The 2025 federal election delivered a renewed mandate for climate action, with the Albanese government re-elected on a platform of stronger environmental and energy commitments.

Australia has committed to reducing greenhouse gas (GHG) emissions by 43% below 2005 levels by 2030 and achieving net-zero emissions by 2050. These targets were legislated through the Climate Change Act 2022, and the country is due to submit its next Nationally Determined Contribution under the Paris Agreement this year (2025). 

According to the December 2024 Quarterly Update of the National Greenhouse Gas Inventory, national emissions continue to decline (Department of Climate Change, Energy, the Environment and Water, 2024). The report suggests that Australia is on track to achieve a 42.7% reduction by 2030, narrowly missing the 43% target (Department of Climate Change, Energy, the Environment and Water, 2025). While this represents meaningful progress, emissions have plateaued over the past year, raising concerns about the pace of change required to meet both short- and long-term goals.

The Clean Energy Regulator’s February 2025 Quarterly Carbon Market Report notes that Australia’s reformed Safeguard Mechanism and a strengthening carbon market are contributing positively by helping large emitters manage and reduce their emissions (Department of Climate Change, Energy, the Environment and Water, 2025; Clean Energy Regulator, 2025).

However, progress has been clouded by the May 2025 approval of a 40-year extension to Woodside’s North West Shelf gas project. The project is projected to emit approximately 87.9 million tonnes of CO₂-e annually—a volume greater than the annual emissions of some entire countries. This decision has sparked criticism and raises questions about the compatibility of fossil fuel expansion with national emissions targets (The Guardian, 2025).

The 2025 federal election delivered a renewed mandate for climate action, with the Albanese government re-elected on a platform of stronger environmental and energy commitments. This political continuity is expected to accelerate Australia’s energy transition and bolster the implementation of climate policies (Net Zero Investor, 2025).

Key recent policy developments include:

• New Vehicle Efficiency Standard (NVES): Effective from January 1, 2025, this standard mandates carmakers to meet CO₂ targets for new vehicles sold in Australia. The initiative aims to reduce CO₂ emissions by 369 million tonnes by 2050 and save motorists approximately $1,000 annually on fuel (News.com.au, 2025).
• Mandatory Climate Reporting: Legislation passed in late 2024 requires large and medium-sized companies to disclose climate-related risks and greenhouse gas emissions across their value chains, starting as early as 2025 for the largest companies (ESG Today, 2024).
• All-Electric Building Mandates in Victoria: From 2027, all new homes and commercial buildings in Victoria will be required to be fully electric, marking a significant policy shift in a state increasingly affected by climate change (Victoria State Government, 2025).
• Road-User Charge (RUC) for Electric Vehicles: With fuel excise revenues declining due to rising EV adoption, states like New South Wales plan to introduce distance-based charges by 2027 or once EVs account for 30% of new car sales. While controversial, the measure is framed as a necessary step to modernize transport revenue systems (News.com.au, 2025).

Australia is making steady progress in shifting its energy mix toward renewable energy sources.

• Record Renewable Energy Generation:
  In 2024, Australia generated 92,700 gigawatt-hours of renewable electricity, a 30% increase from 2021. Renewables accounted for 46% of electricity generation in the final quarter of 2024—a national record (Minister for Climate Change and Energy, 2025).
• Ambitious Targets:
  The federal government aims to reach 82% renewable electricity by 2030, exceeding the 60% global benchmark set in the IEA’s Net Zero by 2050 scenario (Ember Energy, 2025).
• Clean Energy Finance Corporation Expansion:
  Continued investment is expected under the re-elected government, with an expansion of the CEFC aimed at unlocking $8 billion in private clean energy investment (Green Central Banking, 2025).

Despite these gains, fossil fuel activity remains a key area of concern:

• North West Shelf Gas Project Approval:
  As noted, the long-term extension of this high-emitting gas project has the potential to undermine national and global emissions reduction goals, particularly if not balanced by equivalent or greater reductions elsewhere in the economy (The Guardian, 2025).
• Fossil Fuel Use in the Grid:
  In 2024, fossil fuel generation increased by 1.5%, due to a combination of higher energy demand and lower-than-average renewable output. However, fossil fuels still make up 20 percentage points less of the energy mix than they did in 2017, indicating a long-term structural change (Ember Energy, 2025).

Australia has taken significant steps toward reducing emissions and transitioning to renewable energy, supported by a robust policy framework and strong political will. However, mixed signals—particularly the approval of large fossil fuel projects—highlight ongoing tensions between economic interests and climate ambition. With its next NDC due in 2025, Australia faces a critical opportunity to reassert its climate leadership and ensure its actions align with the urgency of the task ahead.

This Post was submitted by Climate Scorecard Australia Country Manager Jessica Gregory.