The Australian Government is developing a Future Gas Strategy, that will provide a medium (to 2035) and long-term (to 2050) plan for gas production and consumption in Australia.
Climateworks supports the development of the Strategy with the end goal of phasing out gas in line with a fully decarbonised economy.
Modelling conducted by the International Energy Agency [PDF] notes that, to achieve their net zero emissions scenario, no new long-lead time upstream gas projects can be approved after 2023.
Jurisdictions across Australia have acknowledged the need to prevent the expansion of gas use and long-lived gas infrastructure to achieve legislated emission reductions targets, such as through Victoria’s Gas Substitution Roadmap.
The development of the Strategy provides a crucial opportunity to plan for an economy-wide reduction in the use of gas, given the emissions associated with its extraction and use, as all sectors decarbonise to meet Australia’s emissions reduction obligations.
This is especially urgent given the window to keep global warming within 1.5 degrees is still open, but narrowing. Climateworks has conducted additional modelling on gas use in Australia beyond that which is included in this submission.
Climateworks recommends that the Government:
- Ensures that the primary objective of the Strategy is to phase out Australian gas use and production in line with a least cost pathway to net zero emissions.
- Includes within the Future Gas Strategy an explicit decarbonisation objective of supporting transformative economic change in line with the Paris Agreement goals of limiting global warming to well-below 2°C and striving for 1.5°C.
- Develops a plan to support the orderly phase out of gas use in the electricity sector including through better use of demand-side energy management to support the provision of affordable and reliable energy services and ensure Australia can fully decarbonise its economy.
- Aligns the Future Gas Strategy, National Energy Performance Strategy, National Construction Code, and Trajectory for Low Energy Buildings to transition towards efficient all-electric buildings.
- Prioritises investment and policy options within the Strategy that favour electrification, particularly in buildings, over ‘green gas’ distribution, in order to reduce costs over the longer term.
- Implements programs via the Built Environment Sectoral Plan to upgrade building thermal efficiency to manage household energy demand and allow for efficient decarbonisation of the buildings sector.
- Works with industry and financial institutions to design holistic programs to support transitioning households away from gas, by prioritising vulnerable households, incorporating health and productivity considerations in cost-benefit analyses, and providing households with information through ‘one-stop shops’.
- Designs the Strategy so that it supports a transition in industry away from gas production and use – and supports this transition in industrial activity and energy use coherently with other government initiatives. These include the work of the Net Zero Economy Taskforce, the Safeguard Mechanism, the National Reconstruction Fund and the Sectoral Plans for Industry and Resources.
- Redesigns the gas market to ensure an orderly transition as gas use phases out of many parts of the economy and introduce new rules to ensure the equitable phase out of gas assets that currently underpin the domestic gas system, including revaluing these assets and addressing how to phase out their use as they become redundant.
- Ensures the Strategy is coherent with the emerging work of the Net Zero Economy Taskforce and recognises the major changes in the industrial and energy workforces and supply chains that will be needed if Australia is to become a Renewable Energy Superpower.