Australia’s latest emissions data reveal we still have a giant fossil fuel problem

According to Australia’s Climate Change and Energy Minister Chris Bowen, the latest emissions data show “we are on track to reach our 2030 targets” under the Paris Agreement. In 2024, Australia’s greenhouse gas emissions were “27% below 2005 levels”. That’s great news, right?

Well, yes and no. Australia continues to rely on changes in land use to compensate for emissions released into the atmosphere.

In other words, Australia’s plants are considered to be taking more carbon dioxide out of the atmosphere now than in 2005. Their efforts are captured in the Land Use, Land-Use Change and Forestry (LULUCF) sector, which is the single largest reason for the significant reduction in Australian emissions.

Without accounting for land use, Australia’s emissions have only decreased 3% since 2005, not 27%.

If Australia is serious about reducing emissions and tracking towards net zero by 2050, we need to tackle a series of inconvenient truths about fossil fuels. Fossil fuels feed into almost every aspect of our lives, not just cars and power plants. There are substitutes, but they are not easy to source – and they don’t come cheap.

How fossil fuel exports drive up emissions here and overseas

Australia is one of the world’s biggest fossil fuel exporters. The coal, oil and natural gas we export is either burnt or combined with our sizeable iron ore exports to produce iron. But the greenhouse gases are released overseas, so they don’t count in Australia’s emissions data.

This is in line with our international commitments under the Paris agreement. But there is an argument to be made that even though Australia doesn’t burn those exports, we should acknowledge our central role in contributing to global emissions. We may need to account for these in future reporting.

Australia’s export emissions are likely to be triple that of our domestic emissions. These emissions have been increasing consistently over the last decade.

But the process of extracting fossil fuels and preparing them for export does show up in Australia’s domestic emission figures, through what’s called “fugitive emissions”. These fugitive emissions are the unavoidable leaks that occur when we pull fossil fuels out of the ground, store, transport and process them.

In the year to 2024, fugitive emissions accounted for 10.6% of our emissions, which is far greater than emissions from industrial processes (6.8%).

Disturbingly, recent analysis suggests fugitive emissions could be drastically underreported. Because these emissions are tricky to measure, they are often estimated on an average basis. This means reported values do not accurately reflect true releases.

When it comes to fugitive and export emissions, Australia is not on track to meet 2030 targets. Recent export-focused fossil project approvals such as the North West Shelf gas project suggest we might even be backtracking.

The transition to renewables

Closing dirty old coal-fired power stations and replacing them with renewable energy such as solar and wind power does cut emissions. The reduction in emissions from the electricity sector, down 23.7% on 2005 levels, is good news. But the difference is still small enough that seasonal variations from Tasmania’s hydro power plants can distort the annual figures.

At least there is a plan in place for the energy transition. Big, slow wheels are in motion.

Unfortunately the reality is we will need much, much more renewable energy in the future. Up to three times the current capacity of the National Electricity Market will be needed to cover future domestic energy requirements across electricity and other sectors out to 2050.

Significantly more would be required to generate enough additional green energy to also produce green value-added commodities.

Australia’s clean energy challenge

Discussions around transitioning from fossil fuels typically overlook how deeply they are embedded in our everyday lives.

Not just the fuel we use in our cars, but the roads we drive on. Not just the electricity we use to power our hospitals, but the steel used to build them and the pharmaceuticals we rely on.

Globally, around 13% of fossil fuels are not burned but used to make these key chemicals. What’s the alternative?

Clean electricity is the key.

Electricity can be used to make hydrogen from water through electrolysis. This hydrogen can then replace fossil fuels in manufacturing – making products such as green steel and ammonia for fertiliser.

When combined with non-fossil sources of carbon, hydrogen can also be turned into renewable fuels, such as sustainable aviation fuel. It can be used to synthesise green versions of petrochemicals used in industrial processes such as ethanol, propylene and ethylene, which are currently sourced from fossil fuels.