More needs to be done to increase decarbonisation

Authors: Professor Michael Brear and Alasdair McCall, University of Melbourne

 

How is Australia progressing right now on decarbonisation?

The latest report from the Net Zero Australia Project, titled Australia’s Progress to Net Zero by 2050, makes this assessment by comparing current actions against our previously published estimates of what’s needed to achieve net zero by 2050.

What is on track?

There’s some good news. Battery deployment is advancing rapidly and the pipeline suggests more than 4 times the capacity will be added annually over the next five years compared to 2024’s record high. This infrastructure didn’t exist in Australia a decade ago.

Household battery uptake is also encouraging. If 2025 deployment rates continue, they will play a significant role alongside the already very popular rooftop solar.

Perhaps surprisingly, electricity transmission is also being developed at a scale that is appropriate for the task. We need to roughly double the national transmission network by 2050, and the challenge now is speed of deployment. We’ll shortly find out if we can successfully navigate project delivery challenges.

Our modelling also shows absolute growth of about 100,000 workers is needed across the energy sector out to 2050. This is significantly smaller than historical absolute growth in several other sectors over the last 25 years and leads to roughly a tripling of sectoral employment from today. Whilst employment related to coal-fired power declines, jobs in renewables, gas-fired power, energy networks and others lead to net employment growth.

What is at risk?

We nonetheless need to be clear about our slow progress on the big-ticket items: emissions, investment and energy costs.

Although Australia’s greenhouse reporting shows a 26% reduction in emissions between 2005 and 2023, land use changes are responsible for most of it. These are not exactly nation building achievements.

Electricity generation is the only other sector to have achieved significant abatement, mainly because of renewables and the retirement of coal, but this has largely been offset by increases in other, growing sectors.

Second, investment and deployment is moving too slowly. Wind and solar build rates are plateauing and design and approvals have become a bottleneck, with the recently secured reforms to the EPBC Act hopefully going to help. But a lot of other investment is also required: EV charging and carbon capture and storage (CCS) networks to name just two.

And these investments need to be made at a time when average energy prices ($ per unit energy delivered) have risen 11%, 13% and 31% in real terms since 2015 for households/offices, transport and industry respectively. These increases can be much higher, depending on your own circumstances and particularly if you need gas for home heating or for industry.

And how do we get industry to do most of the future heavy lifting on decarbonisation, when price increases over the last 10 years means that they are often already struggling?

This is a conundrum. The current efforts to secure a future for the Tomago aluminium smelter is one case study of many ahead.

What is off track?

Two metrics are genuinely off track: land sector abatement and the firming of electricity by gas-fired generation.

Additional land sector abatement, particularly through reafforestation and regenerative agriculture, may need to be of order 100 times larger than today. This obviously needs serious long-term funding, coordination and regional planning. It also needs us to have a balanced view of the likelihood of significant land sector abatement compared to alternatives.

Priorities

We think that there are three, particularly urgent priorities that are additional to current policies.

First, the growing appreciation that CCS is an important complement to land sector abatement needs to become material. We need to capture CO₂ from industrial plant and other sites, transport it, store it or use it appropriately. This is enabling for the long-term viability of several industries and needs to start ASAP. It is a big, complex and hardware-intensive effort.

Second, we need new firm generation to maintain the reliability of the electricity system. Without this, we can’t turn off old coal and we risk decarbonising the nation’s most significant emitter.

Finally, we need to get energy prices down. Whilst we find that average energy prices have pretty much returned to pre-COVID levels, they are still significantly higher than in 2015 when LNG exports commenced on the East Coast, increasing gas and electricity prices in lock step.

So, in our personal view, establishing a gas reservation policy for the East Coast is long overdue. If it works, it will reduce energy costs for us all, support much needed investment in gas-powered firming and provide a lifeline to industry that employs many, creates national wealth and exports, supports sovereign capability and whose current viability underpins the decarbonisation task ahead.

Michael Brear is a professor of mechanical engineering at the University of Melbourne and director of the Net Zero Australia Project, and Alasdair McCall is a senior research fellow at the Net Zero Australia Project.

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Adapted from an article first published in The Australian on 30 December 2025.