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Hey Reader, in today's edition:
- 62-70% bouquets and brickbats
- Tapping demand-side potential
- Santos shareholders count their losses
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‘Floor not a ceiling’ set for 2035
Australia must reduce greenhouse gas emissions by 62-70% by 2035 under a target calibrated for an economy powered by heavy industry and renewable energy.
Accepting the advice of the Climate Change Authority for a lower target than an initial 65-75% range signalled last year, Prime Minister Anthony Albanese announced a "responsible" climate target he said was in the "sweet spot" for Australia, although big investors and many industry groups say the top end is well within reach.
Liberal Leader Sussan Ley said Labor's 2035 climate modelling was clearly “in fantasy land” given past modelling on energy bills falling was a dud, and reiterated her party was still reviewing its position on net zero. Nationals Leader David Littleproud said “we won't be supporting these interim targets, we won't be legislating targets, that's nonsense”.
Independent Senator for the ACT David Pocock said the 2035 target range “feigns ambition”, while independent MP for Warringah Zali Steggall said the target was “weak” and “shows the government is sitting on the fence and putting old industries ahead of safety, rather than fully embracing the opportunity to build a strong and future focused economy”. Greens Leader Larissa Waters said Labor was “gifting a free ride to the big polluters”.
Detailed mitigation measures in the form of six sector plans set out what the federal government thinks is the most feasible way to achieve a target that some say lacks credibility.
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Expert view
"The energy sector plan highlights the importance of energy efficiency, which can deliver 30% reduction in energy use by 2050, while reducing energy costs for households and businesses.
The Treasury modelling shows that coal and gas fugitive emissions can be cut by about two thirds by 2040. This will require significant tightening of Safeguard Mechanism settings, which are currently not effective at driving fugitive emissions reductions.
Consistent with our research, the Treasury modelling shows only a temporary role for gas in new iron and steel production, which is then replaced by green hydrogen.
It is good to see the $5 billion net zero fund to support major investments in industrial decarbonisation and energy efficiency. It will also be important to consider financial and capability support for small to medium manufacturers which have large untapped opportunities to improve their energy efficiency and to electrify, but limited resources.”
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Amandine Denis-Ryan
CEO, IEEFA
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Expert view
"This target is also a climate failure. It signals complacency at a time when every tonne of carbon matters. What matters now is delivery: electrifying our industrial assets, building transmission and storage, and locking in clean power for smelters, refineries, and manufacturers. That’s how we protect existing jobs and grow new ones.”
“Regional Australia is where national targets succeed or fail. With the right sequencing and investment, regions like the Hunter and Central Queensland can stay industrial powerhouses in a zero-emissions world. Without it, we risk losing them.”
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Heidi Lee
CEO, Beyond Zero Emissions
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Expert view
"The proposal to extend the current or a heightened decline rate of the Safeguard Mechanism out to 2035 is likely to yield substantially more emission reductions from industry and resources. Modelling has shown that scenarios where baselines are extended beyond 2030, continuing with the current 4.9% decline, are likely to significantly contribute to emission reduction targets.
However, whether the extension will reduce emissions by a third will depend upon the availability and cost of the technologies in these sectors to facilitate this abatement. In hard to abate sectors such as coal mining, steel, cement, aluminia and LNG the opportunity for cost effective abatement is more limited. In the absence of cost effective abatement technologies, such sectors will inevitably rely heavily on offsets rather than on-site physical reductions.
A lack of cost effective abatement will, in turn, increase the cost of paper compliance, because off-sets and credits will need to be purchased. Achieving the proposed reductions in line with the extended decline rate will therefore depend upon the ability of sectors to scale up cost-effective technology and unlock substantive abatement opportunities. Where this doesn’t occur, the proposal is likely to facilitate the transfer of funds into offsets rather than acting as a driver for substantive industrial decarbonisation."
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Samantha Hepburn
Professor, Deakin Law School
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Expert view
"The Treasury modelling that accompanied the NDC announcement and the Net Zero Plan is welcome. Not only does it demonstrate the economic costs of inaction, it paints a clear picture of the positive economic opportunities we have by building new green export industries. The modelling demonstrates that higher investment, more exports and greater GDP per capita can be achieved by investing in new industries like green iron and green ammonia.
In addition, Treasury also recognises the benefits that these industries provide as a flexible source of energy supply to the grid – a 20% wholesale price reduction by 2050. The addition of very large sources of renewable energy supply to power these industries, which will often be able to ramp up and down production when needed, can also have an important stabilising effect on the grid, improving reliability significantly.”
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Baethan Mullen
CEO, The Superpower Institute
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Expert view
"It's going to take a lot of doing, and the new specific policies announced today are a down payment towards that. The already expected review of the Safeguard Mechanism, the finalisation of the post CIS electricity market reforms and the evolution of transport policy (both the existing vehicle efficiency standard and what approach we'll take to incentives for heavy vehicle emissions reduction), those are all big shoes left to drop.”
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Tennant Reed
Director of Climate Change and Energy, Australian Industry Group
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Tapping demand-side potential
The energy sector to date has focused heavily on new supply projects, but the net-zero sector plan released yesterday has finally shifted some much-needed attention to demand-side.
The proposed Demand-side Statement of Opportunities will provide information about where investments can be made, especially in the distribution system and ‘behind-the-meter’. It will show how to make best use of consumer energy resources (solar panels and batteries) and flexibility in energy demand (using energy at the right time).
"The DSOO can support better electricity planning, reduce costs, improve reliability and create value for investors," writes Climateworks' Anna Malos.
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Catch Up
Capital
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EV fast-charging network Evie Networks announced the country’s first commercial infrastructure debt facility for public EV charging: a A$50 million senior debt facility with specialist fund manager Infradebt, backed by leading superannuation funds. “It signals that public EV charging is now recognised as main-stream national infrastructure. The support of superannuation funds shows that investors are moving beyond traditional assets and backing this new infrastructure that will shape Australia’s energy and transport future. Only a small number of companies globally have achieved this,” CEO Chris Mills said.
Mining giant Anglo American joined the cull of coal jobs, cutting 300 jobs in its Queensland coal division, with QCoal also understood to be planning job cuts at its five mines in the state. “We will continue speaking openly about the challenges we are facing as an industry – and we’re asking everyone to be part of this conversation,” BHP (ASX: BHP) asset president Adam Lancey said in a letter to suppliers and community groups. (AFR)
Santos (ASX: STO) shareholders were counting their losses after ADNOC’s consortium torched a $30 billion takeover bid on the eve of signing day. The Offshore Alliance, made up of the Australian Workers Union and the Maritime Union of Australia, which had lobbied against an influx of energy workers on foreign contracts, said “good riddance”.
 Projects
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Eight new projects are the successful recipients of the First Nations Fund, which ensures renewable energy projects connecting to NSW's Central-West Orana Renewable Energy Zone provide meaningful opportunities and outcomes for Aboriginal people and communities. The projects include funding for housing repairs, parks, cultural programs and tourism opportunities. The First Nations Fund will open for more applications on 22 September 2025, with $4 million available
Policy
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NSW Energy Minister Penny Sharpe inked a Priority Network Infrastructure Project deal with Transgrid for the delivery of synchronous condensers at existing substation sites at Newcastle, Kemps Creek, Armidale, Wellington and Darlington Point. The agreement follows the recent amendment to the Electricity Infrastructure Investment Act 2020, which enables the Minister to progress projects under the NSW Electricity Roadmap framework. “This is just one of the ways we’re taking action to replace the state’s ageing coal-fired power stations, to prevent power outages and price spikes,” she said.
WA released the South West Interconnected System Transmission Plan, with significant investment in new transmission, generation and storage infrastructure needed to support the state’s energy system as it exits coal. “Timely delivery of new transmission lines will give energy investors the certainty they need to develop projects and bring them online. This plan will help make that happen,” Australian Energy Council CEO Louisa Kinnear said.
Regulation
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As gas demand from residential and small commercial customers declines, and these customers leave distribution networks, the costs of operating and maintaining the network will be shared among a declining customer base. In response to a rule change request by Energy Consumers Australia, the Australian Energy Market Commission (AEMC) made a draft rule requiring new gas customers to pay the cost of their connection upfront. If implemented following consultation, the rule would apply in the ACT, NSW, South Australia and some Queensland gas distribution networks from 1 July 2026.
The Australian Energy Market Operator (AEMO) is kicking off the next stage of the CER Data Exchange: Detailed Design work and called for experts to nominate to join two interdependent Working Groups to hurdle the potential technical and regulatory barriers.
The Greens called for the immediate resignation of NT Environment Protection Authority Chair Paul Vogel after a major methane leak was “kept hidden by multiple regulators for 19 years”. Vogel was also involved in key decisions around the Darwin Liquefied Natural Gas plant (DLNG) without disclosing his paid role with the lobbying firm representing DLNG shareholder INPEX, which was “untenable”, Greens spokesperson for the Transition and Northern Australia, Senator Penny Allman-Payne said.
Climate
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The European Union will miss the global deadline to set new emissions targets due to divisions among EU governments. Instead, EU ministers will send a "statement of intent" to the UN, outlining what climate goal the EU eventually hopes to approve. Reuters is reporting that is a cut between 66.25% and 72.5% by 2035. (Reuters)
An interactive “stolen futures” map released by the National Resource Defense Council shows the US$29 billion in Biden-era environmental and renewable energy grants cancelled or frozen by US President Donald Trump. (Inside Climate News).
Research
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Climate change is projected to lead to an increase in bushfires and researchers predict that this might lead to 1.4 million premature deaths each year due to the bushfire smoke. The associated increase in air pollution is likely to worsen human health, say the authors, specifically, owing to exposure to fine particulate matter with a diameter of 2.5 μm or less (PM2.5). (Nature)
A Wood Mackenzie study on the North American Virtual Power Plant (VPP) market found the top 25 VPP offtakers procured over 100MW each this year, while over half of all offtakers increased the number of deployments under them by at least 30% compared to last year, showing the breadth of the market. An “independent distributed power producer” business model has emerged as energy arbitrage and grid service revenue can finance an electricity retailer’s third-party-owned storage offering.
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What's On
September 21-28
Climate Week NYC
Climate Change and Energy Minister Chris Bowen, Fortescue founder Andrew Forrest, Vanuatu’s Climate Change Minister Ralph Regenvanu, Indonesia’s Special Presidential Envoy for Climate, Energy & Environment Hashim Djojohadikusumo, UN Framework Convention on Climate Change Executive Secretary Simon Stiell, and Institute for Energy Economics and Financial Analysis Lead Analyst on Global Steel Simon Nicholas are among the speakers at this event in New York.
September 23
AEMO's Annual Results
Australian Energy Market Operator CEO Daniel Westerman and Executive General Manager for Finance and Governance Vanessa Hannan will outline progress against strategic priorities and initiatives, financial results for FY25 and priorities for FY26.
September 24
Updated net zero pathways for Australia
The Net Zero Australia Project team from the University of Melbourne, the University of Queensland and Princeton University will present their latest report on the roles of renewables, energy storage and firming including nuclear, carbon capture and storage and other complementary technologies at this hybrid event.
October 1
ANU Energy Update: Getting to net zero
Grattan Institute Energy and Climate Change Program Director Alison Reeve will chair this hybrid event featuring Climate Change Authority Deputy CEO Eliza Murray, ANU Crawford School of Public Policy Associate Professor Rebecca Colvin and ANU Deputy Director, School of Engineering, Associate Professor Marnie Shaw.
October 2
The COP drop: The latest on Australia's role and opportunity
Climate and diplomacy expert Dean Bialek will join Clean Energy Investor Group CEO Richie Merzian, Pacific Community-SPC Director of Climate Change and Sustainability Coral Pasisi and Climateworks Centre System Lead for Sustainable Communities Kylie Turner at this webinar from The Energy, moderated by The Energy Advisory Board Member Dan Cass.
October 7-8
NEM Development Conference 2025
EnergyAustralia Managing Director Mark Collette and Powerlink CEO Paul Simshauser will headline this Brisbane event hosted by Griffith University and UQ, which will also feature Queensland Farmers Federation CEO Jo Sheppard, NEM Review panel Chair Tim Nelson, Victoria Energy Policy Centre Director Bruce Mountain, University of Sydney Professor of Law Penny Crossley, Iberdrola GM Regulation & Energy Policy Joel Gilmore and Global Roam CEO Paul McArdle.
October 15
The Energy Q&A with the NEM Review panel
NEM Review panel Tim Nelson, Paula Conboy, Ava Hancock and Phil Hirschhorn will speak at this webinar moderated by The Energy Advisory Board Member Anna Hancock.
October 16-17
IGCC Summit 2025: Decoding the transition
Generation Investment Management Founding Partner and former US Vice President Al Gore will headline this Sydney event from the Investor Group on Climate Change. Other speakers include NSW Energy Minister Penny Sharpe, Climate Change Authority Chair Matt Kean, Energy Efficiency Council CEO Luke Menzel, ARENA Associate Director Tanya Hodgeson and Net Zero Economy Agency CEO David Shankey.
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