done in the electricity sector in the past 12 months with what actually happened, we’re well behind.

“On the coal front, we’re about 10.8 terawatt-hours higher than we were projected to be. On the renewable front, we’re about 12TWh short of where [AEMO’s 2024 projection] said we would be.

“So, on those metrics, we’re definitely not on target.”

At least emissions have gone down in the electricity sector, by some 43 million tonnes. In most other areas they have gone up.

Between 2005 – the baseline year for Australia’s emissions reduction target – and 2023, overall emissions have fallen by 170 million tonnes. So-called fugitive emissions have increased by five million tonnes, however. For industrial processes, they’re up three million tonnes.

In the transport sector, they have increased by 15 million tonnes, partly driven by population increase but also due to consumer preference for bigger, heavier, fuel inefficient SUVs and utes.

Australia now has vehicle emission standards in place, which should gradually shift the balance towards electric vehicles. But it will be a slow process, because cars have a long lifetime. On average a new internal combustion car sold this year will still be on the road in 15 years, meaning we will not see substantial reductions in transport emissions until well into the 2030s.

Had Australia not lagged behind the rest of the developed world in implementing efficiency standards, it might have been different, says Bill Hare, chief executive of the global science think tank Climate Analytics.

Speaking to The Saturday Paper from Berlin, he says the government’s standards were not aggressive enough. “And they also have not ... put forward targets for heavy duty vehicles, trucks and buses.”

In Europe, he says, “electric trucks are everywhere”.

Emissions from so-called stationary energy have gone up 21 million tonnes, largely due to expansion of gas extraction and the processing of liquefied natural gas for export.

Indeed, analysis recently released by research and advocacy group Market Forces showed more gas was used just to operate LNG export terminals than is used by Australia’s entire manufacturing sector.

The lion’s share of Australia’s claimed net emissions reduction – 163 million of the 170 million tonnes – has come from the sector called Land Use, Land-Use Change and Forestry (LULUCF), which relates to how land management practices and activities affect greenhouse gas emissions and removals.

And there are big questions about just how real those LULUCF reductions are.

“The bulk of the 28 per cent [emissions reduction] achieved so far is from reduced land clearing and forest thickening between 2005 and 2013 thereabouts,” says Frank Jotzo.

“We got really big reduction in annual emissions during that period where land clearing was curtailed. Also, in the base year of 2005, we were coming out of that millennial drought, and more carbon [was being absorbed in] standing forests … so that was kind of a one-off benefit.”

Land use, he says, is a “wild card” in that it depends heavily on the weather.

“And very little is happening anywhere else in the economy.”

But what of the government’s safeguard mechanism, which requires Australia’s biggest climate polluters to progressively cut their emissions?

It is ineffective, says Jotzo, because these companies meet their obligations by buying carbon credits rather than reducing their actual emissions.

The price of those credits, in his view and that of others, is far too low to encourage actual abatement.

“In order to drive real reductions in emissions, the price of these credits should be at least US$60, and probably higher than that,” says Professor Andrew Macintosh, of the law school of the Australian National University. “And what’s the current carbon price in Australia? About US$20, right? It’s absurd.”

Furthermore, he says, many of the offsets are “junk”.

“They don’t represent additional real and additional emission reductions.”

It needs to be said that his views are controversial, but the fact remains that the offsets regime means that industrial polluters are able to escape the expense of changing their processes so as to emit less.

Many in the environment and climate movement see the use of offsets as a form of greenwashing. A few large businesses operating in Australia, such as the homewares/furniture maker Ikea, mining company Fortescue and construction and property company Lendlease, have committed to “real zero”, or no carbon emissions.

“The majority of the climate movement would say that offsets are extremely problematic from a number of perspectives,” says Nicki Hutley, “but particularly when you pay people to not clear land that they probably wouldn’t have cleared anyway.”

In summary, she says, the picture is grim, not just for Australia but for the world.

“The science tells us in no uncertain terms that we need to be at net zero by 2035.”

The indications are that Australia will struggle to meet even its current 43 per cent target, much less a more ambitious 2035 target.

As Chris Bowen is wont to repeat, emissions targets are easier set than met.

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