In 2022, gas contributed about 20 per cent of Australia’s emissions, based on Australian Government data.
Besides the emissions released when gas is used, emissions are also released during gas extraction, transport and – in the case of gas exports – during the process of liquifying it.
Climateworks Centre’s most recent decarbonisation scenarios show how this might change in a future where Australia reduces its emissions in line with the Paris Agreement.
Our report on the scenarios includes this graph, which shows a huge reduction in gas use for electricity generation over the next two-and-a-half decades.
Gas use in electricity declines similarly in the 1.5ºC and well-below-2ºC scenarios, showing that reducing gas use is a no-regrets option.
What little gas remains in the electricity system is used for ‘firming’ – switching on infrequently to secure supply to the grid on rare occasions when demand exceeds supply.
The above graph only shows gas used in electricity generation. Electricity is one of three sectors that make up the bulk of gas use in Australia, the other two being buildings and industry.
This graph shows the change in gas use in both our scenarios across these three sectors:
The four main ways this reduction in gas use happens are:
- electrification,
- energy efficiency,
- the use of alternative fuels
- and some reduction in activities that use gas.
Residential and commercial buildings move away from gas
Gas is currently used in both residential and commercial buildings for heating, cooking and hot water.
In our scenarios, Australian buildings move from gas to electricity for these purposes.
Similar to the electricity sector, this transition is a no-regrets option, with gas use declining at a similar rate in both the 1.5ºC and well-below-2ºC scenarios.
Changes in how buildings are constructed and renovated also mean buildings will be more efficient and use less energy overall.
By 2050, Australian homes are off gas completely.
What little gas use remains in the building sector is in commercial buildings – and this is greatly reduced compared to 2025.
Industry uses replacement fuels and processes
Electrification and energy efficiency are two ways that gas use is reduced in the industry sector – but there are others.
While many gas-using industrial processes can potentially be electrified, others will switch to alternative fuels such as biomethane and green hydrogen.
More gas is used in industry in our well-below-2°C scenario compared to our 1.5ºC scenario.
This is because our model tries to find the least-cost pathway to reduce emissions across the whole of the economy, and switching from gas in industry is more expensive than in other sectors.
To reduce emissions in line with limiting warming to 1.5ºC and prevent the worst effects of climate change, more action is needed to support industry’s switch away from gas.
Reduction in gas exports contributes to lower emissions
Decarbonisation scenarios by the International Energy Agency show a decline in the use of gas globally.
We reflect that in our scenarios by reducing Australia’s exports of gas over time.
This means lower gas use and emissions from gas domestically, as the process of extracting gas and liquifying it for export uses a lot of gas.
This includes gas that is lost to the atmosphere during production and transport, known as ‘fugitive emissions’.
So, as less gas is consumed locally and globally, Australia produces less gas – and less is needed to produce it.
Even greater reductions in gas use are possible
While each of our scenarios is designed to show a possible future where Australia decarbonises while minimising costs, there are opportunities for even greater reductions in gas use.
Our AusTIMES model doesn’t yet fully account for the benefits of demand management, which shifts when some energy is used to even out demand on the electricity system – reducing the need for firming.
One thing is clear from our scenarios – reducing Australia’s gas use is a key element of Australia delivering on its climate commitments and playing its part in limiting global warming.