The analysis, based on scenario modelling by Climateworks Centre, provides the latest evidence of how energy efficiency and electrification can cut emissions in homes, commercial buildings, agriculture, industry and the resources sector. Together, efficiency and electrification could cut emissions by an average of 44 MtCO2-e per year between 2026 and 2035, far exceeding other demand-side options for cutting energy-related emissions, such as switching to biofuels or hydrogen over the same period.
Luke Menzel, CEO of Energy Efficiency Council (EEC) said, “Electrification and energy efficiency are shovel-ready solutions for climate action. They’re some of the most cost-effective and fastest actions we can take to cut emissions and reduce the impact of climate change. No matter what number the government picks for our 2035 target, if Australia is serious about reaching net zero by 2050, we must up the pace of appliance upgrades, building retrofits and industrial electrification now and not wait until the 2040s.”
“The federal government’s National Climate Risk Assessment demonstrates the urgency of taking action now. The Energy Efficiency Council is calling on the government to put energy efficiency and electrification at the centre of each of its sectoral emissions reduction plans. This analysis shows that doing so could support the achievement of an emissions reduction target for 2035 of at least 75%, while also making our homes and businesses more resilient to climate change impacts.”
“We must remember that Australia has also signed up to support a global target to double the global rate of energy efficiency improvement. This analysis shows we could double Australia’s average annual energy intensity improvement rate to 6% between 2025 and 2030, making sure we hold up our end of the bargain.”
Electrification will play a significant role in achieving emissions reduction targets across the economy. In the analysis electricity is projected to make up around 61% of the total energy fuel mix, increasing from 24% in 2025.
Highlights from the analysis show:
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Efficiency and electrification in the resources sector presents the largest abatement opportunity across the economy, with average yearly savings of 19.7MtCO2-e between 2025 and 2035. This is bigger than the impact of shutting down Loy Yang A power station, the largest point source of emissions in the electricity sector.
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Residential buildings present the largest abatement opportunity within the built environment, with average yearly savings of 6.5 MtCO2-e between 2025 and 2035 and increasing further out to 2050. This is the equivalent to powering around one million Australian homes with zero-emission electricity for a year.
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The industry and waste sector can deliver total emissions savings of 3.1 MtCO2-e per year on average between 2025 and 2035, reaching 8.7 MtCO2-e per year on average between 2046 and 2050. Between 2046 and 2050, this is equivalent to taking about 3.5 million cars off the road each year.
Menzel added, “To achieve these impacts, we’ll need policies to drive tangible changes in millions of homes and businesses. We’ll need to double the number of residential heat pump installs each year between now and 2035. In factories, we’ll need to upgrade thousands of inefficient industrial motors and pumps with efficient technologies like variable speed drives, while on farms and in mines it means replacing diesel-power equipment with battery-electric equivalents. None of this will happen without a concerted effort from industry and governments backing it in.”
Based on evidence from the modelling, the EEC is urging the federal government to:
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Centre efficiency and electrification within each of its six sector emissions reduction plans.
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Strengthen policies and regulations to accelerate the deployment of efficient electric technologies such as electric heat pumps and efficient motors.
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Establish a clear policy position on prioritising electricity as the primary replacement fuel for gas use.
The EEC is encouraging industry leaders, policymakers and stakeholders to explore this modelling and share their insights.
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