Australia commits to cutting emissions by 62-70% by 2035 with $8 billion in new clean energy funding
What’s happening: Australia has committed to reducing greenhouse gas emissions by 62-70% from 2005 levels by 2035, backed by $8 billion in new funding. However, energy experts warn that rapid solar expansion could overwhelm grid infrastructure without coordinated investment in storage and stability systems.
Why this matters: This target represents one of Australia’s most significant climate commitments, affecting industrial transformation, energy infrastructure investment, and household power costs. Success depends on solving complex grid challenges while maintaining energy reliability during the transition to clean electricity.
Australia pledged Thursday to slash greenhouse gas emissions by 62 to 70 percent from 2005 levels over the next decade, marking a significant escalation in the nation’s climate ambitions as part of its international commitments under the Paris Agreement.
The Albanese Labor Government has accepted the Climate Change Authority’s independent advice and will set the 2035 climate change target at this range. Prime Minister Anthony Albanese described this as “an ambitious but achievable target – sending the right investment signal, responding to the science and delivered with a practical plan.”
The government outlined five priority areas for achieving the majority of reductions: clean electricity across the economy through more renewable generation supported by new transmission and storage; lowering emissions through electrification and efficiency including the New Vehicle Efficiency Standard; expanding clean fuel use by establishing a low carbon liquid fuels industry; accelerating new technologies through Future Made in Australia investments; and scaling up net carbon removals through eligible carbon storage programs.
The Authority’s 2035 Targets Advice recommends an emissions reduction target of 62–70% from 2005 levels, which the government has fully adopted. However, Australia on Thursday set its 2035 emissions target at a reduction of 62%-70% from 2005 levels, a lower figure than initially recommended by the country’s climate change authority, suggesting some compromise in the final target setting.
Infrastructure warning
While welcoming the government’s commitment, industry experts are sounding urgent warnings about the infrastructure challenges that could derail the clean energy transition if not properly addressed.
“EcoJoule Energy welcomes the Federal Government’s announcement of Australia’s 2035 emissions reduction target. This is an ambitious and necessary step forward in tackling climate change and positioning Australia as a leader in the clean energy transition,” said Mike Wishart, EcoJoule Energy founder.
However, Wishart delivered a stark warning about implementation challenges: “However, ambition alone is not enough. If we are to meet this target, the rapid expansion of rooftop solar must be matched with a far more detailed plan for how the electricity grid will adapt. Without proper investment in grid support and stability, the continued growth of rooftop solar risks creating significant technical and economic challenges – potentially leading to what can only be described as a catastrophe for the grid.”
Australia already leads the world in rooftop solar adoption, creating unique infrastructure pressures. “Australia already leads the world in rooftop solar uptake, but this success story brings with it new complexities. The growth of distributed generation must be paired with solutions that strengthen the grid, particularly at the fringe-of-grid and low-voltage levels. This means accelerating investment in shared neighbourhood storage and grid-supporting technologies,” Wishart explained.
The expert referenced ARENA research showing optimal battery placement strategies: “As identified by the Australian Renewable Energy Agency’s Grid vs Garage report, the most efficient location for batteries is not necessarily in individual households, but within the local low-voltage grid. Shared neighbourhood batteries can provide local network support, benefit from the diversity of customer demand, and deliver energy storage that is as cost-effective on a per-kWh basis as utility-scale batteries.”
Funding boost
The government backed its ambitious targets with substantial new funding commitments totalling over $8 billion across multiple clean energy initiatives and industrial transformation programs.
The centrepiece is a new $5 billion Net Zero Fund within the National Reconstruction Fund, specifically designed to help industrial facilities decarbonise and scale up renewables and low emissions manufacturing capabilities.
Additional funding includes $2 billion for the Clean Energy Finance Corporation to continue driving downward pressure on electricity prices, and $1.1 billion to encourage more production of clean fuels domestically. The government also allocated $40 million to accelerate kerbside and fast EV charging infrastructure across suburbs and regions.
Supporting programs include $85 million for frameworks and tools to help households and businesses understand and improve their energy performance, and $50 million for sports clubs implementing decarbonisation initiatives.
The global context provides justification for this investment scale. The government noted that global investment in clean energy projects is set to rise over USD $2 trillion, with Australia seeking to grow its share of this expanding market. Around 80% of global GDP is now covered by national net zero commitments, positioning this as an economic competitiveness issue rather than purely environmental policy.
Grid solutions
Addressing the infrastructure challenges requires coordinated action across government, industry, and regulatory bodies to ensure grid stability keeps pace with renewable energy deployment.
“EcoJoule Energy strongly urges government, regulators, and industry to collaborate on a coordinated roadmap that ensures storage and grid stability keep pace with the rollout of renewables. By investing smartly in localised energy storage and system resilience, we can ensure Australia’s clean energy future is not only ambitious, but achievable, reliable, and beneficial for all,” Wishart concluded.
The government’s approach recognises both existing capabilities and future potential. The target range enables greater ambition, acknowledging how quickly technology can change and the potential for even greater emissions reduction in the next decade. This range will see Australia halve its emissions compared to current levels, aligning with global efforts to limit dangerous global warming.
The Treasury’s economic modelling accompanying the announcement shows that an orderly path to net zero supports more jobs and investment, higher wages and living standards, and a bigger economy. The modelling examined both orderly net zero scenarios consistent with the government’s approach and a disorderly transition scenario, demonstrating the economic benefits of planned transformation.
The government has set a national target to reduce emissions by 62–70% below 2005 levels by 2035. This target is ambitious, achievable, and in Australia’s national interests, representing a significant step up from the 2030 target and providing a strong investment signal for clean energy infrastructure development.
The success of this ambitious program will depend on whether infrastructure investment and grid modernisation can match the pace of renewable energy deployment, ensuring Australia’s clean energy leadership doesn’t become a cautionary tale of good intentions undermined by inadequate planning.
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