Australia’s New 2035 Strategy: Billions for Carbon Removals and Renewables
Australia sets a 2035 emissions cut of 62–70%, backed by carbon removals, offsets, and $5.4B in new funding for net zero transition.
Australia has introduced its updated Nationally Determined Contribution (NDC) under the Paris Agreement, aiming to slash greenhouse gas emissions by 62–70% from 2005 levels by 2035. This builds on the country’s 43% reduction goal for 2030 and highlights the growing role of carbon offsets and removals in national policy.
Newly planted tree in the foreground, with solar panels, wind turbines, and two businessmen set against a sunlit Australian landscape. AI generated picture.
‘This is an ambitious but achievable target — sending the right investment signal, responding to the science and delivered with a practical plan’, the government said when releasing the new framework.
Net Zero Priorities and Investment
Prime Minister Anthony Albanese’s administration set out a net zero strategy centred on five areas: scaling up the Australian Carbon Credit Unit (ACCU) scheme, expanding renewable power, increasing electrification and efficiency, developing low-carbon fuels, and backing emerging technologies with state funding.
To drive these measures, Canberra announced $5.41 billion (AUD8.2 billion) in fresh support. This includes $3.3 billion (AUD5 billion) for a Net Zero Fund dedicated to industrial decarbonisation and $1.3 billion (AUD2 billion) for the nation’s green bank to channel investment into clean energy projects.
Role of Carbon Removals
Treasury modelling shows land-based removals could double by 2050, with reforestation identified as the most scalable option. The government will partner with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to design a carbon removal roadmap, assessing new solutions alongside established methods.
Currently, the ACCU programme issues credits through environmental plantings and plantation forestry. Treasury projects that land-based abatement could rise by 9% by 2035, underlining the importance of reforestation.
In addition, a second funding round of the Carbon Capture Technologies Programme will provide $34.3 million (AUD52 million) for advancing carbon management technologies. The government’s plan notes: ‘CSIRO modelling suggests direct air capture (DAC) could augment land-based sequestration from 2035 onwards. However, the path for such technologies remains highly uncertain given current costs and lack of projects at scale.’
Market Response
The announcement sparked fluctuations in the ACCU market. Prices briefly climbed to $25.39 (AUD38.50) per tonne of CO 2 equivalent ahead of the NDC release but settled at $24.44 (AUD37.05) by the close of trade. More than 383,000 tonnes were exchanged during the session, outpacing volumes from earlier in the week.
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