Federal Government sets ‘ambitious’ 2035 emissions target

The Federal Government has set what it calls an “ambitious but achievable” emissions reduction target of 62–70% below 2005 levels by 2035.

The target was released alongside the Federal Government’s Net Zero Plan and supporting documents, including the National Climate Risk Assessment (NCRA).

The NCRA showed that 2°C warming would have a disastrous impact on Australia’s economy, health and survival. 2°C will double severe and extreme heatwave events and increase time spent in drought by up to 70%, according to the assessment.

The assessment found heat-related mortality would increase by 190% in Sydney, 126% in Melbourne and 139% in Perth. More than 1.5m coastally residing citizens would be at risk from sea level rise, including across the Torres Strait Islands.

Fortescue (ASX: FMG) founder and executive chairman Dr Andrew Forrest commends the government for setting a target that “reaches beyond the ambition of 2030”.

“At a time when some nations are stepping back from their commitments, Australia has chosen a different path – setting a 2035 target that builds upon, and reaches beyond, the ambition of 2030,” he said.

“For this, the government deserves commendation. It has shown the courage of leadership. Yet let me be clear: the upper range of its target – 70% – must be a floor, not a ceiling.”

Dr Forrest says the new target is a step forward, but it sends a signal that Australia is comfortable with the status quo.

“Australia is capable of much more and the world is watching,” he said.

“The duty now falls to industry to make this target not the ceiling of our ambition, but the floor upon which Australia’s climate leadership is built. Every delay means higher climate damages, lost opportunities and a weaker economy.”

Recent modelling commissioned by Fortescue and Future Group from Deloitte shows that a target of more than 75% would drive significant investment, innovation and infrastructure transformation across Australia, generating $227b of additional GDP by 2035 relative to a 65% per cent target and $20bpa of extra investment (2025–2035).

However, BCA chief executive Bran Black says the target range is ambitious and, while achievable, will require significant capital investment, major reform and exceptional collaboration between the public and private sectors.

“Even the lower end of the range will be challenging, requiring significant capital investment over the next decade and EPBC approvals processes to be comprehensively and quickly addressed,” he said.

“We strongly support net zero by 2050, and getting this right is about balancing the needs of future generations while ensuring Australian industry can continue to compete in the global market today.”

The Business Council of Australia’s report, Australia 2035 — Maximising Our Potential, showed significant investment alongside enabling reforms will be required to achieve 62% by 2035.

The report mapped the investment, enabling reforms and policy interventions required across a range of emissions reduction scenarios while also noting an even greater and substantial uplift in investment, and very significant policy changes, will be required if 70% is to be met by 2035.

This includes at least $400b in capital investment and 59,000 skilled workers in electrical trades and engineering alone for a 2035 target of 60%.

As part of its Net Zero Plan, the Federal Government has announced it will allocate $8b in funding help achieve its target.

• A new $5b Net Zero Fund in the National Reconstruction Fund, to help industrial facilities decarbonise and scale up more renewables and low emissions manufacturing
• $2b for the Clean Energy Finance Corporation to continue to drive downwards pressure on electricity prices
• $1.1b to encourage more production of Clean Fuels in Australia
• $40m to accelerate the roll out of kerbside and fast EV charging across suburbs and regions
• $85m for frameworks and tools to help households and businesses understand and improve their energy performance
• $50m for sports clubs doing their bit to decarbonise and drive climate action

The Federal Government also released the Treasury’s economic modelling, the Climate Change Authority’s advice and Australia’s nationally determined contribution to support the climate target.