Tripling in sales drives emissions reduction in transport sector
Australians’ newfound love of electric vehicles has reduced the transport sector’s carbon emissions for the first time since COVID lockdowns forced people to stay indoors, marking a major milestone in the green energy transition.
Official figures released on Tuesday night reveal that electric vehicle sales will triple in the last three years and account for 13 percent of all new cars sold in 2025.
The increase in clean cars was a driving factor in reducing the country’s greenhouse gas emissions by an overall 1.9 percent in the year to September 30.
A heavy user of petrol, diesel and jet fuel, Australia’s transport sector accounts for nearly a fifth of the country’s greenhouse gas pollution. It is notoriously difficult to decarbonise, and its emissions have increased by 23 percent since mid-2005; This is the largest increase in any industry.
Climate Change and Energy Minister Chris Bowen on Tuesday hailed official figures as evidence that his “common sense” policies were working.
“If we stay on this course and continue to increase our efforts, we are on track to meet our climate goals,” Bowen said.
Data from the Ministry of Climate Change and Energy shows that transport sector emissions fell by 0.4 percent for the year to September 2025, due to reductions in oil consumption in road transport.
Emissions across the economy as a whole were 2 percent lower than the previous year; This was the first sustained decline in greenhouse gas pollution since the pandemic. This is mainly because zero-emission renewable energy is increasingly outpacing polluting coal plants in the electricity sector.
Other drivers of emissions reductions include record contributions from the switch from home gas appliances to electric alternatives and the use of carbon capture and storage to capture and bury carbon pollution from oil and gas production.
Australia is committed to ambitious targets under the Paris Agreement to reduce emissions by 43 per cent from 2005 levels by 2030 and by at least 62 per cent by 2035. If it continues at the current rate, it will achieve a reduction of approximately 36 percent by 2030.
The emissions data comes at a critical time for the Albanian government, which can now point to progress on policies to increase electric vehicle uptake, support the construction of wind and solar power plants and boost household battery purchases.
But the government claims it will meet its target, with two major coal power plants set to close within the next four years and more closures expected to be announced in the meantime.
The Climate Change Authority calculates that for the Albanian government to meet its 2035 emissions reduction target, clean car sales need to increase almost fivefold, with every second light vehicle sold over the next decade needing to be electric.
This means that approximately 9 million electric vehicles will be sold in the next 10 years.
Electric vehicle sales have increased rapidly over the last five years; Sales, which were around 7,000 in 2020, increased to 157,000 in 2025.
The federal government’s tax breaks for electric vehicle rentals have been extremely popular; Savings of tens of thousands of dollars in fringe benefit taxes offered to workers who purchased an electric vehicle valued under $91,387 through a renewed lease.
But the Productivity Commission has called on the government to withdraw the generous subsidy, which is estimated to cost $1.35 billion this financial year.
The Coalition’s policy is to cancel the rebate.
The Electric Vehicle Council said cutting the subsidy would reduce the uptake of clean cars and increase the risk of Australia failing to meet its climate targets.
“If the goal is 9 million EVs by 2035, you can’t hit that goal by making them more expensive in 2026,” said EV Council CEO Julie Delvecchio.
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Nick Toscano is an economic correspondent for The Age and the Sydney Morning Herald.Connect with: X or email.
