Australia is on track to reduce greenhouse gas (GHG) emissions by 42.6pc by 2030 from 2005 levels, nearly within the country's 43pc target, climate change and energy minister Chris Bowen announced today.
The forecast is based on the baseline scenario from the Department of Climate Change, Energy, the Environment and Water (DCCEEW)'s emissions projections 2024 report, which will be released on 28 November, according to Bowen. It compares to a 37pc reduction estimated in the 2023 report under the baseline scenario and is slightly above the previous report's 42pc projection under a scenario "with additional measures", as those policies have now been incorporated into the baseline assumptions.
The inaugural emissions projections report, published at the end of 2022, showed forecast reductions of 32pc in the baseline scenario and 40pc in the additional measures scenario.
The main policies incorporated are the expanded Capacity Investment Scheme (CIS) and the fuel efficiency standards for new passenger and light commercial vehicles, Bowen said.
Under the CIS, Australia will support 32GW of new capacity consisting of 23GW of renewable capacity such as solar, wind and hydro, as well as 9GW of dispatchable capacity such as pumped hydro and grid-scale batteries. Tenders will run every six months until 2026-27 and winners will need to start operating their assets by 2030, in time to help the Labor government meet its target of sourcing 82pc of electricity from renewable sources by 2030.
Bowen last month announced tender volumes would be accelerated on the back of strong interest in the initial 6GW tender in May.
NEM review
The government separately announced the start of a review of the National Electricity Market (NEM) wholesale market settings, which will need to be changed following the conclusion of the CIS tenders in 2027 and as Australia transitions to more renewables from its aging coal-fired plants.
The tenders will give up to 15 years of support, but new settings will be needed to promote investment in firmed renewable generation and storage capacity into the 2030s and beyond, especially as the Renewable Energy Target scheme will come to an end on 31 December 2030. An expert independent panel will carry out widespread consultation and make final recommendations to energy and climate ministers in late 2025.
The panel will need to consider the importance of decarbonising Australia's electricity system to achieve the 43pc emissions reduction target by 2030 and net zero emissions by 2050, according to the government. But the panel "will not consider" options that involve implementation of carbon trading schemes or carbon markets, or that entail governments supporting new fossil fuel generation, it added.
The federal government will need to co-ordinate and introduce a "clear and enduring" carbon signal in the energy sector to adapt the 25-year-old NEM to a "post-coal era", domestic think-tank Grattan Institute said earlier this year.
