Australia

Australia drops four ranks in the CCPI, to 56th, and is among the very low-performing countries. It receives a low rating in GHG Emissions, Renewable Energy and Climate Policy, and a very low in Energy Use.

In September 2025, Australia updated its Nationally Determined Contribution (NDC), committing to reducing emissions by 62–70% below 2005 levels by 2035. The country still plans to achieve net zero by 2050. The CCPI country experts note that the new NDC further lacks quantifiable commitments, such as sectoral carbon budgets and interim milestones. Government planning documents and modelling accompanying it also indicated an aim at the lower end of the range (62–65%). There are no plans or measures to help develop decarbonisation pathways to the range’s upper end. This shortcoming is a major concern for the experts, as it suggests that the 70% upper end is for creating the perception of greater ambition than what is actually planned.

Fossil fuel expansion support continues and the future of renewables support is unclear

Australia continues to maintain subsidies for the fuel export sector and support the expansion of infrastructure for fossil fuel extraction, thereby providing financial, legal and political support for expanding fossil fuel extraction. Just days before the government committed to the updated NDC, Australia approved the largest gas export terminal expansion in its history: the North West Shelf Extension to 2070. This plan paves the way for further fossil fuel dependency.  The country is among the 10 countries with the largest developed coal and gas reserves, and it currently plans to increase its production.

In the renewable energy sector, Australia’s aims to achieve an installed capacity of 110 GW and generate 82% of electricity from renewable sources by 2030. This target is unchanged in the updated NDC. To achieve the mark, the government is expanding the Capacity Investment Scheme (CIS) by 25%, raising its target from 32 GW to 40 GW. The CIS is one of the government’s initiatives for boosting the investment appeal of Australian renewable energy assets and supporting rapid deployment of large-scale renewables. The scheme provides revenue safety nets for renewable energy generation and energy storage projects. The experts emphasise that expanding the CIS is not designed to support achievement of Australia’s 2035 targets, other than by supporting achievement of the 2030 climate target. The CIS will conclude in 2027 and it is unclear what government mechanism will follow from 2027 onward to drive continued renewables penetration from 2030 onward.

Emissions trading scheme is complicated and inadequate, while Pacific L&D leadership is needed

The 2023 reforms to the Safeguard Mechanism, originally introduced in 2016, established stricter emissions baselines for large industrial facilities and set a carbon price signal. The experts assess that the emissions trading scheme is convoluted and insufficient. It allows emissions-intensive industries (especially those using fossil fuels) to use questionable offsets rather than reduce emissions. In 2025, the first public data for the reformed Mechanism was released, demonstrating that emissions baselines are, especially regarding major gas facilities, more permissive than expected, generating credits for those facilities above what was anticipated. The experts call for the Mechanism to be strengthened by tightening baselines after 2025 and limiting offsets where on-site abatement is feasible, to secure deeper industrial cuts during this decade.

At the international level, the experts lament that Australia’s economic interests in maintaining ecosystems for the trade of fossil fuels continually undermine its ambitions. They also report that the country’s failure to reduce domestic methane emissions, despite signing the Global Methane Pledge in 2022, undermines its credibility in international climate diplomacy. They advise Australia to join the Beyond Oil and Gas Alliance to demonstrate its commitment to managing fossil fuel reduction.

While the experts welcome Australia’s recognition of Pacific island nations’ acute vulnerability and its prioritising financial aid for the nations, they advise the country to demonstrate stronger leadership in loss and damage finance for Pacific partners. Australia still also must scale up its climate finance contributions overall, as these remain well below its fair share relative to GDP.

The experts call for a commitment to managing the phase-out of coal and gas extraction, and an end to fossil fuel subsidies. While welcoming the CIS expansion, they urge faster transmission, storage, and renewable energy development to ensure that 82% of energy comes from renewable sources by 2030.

Key Outcomes

CCPI Experts

The following national experts agreed to be mentioned as contributors for this year’s CCPI:

• Rod Campbell (The Australia Institute)
• Gavan McFadzean & Annika Reynolds (Australian Conservation Foundation)
• Business Council for Sustainable Development Australia