What is Australia's pathway to limit global warming to 1.5°C?

2030 NDC

In June 2022, the Australian government updated its Nationally Determined Contribution (NDC), setting an emissions reduction target of 43% below 2005 levels by 2030, including contributions from the LULUCF sector.¹1 The updated NDC target aims at emissions reductions of 28% below 2005 levels excluding LULUCF which would lead to emissions levels of 380 MtCO₂e/yr excluding LULUCF in 2030.²2 While the updated NDC target is a significant improvement upon the government’s previous target, it is still not compatible with a 1.5°C pathway (and neither is the current policy trajectory).³3

2030 Ambition

When including LULUCF, the 1.5°C compatible pathway would require domestic 2030 emissions level in the range of 203-260 MtCO₂e/yr, or about 57-67% reduction from 2005 levels, which is substantially higher than the current target.⁴4

Fair share

The overall fair share contribution to reduce global greenhouse gas emissions compatible with the 1.5°C temperature limit would require Australia to reduce emissions by 60% by 2030 below 2005 levels, excluding LULUCF. These emissions reductions include Australia’s domestic emissions reductions and substantial support (e.g., financial) for emission reductions in developing countries.

Net zero target

The Australian Government has a target for net zero emissions by 2050, which was submitted to the UNFCCC in October 2021, and enshrined into law in September 2022.⁵5^,66 To reach net zero GHG emissions by 2050 at the latest, Australia would need to balance these residual emissions with carbon dioxide removals.⁷7

2050 Ambition

To be 1.5°C compatible, Australia would need a GHG emissions reduction of 84-94% by 2050 below 2005 levels, excluding LULUCF, which is consistent with the Climate Action Tracker’s comprehensive assessment of a Paris Agreement compatible pathway for Australia, which showed a reduction of around 90% by 2050.

Sectors

Power

• Coal and gas made up around 54% and 20%, respectively, of the power generation mix in 2020.⁸8 Australia would need to move away from fossil fuel power generation in order to realise a 1.5°C compatible pathway. This would necessitate that the country phase out coal by around 2029 and gas by around 2035.

• 1.5°C pathways see Australia’s gas rapidly decline from 2025 or before. Thus, any new gas-fired power plant built in Australia today would be a stranded asset in a 1.5°C world.

• The 1.5°C pathways show an 81-88% renewables share in power by 2030. An earlier bottom-up model developed by the Climate Action Tracker for Australia shows that a 97% renewable share could be achievable by 2030.

• The Labor government’s Powering Australia plan is estimated to result in an 82% renewable power share in the National Electricity Market (NEM) by 2030, but only covers the main grid on the east coast which accounted for about 82% of national generation in 2021/22.⁹9

Buildings

• Direct CO₂ emissions in the Australian buildings sector have been rising steadily since 1990, with 2019 showing a rare small year-on-year decline.¹⁰10

• Australia has a high, and increasingly rapid, uptake of rooftop solar. It is a global leader in terms of residential solar share of total power capacity.

• The Australian government has recently updated the National Construction Code to increase the energy efficiency of new residential buildings. This is in line with an earlier plan to set a trajectory for net zero energy buildings.¹¹11^,1212

• A 1.5°C compatible pathway would see electricity’s share of the buildings sector’s energy mix increase to 78-81% by 2030 and 92-94% by 2050. This would be in conjunction with an increasing share of renewables in power generation.

Industry

• Between 2015 and 2019, Australia’s carbon emissions from industrial energy use grew by around 19%.¹³13 This rise in emissions was due to a dirtier fuel mix, with coal use increasing by 27% over the period.

• Industrial emissions covered under Australia’s Safeguard Mechanism have grown despite its implementation in 2016. The Mechanism is now undergoing consultation and reform, including declining emissions baselines.¹⁴14

• The LNG export industry, which accounts for about a quarter of the emissions covered by the Safeguard Mechanism, is particularly concerning both domestically and in terms of the contribution to global emissions reductions.

• The 1.5°C compatible pathways assessed here see carbon emissions from industrial energy use fall by 66-76% from 2019 levels by 2030 and reach zero between 2047-2053.

Transport

• Australia’s transport sector makes up the largest share of the total final energy consumption, 41% as of 2019, and this has been growing. Oil accounts for 97% of transport energy use.

• Australia’s vehicles are relatively inefficient compared with global averages. Today, Australia remains the only country in the OECD without mandatory fuel efficiency standards.

• The Labor government has made several transport policy announcements in 2022 including developing a National Electric Vehicle Strategy and a new Driving the Nation Fund.

• 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, reflecting the uncertainty around future energy demand and the rollout of hydrogen and biofuels in the sector.