Australia’s emissions fall but the heat is rising in Canberra

As climate wars reignite in the halls of parliament, the latest data shows emissions have fallen significantly and electricity bills have fallen thanks to the spread of renewable energy.

A climate-fueled conflict in federal politics has sharpened as the opposition allied with One Nation in abandoning targets to cut carbon emissions, moving away from nuclear energy targets and pledging to boost coal-fired energy instead.

Emissions from the electricity sector fall in 2025 as renewable energy replaces coal and natural gas. Jason South

Energy Minister Chris Bowen on Friday released official figures showing Australia’s carbon emissions will fall by 10 million tonnes by 2025 due to the rise of electric vehicles and renewables on the electricity grid. This represents a 2 percent cut for the year and a significant increase over recent achievements.

“The latest quarterly update is proof that what is better for the planet is also better for your pocket, better in a cheaper form of new energy, more storage to support it and ultimately lower emissions,” said Bowen.

Australia’s 2025 greenhouse gas figures show the reduction in annual emissions is driven by cuts in two of the most polluting sectors, the most significant since the Covid-19 pandemic halted travel and cut pollution.

As renewable energy replaced coal and natural gas, emissions from the electric grid decreased by 3.8 percent and transportation emissions decreased by 0.6 percent. The government said this was a historic turning point as the sector’s emissions have reached their peak and will continue to fall in the future due to increased uptake of electric vehicles.

But the opposition has abandoned its commitment to achieve net-zero emissions and now supports the need to keep coal plants running for as long as possible and renegotiate trade deals with jurisdictions that have legally binding climate targets, such as the EU.

The coalition’s promotion of coal power also includes a rejection of the need for renewable energy, increasingly reflecting the position of One Nation’s energy policy.

One Nation MP Barnaby Joyce said the demolition of the shuttered Liddell coal power station by AGL this week made the company “absolutely confident that you cannot go back to coal-fired power” so it could increase its profits under renewable energy generation, and criticized it for producing sporadic power supply.

“Australia’s prosperity is going away,” Joyce said in a video on his Facebook page. “The end of coal-fired electricity, a return to intermittent fraud.”

Opposition Leader Angus Taylor said this month that the Coalition government would “work with coal-fired power station owners to keep them running as long and hard as possible to reduce electricity prices”.

Coalition and One Nation MPs will point to market analysts, including UBS, who said on Thursday that “the retirement of coal-fired power stations will create a gradual increase in electricity prices for each generator that is retired.”

Opposition foreign affairs spokesman Ted O’Brien called on the government to restart negotiations with the European Union on a free trade agreement that includes a requirement for “effective implementation” of the Paris Agreement.

The opposition in November abandoned its net zero commitment, a requirement of the Paris agreement set by the Albanian government as a legally binding commitment in 2022 under the Climate Change Law.

Bowen focused on the opposition’s hard-line energy policy, spurred by news this week that energy prices would fall by 5 per cent in NSW and Victoria.

The Australian Energy Regulator said the outages were caused by record-breaking contributions from wind and solar energy and the massive influx of batteries into the grid, driving a “structural shift” where expensive gas power is increasingly being replaced by renewable energy.

Over the past six months, renewables and batteries have supplied more than 50 percent of the country’s main grid for the first time in history.

But it’s not smooth sailing. Expert firms including Rystad and the Grattan Institute said the Albanian government would not be able to meet its ambitious target of renewable energy making up 82 percent of the grid by 2030, and figures released on Monday revealed private investment in the sector had fallen by 50 percent in 2025.

Australia’s first climate war intensified under former prime minister Tony Abbott, who ignored renewable energy targets and opposed the then Labor government’s emissions trading plan in 2009.

Climate War 2.0 began in 2018, when then-Prime Minister Scott Morrison abandoned the National Energy Guarantee and declared that electric vehicles would “kill the weekend.” It gained momentum when Peter Dutton replaced Morrison in 2022 and promised a national commissioning of nuclear power plants in 2024.

Importantly, this plan recognized the need for emissions-free nuclear energy to combat global warming.