Australia

As COP31 President of Negotiations and a signatory of the Belém Declaration on the Transition Away from Fossil Fuels, Australia, as the world's third largest fossil fuel exporter, has a unique opportunity and responsibility to take forward the global transition away from fossil fuels and show what a credible transition looks like at home.

Australia has made progress on domestic action, but on fossil fuel exports it is going in the wrong direction, outweighing the benefits of action at home.

Renewable energy’s share of Australia’s electricity generation has risen to around 40%, but deployment remains well behind the pace needed to meet the government’s 82% target by 2030. Electric vehicle sales have surged to around one in four new cars sold in 2026, driven by the New Vehicle Efficiency Standard as well as elevated fuel prices, but EVs still make up only 3% of the total fleet and there is no 2035 EV target nor any policy to accelerate electrification in heavy transport, buildings or industry.

Unfortunately the government continues to support the fossil fuel industry, with at least 37 new and expanded coal mines and gas projects approved that will lock in emissions for decades and a pipeline of 40 or more waiting approval. Australia has not yet initiated its own roadmap to transition away from fossil fuels, called for in the first Global Stocktake.

At COP31 Australia is supporting the call for a 35% electrification by 2035 global goal, which is aligned with a 1.5° pathway. It is also critical that this goal is for clean electricity as that’s the only way that it will cut emissions to the 1.5° aligned level – but Australia has yet to support this. For Australia to be aligned with the 35 by 35 global electrification pathway it would need its own national target of over 50%, but under current policies it is headed towards only 33% electrification by 2035.

In terms of national emissions, current policies put Australia on track to narrowly meet its 2030 target, but fall far short by 2035 — projecting only 48% below 2005 levels against an NDC of 62–70%, a gap of around 15–22 percentage points.

Australia’s overall CAT rating remains "Insufficient."

According to the government’s own 2025 projections, Australia would narrowly miss its 2030 target (41% below 2005 levels against a 43% target, in net terms) and fall well short of its 2035 target (47–56% against 62–70%). Electricity and the land sector mask the lack of progress elsewhere: excluding both, the government projects emissions to fall by only 4% by 2030 and 11% by 2035. Repeated revisions to historical and projected land sector estimates make it difficult to track how much the rest of the economy is actually contributing.

Australia’s 2035 NDC target, a 62–70% cut in net emissions below 2005 levels, equivalent to 47–56% excluding LULUCF, is a step up in ambition and narrows the gap to the 1.5°C pathway, but it is not 1.5°C compatible. To be compatible with 1.5°C modelled domestic pathways, Australia would need to cut emissions by at least 58% below 2005 levels by 2035 excluding LULUCF, or at least 76% including LULUCF. The government did not strengthen its 2030 target alongside its new NDC, despite signing up to the 2023 Global Stocktake’s call to do so. As a developed country, Australia’s fair share also requires significant international climate finance, and we rate its climate finance contribution “Critically insufficient”.

Australia’s 2025 Net Zero Plan substantially updates its 2021 long-term strategy, adding interim targets, an emissions budget for 2031-2035 and six sectoral plans. But it introduces no new policies to drive emissions down, and its lack of fossil fuel phase-out leaves 167 MtCO₂e of residual emissions in 2050, around a third of 2025 gross emissions, to be compensated by removals, including land-based sequestration. Such reliance on the land sector of this scale creates risks, as it might compete with other land uses and generate permanence concerns due to the bushfire and drought risks facing land sinks.

Australia has two main policies in place to reduce emissions, the first being its non-legislated 2030 82% renewables target. The 82% target applies only to on-grid renewable electricity generation, supported by its expanded Capacity Investment Scheme. The government’s own estimates show that accounting for off-grid power generation means an 82% on-grid renewables target translates to only 77% nationwide by 2030. There is no renewable energy target for 2035.

Large-scale project deployment in 2024 and 2025 was half of what it should be to meet the 2030 target, held back by approval, skills and supply chain constraints and the International Energy Agency projects solar and wind will generate less than 50% of Australia’s electricity in 2030.

The government still has no phase-out date for fossil fuels in the electricity system. There is no timeline for the retirement of the coal-fired power plant fleet; the government has refused to set a target for 2035, and its aspirational net-zero plan still sees a role for fossil gas in 2050.

The other key policy is the Safeguard Mechanism, Australia's key instrument for reducing industrial emissions, which is a clear example of how offsetting delays or avoids decarbonisation. The nominal Safeguard Mechanism target requires net emissions to decline to 100 MtCO₂e by 2030, or 28% below 2023 levels.

Because the Safeguard Mechanism (SGM) only applies to net emissions, it effectively makes Australia one of the few countries in the world letting the industry sector cover its emissions with offsets. In the past two years of compliance, less than a third of the net SGM reductions achieved were from real emission cuts and two-thirds due to the use of offsets. With fossil fuel extraction accounting for half of the facilities covered under the Mechanism, the uncertainty about the ability of the scheme to deliver actual emission reductions puts Australia’s climate targets and Paris-alignment in jeopardy.

Meanwhile, Australia continues to throw its support behind the fossil fuel industry. As the world’s third-largest fossil fuel exporter, its exported emissions were already more than twice its domestic emissions in 2022. The government has no federal strategy nor timeline for transitioning away from coal and fossil gas, as it agreed at COP28, has refused to introduce an export tax on LNG producers, and provided around AUD 14.5bn in subsidies to fossil fuel producers and major users in 2023/24. It has approved nearly 40 new or expanded coal mines and gas projects and gas projects, many of them set to operate well after 2050.

Australia’s role at COP31 gives it an opportunity to move the transition away from fossil fuels agreed at COP28 from declarations to implementation. Australia is championing COP31 Presidency Türkiye's proposal to raise electricity’s share of final energy consumption to 35% by 2035, globally. Electrification only reduces emissions if the electricity is clean: the goal therefore needs to go hand in hand with a rapid build-out of renewables and a phase-out of fossil fuels in the power sector, in Australia and globally. It is barely on track to meet that goal, and as a developed country, should go further and faster.

Beyond electricity, policies are lacklustre. Light passenger vehicle electrification is picking up, driven more by the market response to the Middle East conflicts than by ambitious policy, while other transport remains a blind spot. Little is in place to accelerate electrification and energy efficiency in buildings and industry, or to cut emissions from agriculture and waste.

Ahead of COP31, Australia should build on its progress in the power sector by setting a 2035 renewables target and a coal phase-out date and turn its support for transitioning away from fossil fuels into a concrete plan for its own production and exports.

Some recent positive policy developments include:

• The 2025 Net Zero Plan and six sectoral emissions reduction plans, which provide a more detailed roadmap than the 2021 long-term strategy.
• The expanded Capacity Investment Scheme, which comprises 26 GW of new renewable generation and 14 GW of clean dispatchable capacity by 2030.
• Strong growth in rooftop solar, projected to reach around 37 GW by 2030.
• The New Vehicle Efficiency Standard, which took effect in 2025.
• The Climate Change Act 2022, which legislates the 2030 and net zero targets and requires independent advice on future targets and annual progress reporting.

To improve its climate action, Australia needs to:

• Stop supporting the fossil fuel industry and commit to a fossil fuel phase-out roadmap. Australian governments at both state and federal level need to cease their support for coal and gas projects, halt new developments and approvals, and establish a roadmap to transition away from fossil fuels across the economy - including coal and LNG exports.
• Accelerate the transition to renewables by streamlining regulatory approvals that are slowing investment in large-scale renewable generation and storage, accelerate grid modernisation and expansion, incentivising demand-side management, committing to an ambitious and binding 2035 renewable target and planning the phase-out of coal in the early 2030s and gas-fired plants by the mid-2030s – including off-grid – in a fair and just manner.
• Foster the rapid decarbonisation of the transportation sector through policies to accelerate the deployment of electric cars, trucks and rail, the scale-up of alternative fuels for domestic and international aviation and shipping, public transport planning, and incentives for modal shift.
• Ramp up electrification and energy efficiency across sectors through the introduction of a sectoral roadmap for industry and buildings, with quantified targets and incentive packages, to overachieve on the global goal of 35% electrification by 2035.
• Reform the Safeguard Mechanism so that industrial emissions are cut at source, by limiting the use of offsets to cover emissions above baselines.
• Decrease its reliance on LULUCF sequestration by implementing ambitious, long-term policies in other economic sectors. The government needs to set targets for genuine emissions reductions from its economy without relying on highly uncertain estimates from the land sector that sees annual revisions.

The CAT rates each country’s targets and policies against (1) its fair share contribution to climate change mitigation considering a range of equity principles including responsibility, capability and equality, and (2) what is technically and economically feasible using modelled domestic pathways which in absence of a better method are based on global least-cost climate change mitigation.

Comparing a country’s fair share ranges and modelled domestic pathways provides insights into which governments should provide climate finance, and which should receive it. Developed countries with large responsibility for historical emissions and high per-capita emissions, must not only implement ambitious climate action domestically but must also support climate action in developing countries with lower historical responsibility, capability, and lower per-capita emissions.

The CAT rates Australia’s climate targets, policies and climate finance as “Insufficient." The “Insufficient” rating indicates that Australia’s climate policies and commitments need substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit.

To improve its rating, Australia needs to set a more ambitious 1.5°C aligned 2030 target for emissions reductions, establish policies to reach its objectives, and provide more finance to support others.

Australia’s current policies are rated as “Insufficient” against modelled domestic pathways. This rating indicates that Australia’s climate policies and action need substantial improvements to be consistent with modelled domestic pathways limiting warming to 1.5°C. If all countries were to follow Australia’s approach, warming would reach over 2°C and up to 3°C.

The government has yet to take the necessary steps to put the country on track to limit global warming to 1.5°C below pre-industrial levels. Current policies are on track to reduce Australia’s total emissions, excluding LULUCF, by 23% below 2005 levels by 2030.

While the government projects reaching its target of 82% on-grid renewable generation by 2030, progress has been too slow to stay on track. The Climate Change Authority estimates that the pipeline of renewable energy projects falls short by 8 GW of what is required to achieve the government’s target. Given that a significant amount of generation is off-grid (~10%) and not addressed by current policy, even if the 82% target is met, total electricity generation would only be 77% renewable by 2030, well below a 1.5°C aligned pathway.

The government is relying heavily on a LULUCF sink to reach its climate targets, with both historical and projected sequestration figures revised significantly upwards in recent years.

Since 2018, the government has repeatedly revised its land sector sequestration projections, creating the illusion of action. For example, by 2024 Australia had achieved net emission reductions of 28% below 2005 levels – including LULUCF – but in reality, without this sink, actual (gross) emissions had only dropped by 2%. This ongoing revision of Australia’s historical and projected LULUCF estimates erodes the ambition of its NDC for fossil fuel and industrial emissions, the main drivers of climate change, and where the government holds the most leverage.

The Safeguard Mechanism, reformed in 2023, is the government’s main policy for reducing industrial emissions. While it is too early to assess the impact of these reforms due to the mechanism’s design, many SGM facilities rely heavily on offsets rather than direct on-site emissions reductions, undermining gross emissions reductions. Modelling indicates that the reductions in actual emissions from the SGM are likely to be only about 12% below 2023 levels, with 58–68% of the SGM net reduction target met with offsets. While the SGM does include a complex limit on “gross” emissions, this could be met with real emissions only about 2% lower than in 2023 – in other words, SGM facility emissions may only be capped at around 2023 levels until 2030.

The government introduced its long-awaited New Vehicle Efficiency Standard (NVES) in 2024 as a CO₂ emission intensity standard and will take effect from mid-2025. Implemented as a national limit on grams of CO₂/km driven, it is averaged across all new cars sold, with each manufacturer getting a weighted allocation that can be sold to others if over-achieved or subject to fines if not. The government’s impact assessment indicates that this would reduce cumulative emissions from passenger cars and light commercial vehicles by around 16 MtCO₂e for the period 2025–2030 or about 11% below 2025 emissions levels by 2030. Ahead of this policy, Australia was, along with Russia, among the few developed economies to lack such measures.

The full policies and action analysis can be found here.

The CAT continues to rate Australia’s 2030 NDC target as “Insufficient” when compared to modelled domestic emissions pathways. Australia’s NDC targets emissions 43% below 2005 levels by 2030, including LULUCF.

The quantification of Australia’s 2030 NDC target is impacted by continuous recalculations of LULUCF sinks estimates for 2030. These have systematically increased year-on-year (except in the 2025 projections), thereby reducing the amount of action Australia needs to take on reducing fossil fuels and emissions in other sectors to meet the NDC target.

Excluding LULUCF, the NDC target equates to a reduction of 25% below 2005 levels by 2030. A 2030 NDC target in line with 1.5°C compatible modelled domestic pathways for Australia would require emissions reductions of at least 43% below 2005 levels by 2030 excluding LULUCF, and 59% when including LULUCF.

Australia has submitted a 2035 target, which equates to a reduction of 47-56% below 2005 levels (excluding LULUCF). For 1.5°C compatibility, Australia would need to reduce emissions 58% below 2005 levels by 2035 excluding LULUCF, and 76% when including LULUCF.

Projections for LULUCF sequestration in 2030 increased fourfold between the government’s 2021 and 2024 projections. This reduces the emissions reduction task for energy, industry, agriculture and waste. The 2025 projections adjusted down the sink potential due to the moderation of the land sink after consecutive La Niña years, methodological improvements in the National Greenhouse Gas Inventory (including to the savanna fire modelling), and updated modelling for plantation harvesting, cropland and grassland emissions (DCCEEW, 2025a). This also highlights that relying on variable and uncertain land-based sinks can be risky.

The “Insufficient” rating indicates that Australia’s NDC target in 2030 needs substantial improvements to be consistent with modelled domestic pathways limiting warming to 1.5°C. If all countries were to follow Australia’s approach, warming would reach over 2°C and up to 3°C.

The CAT rates Australia’s 2030 NDC target as “Insufficient” when compared to its fair share emissions allocation. The “Insufficient” rating indicates that Australia’s NDC target in 2030 needs substantial improvements to be consistent with its fair share of the global mitigation effort to limit warming to 1.5°C.

Australia’s target is at the least stringent end of what would be a fair share of global effort and is not consistent with the 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort. If all countries were to follow Australia’s approach, warming would reach over 2°C and up to 3°C.

Australia needs to improve its fair share contribution through both strengthened domestic emissions reductions as well as financing additional climate action in developing countries.

Australia’s international public climate finance contributions are rated “Critically insufficient." This rating indicates that Australia’s climate finance contributions to date are low and not in line with any interpretation of a fair approach to meeting the Paris Agreement’s 1.5°C limit.

At COP28, Australia pledged to stop financing fossil fuel projects abroad within a year. Although the international fossil fuel financing rating improved from “Highly Insufficient” to “Insufficient”, Australia’s overall climate finance rating remained unchanged. To receive a better rating, Australia must increase the level of its international climate finance.

Australia’s maximum land use, land use change and forestry (LULUCF) net emissions in the last 30 years are greater than 30% of total emissions.

The government intends to meet its NDC and net zero target by an over-reliance on LULUCF as a carbon sink (see section on Land use and Forestry in the Policies and Actions tab). The government regularly recalculates LULUCF for historical and projected emissions. The extent of these recalculations highlights the uncertainty of this sector: data and methodological changes have significant repercussions on Australia’s progress in meeting emissions targets and have specifically and systematically reduced the level of emission reductions needed from fossil fuels, industry, transport and other sectors.

Continued revision of Australia’s historical and projected LULUCF estimates erodes the ambition of its NDC for fossil fuel and industrial emissions, the main drivers of climate change, and where the government holds the most leverage. Effective climate policies are needed to decarbonise all sectors in line with the 1.5°C temperature limit irrespective of projected LULUCF sequestration, which is inherently uncertain.

We evaluate the net zero target as “Average”.

Australia submitted its Long-Term Strategy (LTS) to the UNFCCC in 2021, setting a net zero emissions target for 2050.

In September 2025, Australia adopted a detailed Net Zero plan, which complements its 2021 LTS. It significantly strengthens the framework of the LTS by legislating the 2050 net zero target, anchoring it in a more detailed framework which includes both Australia’s 2030 and 2035 targets (62–70% below 2005 levels) with a net emissions budget of 1248–1395 MtCO₂e for 2031–2035. This new Net Zero Plan provides a more operational roadmap, structured around five decarbonisation priorities and supported by six sectoral emissions reduction plans.

Yet, the 2025 Net Zero plan presents scenarios that result in very large residual emissions–in 2050, 167 MtCO₂e equivalent to about 32% of 2025 gross emissions. To get to net zero the government assumes a very large amount of carbon sequestration in the land sector and potentially also a large amount of technological carbon dioxide removal (CDR). Due to vulnerability to natural disasters and challenges regarding additionality, permanence, and double counting, land-based sequestration should not be relied on to compensate for continued fossil fuel emissions. The Plan does not introduce any new policies to drive these residual emissions down. All countries will need some CDR, but the Plan relies far too heavily on uncertain land sink and potentially CDR technologies. This introduces significant uncertainty as to whether Australia can achieve its net zero target on time. CDR should be reserved for genuinely residual emissions and for bringing global temperatures back down after overshoot, not used to compensate for emissions that could be avoided.

The full net zero target analysis can be found here.