Australia’s energy policy has taken a strategic pivot in 2025, unveiling a What is Australia’s New Gas Strategy that aims to recalibrate the nation’s approach to energy security, economic growth, and decarbonisation. This shift comes amid mounting global pressure to reduce carbon emissions while securing energy independence. The updated framework outlines the Australian Government’s long-term commitment to natural gas as a transitional energy source, aligned with achieving net-zero emissions by 2050.

Strategic Role of Gas in Australia’s Energy Transition

Natural gas is positioned as a foundational fuel that will underpin Australia’s transition to a cleaner energy economy. While renewables like solar and wind continue to grow, gas is viewed as an essential “firming fuel” that ensures reliability in the national grid when intermittent renewables underdeliver.

The New Gas Strategy emphasizes gas as a complementary component of Australia's decarbonisation pathway, helping to phase out coal-fired power without compromising grid stability or industrial output. It’s also a stopgap for new technologies, such as green hydrogen and battery storage, which are still being scaled.

Key Policy Pillars of the New Gas Strategy

The strategy is anchored in five core pillars designed to modernize Australia’s gas sector while meeting international climate obligations:

1. Gas as a Transitional Energy Source

The federal government has redefined gas not as a destination, but as a transitional energy vector. By 2035, gas is expected to gradually decline in domestic power generation, replaced by renewables and emerging technologies. However, its short- to medium-term utility remains vital in balancing supply and demand.

2. Unlocking New Gas Fields with Environmental Safeguards

Australia’s new strategy identifies strategic basins, such as the Beetaloo and North Bowen, for expansion of domestic gas production. These developments will be subject to enhanced environmental assessments, ensuring operations comply with biodiversity and Indigenous land protections. The government has committed to net-zero upstream emissions by 2030, requiring producers to implement carbon capture, storage (CCS), and methane abatement technologies.

3. Securing Domestic Supply and Lowering Prices

One of the most critical aspects of the new strategy is securing affordable gas for domestic users—households, power generators, and manufacturers. The Mandatory Gas Code of Conduct has been reinforced to prevent market manipulation and ensure transparent pricing. This includes price caps, supply obligations, and regional reserve policies aimed at insulating Australian consumers from volatile global prices.

4. Supporting Industrial Decarbonisation

Industries such as aluminium, cement, and steel remain heavily reliant on gas. The government’s plan includes incentives and infrastructure support for industrial players to switch from coal to gas and eventually to low-carbon alternatives. This strategy includes:

1. Funding for low-emission technologies like hydrogen-ready boilers

2. Development of shared CCS infrastructure

3. Expanding gas pipeline networks to support energy hubs

5. Boosting LNG Exports with a Climate Lens

Australia remains one of the world’s top LNG exporters. The new policy promotes continued liquefied natural gas exports, particularly to key Asian markets, but ties future export approvals to climate compatibility assessments. Exporters will need to demonstrate alignment with the Paris Agreement and maintain credible pathways toward net-zero emissions across the supply chain.

Impact on Renewable Energy and Green Hydrogen Development

Although gas is front and centre in this strategy, the plan is not a retreat from renewables. Rather, it is a balancing act to prevent over-dependence on volatile weather conditions until storage technologies mature. Simultaneously, the government is investing in green hydrogen hubs, offshore wind projects, and grid modernization to prepare for a post-gas era.

By keeping gas in the picture temporarily, Australia aims to stabilize the energy transition without derailing progress toward climate goals or harming energy-intensive sectors.

Indigenous Land and Community Considerations

The strategy acknowledges the importance of community consent and Indigenous land rights in any new gas development. The government has strengthened consultation protocols and is working with Indigenous leaders to ensure free, prior, and informed consent is obtained before projects proceed. A portion of gas royalties will also be directed toward regional community development, ensuring long-term benefits for local populations.

Carbon Capture and Methane Reduction: Critical Enablers

Gas will only be viable in the long term if it is substantially decarbonised. The new framework mandates:

1. Aggressive methane emission targets aligned with the Global Methane Pledge

2. Adoption of advanced leak detection and repair systems

3. Large-scale investment in carbon capture and storage (CCS) networks, co-funded by the government and industry

These technologies are no longer optional; they are preconditions for both domestic production and export licenses.

Economic and Employment Outcomes

The New Gas Strategy is projected to:

1. Secure over 60,000 jobs in construction, maintenance, and downstream industries

2. Drive $40 billion in new infrastructure investment by 2030

3. Support Australia’s position as a leading low-emissions LNG supplier

Importantly, gas expansion will be coupled with training and transition programs to reskill fossil fuel workers into the renewable and clean tech sectors.

Balancing Climate Ambitions with Energy Realities

The New Gas Strategy is Australia’s attempt to reconcile climate action with economic pragmatism. It neither locks in fossil fuels indefinitely nor rushes into an underprepared renewable-dominated grid. The strategy delivers a realistic, phased transition, designed to keep the lights on while building the next-generation energy ecosystem.

Criticism and Controversies

Environmental groups have criticized the strategy for continuing fossil fuel development at a time when the IPCC calls for immediate reductions. Critics argue it could undermine climate credibility, especially if CCS technologies fail to deliver promised reductions. However, proponents emphasize that without gas, Australia risks energy insecurity, higher prices, and industrial decline, especially in regions lacking renewable infrastructure.

Conclusion: A Transitional Blueprint for a Net-Zero Future

Australia’s New Gas Strategy marks a significant recalibration of its energy policy. It recognises gas as an interim solution, not an endpoint. Through stringent regulations, climate safeguards, and integration with renewable and hydrogen pathways, the country aims to bridge today’s energy needs with tomorrow’s clean energy future.

The success of this strategy will depend on rigorous implementation, technological advancements, and genuine collaboration between government, industry, and communities. If executed effectively, it could become a global model for managing transitional fuels in a carbon-constrained world.