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Australia Sectors

What is Australiaʼs pathway to limit global warming to 1.5°C?

Australia’s transport sector accounts for the largest share of the total final energy consumption, 41% as of 2019, and growing. Consequently, annual carbon emissions from the sector increased by around 1.6% per year during this time. As of 2019, oil accounts for 97% of transport’s energy use.

Recent analysis has highlighted the inefficiency of Australian vehicles.41 Today, Australia is the only OECD country without mandatory fuel efficiency standards.41 A previous government assessment found that raising transport fuel efficiency standards was Australia’s most cost-effective emissions abatement opportunity.42,43 Estimates of marginal abatement costs for Australia have confirmed that setting such would see a net financial gain, rather than imposing a cost on the economy.44

The Labor government has announced a suite of new transport policy, including investment in electric vehicle charging infrastructure, hydrogen vehicle refuelling stations, and an on-road emissions and fuel usage testing programme. A tax exemption for electric cars has also been introduced.45 Fuel efficiency standards, however, remain conspicuously absent. The government has recently sought consultation on a National Electric Vehicle Strategy, including on the introduction of fuel efficiency standards.46

The 1.5°C compatible pathways assessed here give a range of carbon emissions reduction for the transport sector of 29-69% from 2019 levels by 2030. The large range is in part due to varying forecasts for future energy demand in the sector.

1 Australian Government. Australia’s Nationally Determined Contribution Communication 2022. 2022.

2 Australian Government. Australia’s Nationally Determined Contribution Communication 2021. 2021.

3 Australian Government. Australian Energy Update 2022. Department of Climate Change, Energy, the Environment and Water. 2022.

4 Reputex. The Economic Impact of the ALP’s Powering Australia Plan. 2021.

5 IEA. Greenhouse Gas Emissions from Energy 2021 Edition. 2021.

6 Australian Government. National construction code (NCC) updates mean energy efficiency ratings expansion for new residences. Department of Climate Change, Energy, the Environment and Water. 2022.

7 Australian Government. Trajectory for Low Energy Buildings. Department of Climate Change, the Environment, Energy and Water. 2019.

8 Australian Government. Safeguard Mechanism reform: consultation paper. Department of Climate Change, Energy, the Environment and Water. 2022.

9 Australian Government. Australia’s Long-term Emissions Reduction Plan. 2021.

10 Parliament of Australia. Climate Change Bill 2022. 2022.

11 Climate Action Tracker. Australia. August 2022 update. Climate Action Tracker. 2022.

12 Australian Government. Australia’s emissions projections 2021. 2021.

13 AEMO. 2022 Integrated System Plan For the National Electricity Market. 2022.

14 Hurst, D. Australia could send extra gas to Europe as Russia cuts supplies due to Ukraine tensions. The Guardian. 2022.

15 Woodside. AGM Address by Chairman Richard Goyder and CEO Meg O’Neill. 2022.

16 AEMO. Gas Statement of Opportunities. 2022.

17 Australian Government. Legacy of ongoing Morrison Government fossil fuel handouts. 2022.

18 Morton, A. & Touma, R. Labor urged to axe $1.9bn in ‘zombie’ fossil fuel subsidies promised by the Coalition. The Guardian. 2022.

19 King, M. New offshore greenhouse gas storage acreage to help lower emissions. The Hon Madeleine King MP Media Releases. 2022.

20 King, M. Speech at the Asia Pacific Oil and Gas Conference, Adelaide. The Hon Madeleine King MP Media Releases. 2022.

21 Australian Government. Emissions Reduction Fund White Paper. 2014.

22 COAG Energy Council. National Energy Productivity Plan 2015-2030. 2015.

23 Australian Government. Renewable Energy Target. Clean Energy Regulator. 2022.

24 Parkinson, G. Australia officially met renewable target in January, despite big project delays. Renew Economy. 2021.

25 Climate Analytics. Submission to the Australian Government’s review of the Safeguard Mechanism. 2022.

26 Parra, P. Y., Hare, B., Hutfilter, U. F. & Roming, N. Evaluating the significance of Australia’s global fossil fuel carbon footprint. 2019.

27 Department of Industry Science Energy and Resources. Australian Energy Update 2020, Australian Energy Statistics. 2020.

28 Australian Government. Trade and Investment at a Glance. 2020.

29 Readfearn, G. Australian coal burnt overseas creates nearly twice the nation’s domestic emissions. The Gaurdian. 2021.

30 Wood, T., Dundas, G. & Ha., J. Start with steel. 2020.

31 Marshall, L. Building a clean hydrogen industry for Australia. CSIRO. 2021.

32 Climate Action Tracker. Australia. CAT Scaling Up Climate Action series. Climate Action Tracker. 2020.

33 Climate Analytics. FACTSHEET 4: Australia’s Industry Inefficient and standing still. 2018.

34 Reputex. The Economic Impact of the ALP’s Powering Australia Plan. 2021.

35 Macintosh, A. et al. The ERF’s Human-induced Regeneration (HIR): What the Beare and Chambers Report Really Found and a Critique of its Method. 2022.

36 Randall, T. Clean Energy Has a Tipping Point, and 87 Countries Have Reached It. Bloomberg Green. 2022.

37 Australian Government. Australia reaches the 3 million solar milestone. Clean Energy Regulator. 2021.

38 Clean Energy Council. Clean Energy Australia Report. 2022.

39 Lewis, J. Chevron’s flagship Gorgon CCS project still failing to live up to expectations. Upstream. 2022.

40 Readfearn, G. Gas giant Chevron falls further behind on carbon capture targets for Gorgon gasfield. The Guardian. 2022.

41 Smit, R., Dia, H. & Surawski, N. The road to new fuel efficiency rules is filled with potholes. Here’s how Australia can avoid them. The Conversation. 2022.

42 The Centre for International Economics. What existing economic studies say about Australia’s cost of abatement. 2019.

43 Climate Change Authority. Light Vehicle Emissions Standards for Australia. 2014.

44 The Centre for International Economics. What existing economic studies say about Australia’s cost of abatement. 2019.

45 Australian Government. Budget October 2022-23: Budget Measures Budget Paper No . 2. (2022).

46 Australian Government. National Electric Vehicle Strategy: consultation paper. Department of Climate Change, Energy, the Environment and Water. 2022.

47 We have derived the excl. LULUCF target from 2005 emissions level in the government’s Paris Agreement inventory and 2030 LULUCF projections in the Government projections published in 2022 of -33 MtCO₂e. Both these sources use global warming potentials (GWP) from the IPCC’s Fifth Assessment Report (AR5). As the 1.5°C national pathway explorer uses GWPs from the Fourth Assessment Report (AR4), we have converted the government’s emissions data to AR4 using an average conversion factor of 0.98 (AR4=0.98*AR5). For reference, the AR5 GWP weighted 2030 emissions based on for reference, the AR5 GWP numbers based on the most recent inventory the most recent inventory is 388 MtCO₂e/yr excluding LULUCF in 2030.

48 Based on Government LULUCF projections which use AR5 GWP (-16 MtCO₂e/yr in 2030). Here we have applied the government LULUCF projections growth rates to the latest LULUCF historical data in the Paris Agreement Inventory, and estimate a LULUCF sink of -26 MtCO₂e/yr by 2030 using AR4 GWP. Historic LULUCF emissions for 2005 have also been converted to AR4.

49 The 2022 projections including LULUCF for 2030 are for about a 32% reduction, 11% short of the Governments 43% target.

50 For a critique of the effectiveness of this mechanism, see Climate Action Tracker’s analysis of Australia’s current policies. For discussion of the associated Safeguard Mechanism, see Submission on Safeguard Mechanism reform.

51 This is consistent with the Climate Targets Panel in Australia “fair share” reductions for Australia in 2030 of 74% from 2005 emission levels including LULUCF based on earlier Climate Change Authority work. The overall fair share contribution includes domestic emissions reductions and substantial support for emission reductions in developing countries on top of its domestic reductions.

Australiaʼs energy mix in the transport sector

petajoule per year

SSP1 Low CDR reliance
20192030204020501 000
SSP1 High CDR reliance
20192030204020501 000
Low energy demand
20192030204020501 000
High energy demand - Low CDR reliance
20192030204020501 000
  • Natural gas
  • Coal
  • Oil and e-fuels
  • Biomass
  • Biogas
  • Biofuel
  • Electricity
  • Heat
  • Hydrogen

Australiaʼs transport sector direct CO₂ emissions (of energy demand)


  • Historical emissions
  • High energy demand - Low CDR reliance
  • SSP1 Low CDR reliance
  • SSP1 High CDR reliance
  • Low energy demand

1.5°C compatible transport sector benchmarks

Direct CO₂ emissions and shares of electricity, biofuels and hydrogen in the transport final energy demand from illustrative 1.5°C pathways for Australia

Decarbonised transport sector by
Direct CO₂ emissions
30 to 71
11 to 44
5 to 18
2052 to 2057
Relative to reference year in %
−69 to −29%
−89 to −55%
−95 to −82%
Share of electricity
8 to 19
25 to 46
46 to 63
Share of biofuels
3 to 18
7 to 10
10 to 11
Share of hydrogen
2 to 16
6 to 55
14 to 55