Australia’s 2035 emission reduction target: keep calm and carry on

Australia’s 2035 emissions reduction target is much delayed; its publication will reduce uncertainty and enhance focus.

Authors: Dr Mary Stewart and Olivia Kember

What is the target?

Australia’s national emissions reduction target, as included in our Nationally Determined Contribution (NDC), is 43% below 2005 levels by 2030. An NDC details a country’s plans to reduce greenhouse gas emissions and contribute to the global temperature goals outlined under the Paris Agreement[1]. They are required to be set by all signatories to the Paris Agreement on five-yearly cycles of increasing ambition. Countries report their emissions reduction progress relative to their NDCs; Australia’s 2035 target is past due.

The Climate Change Authority (CCA) was working on a proposed range for the 2035 target before the Federal election was called in March. The release of this recommendation is imminent. It is not clear whether the range suggested by the CCA in 2024 of 65% - 75% will be adjusted; it is likely that ambition will not reduce relative to this position. The final target will need to be debated and agreed by parliament. The final target needs to be lodged with the United Nations Framework Convention on Climate Change (UNFCCC) before the end of September this year.

It will be interesting to see how the political process plays out around the target over the next couple of months. Aspects that we see playing a role in the conversation are:

• The landslide Labor result in the March elections, the significant Labor majority in the upper house, and the need for Labor to rely on independents and the Greens to get votes through in the Senate means that we can expect the target to show some ambition. Labor campaigned on a platform that showed commitment to a net zero Australia, they will need to lean into this position in this term of government.
• Australia’s ambition to host COP31 in 2026 along with our Pacific neighbours. The declaration of the COP31 host has been delayed significantly and uncharacteristically. The COP host is typically known at least two years in advance of the COP being held. The reason for this delay is that Turkiye has indicated that they also want to host COP31. Neither party is backing down in their efforts. For this reason, the COP host could be decided by a vote of the parties to climate convention at COP30 in Belem in November this year. It is widely accepted that Australia will need to show some ambition in its target in order to demonstrate that it’s serious about addressing climate change, and to be successful in its bid to host the COP.
• Global political uncertainty continues to weigh heavy on the Australian economy. Concerns about the high costs of living and doing business are often offered as a counter-balance to climate ambition. This will temper ambition in the 2035 target. The Productivity Commission is considering the impact that climate events will have on the Australian economy. These conversations need to ensure that they consider the costs of both action and inaction.  
• We will continue to see increasingly strident comments on both sides of the debate. Already we have seen a call for ambition in our target from the international community (“Bog standard is beneath you”[2]) and from civil society (“we need to take strong action that aligns with expert evidence[3]), while parts of the business community are opting for less ambition (ACCI support less than 65%[4]).

The relatively limited need for the Albanese government to rely on the crossbench to get the target across the line could mean that they tend towards less ambition in the target; however, this could be compensated for by the call in the wider community for ambition in the target. Weighing up these two sets of influences, and taking the temperature of various conversations we are hearing, seems to suggest that a target around 67-69% is most likely.

Why is this important?

The target will inform how ambitious national emissions reduction policies will be. We expect focus to be on:

• The move to renewables - with the current Renewable Energy Target (RET)[5] concluding in 2030, businesses need reassurance that the government is serious about the orderly decarbonisation of the electricity system.
• The Safeguard Mechanism and a ratcheting down of baselines for covered assets which could result from the scheme review in FY27
• A maintenance of the sectoral approach to emissions reduction - energy efficiency and demand response, electrification of transport and heating, and technology deep dives into hard-to-abate sectors all playing their part.

What else can we expect?

Along with our NDC, Australia also needs to submit our National Adaptation Plan (NAP). While NDCs focus on emissions reductions, NAPs focus solely on medium- and long-term climate adaptation needs. Australia’s first pass National Climate Risk Assessment was released in 2024, this identified 56 nationally significant climate risks, and highlighted 11 priority risks in the second pass (for further analysis). This revision of the National Climate Risk Assessment will inform our NAP. We expect to see both of these pieces of information before the end of November 2025.

We will watch as this debate unfolds over the next couple of months. We welcome the opportunity to speak to you about what we are seeing and hearing. Please reach out if you want a more detailed briefing.

References and footnotes

[1] World Resources Institute | What Are Nationally Determined Contributions (NDCs) and Why Are They Important? (2024)

[2] UN climate chief urges Australia to 'go big' on 2035 emissions target - ABC News

[3] Civil society calls for strong… | Australian Conservation Foundation

[4] Business lobby calls for weak 2035 emissions target, even as key members warn of climate calamity | RenewEconomy

[5] Australia’s RET - 82% renewable energy by 2030