The mixed blessings of Australia's energy situation

This milestone shift in Australia’s energy landscape is the result of successive governments’ efforts to steer one of the world’s largest coal producers toward net-zero emissions—ambitiously accelerating the phaseout of coal-fired power generation. In September 2025, the incumbent Labor-led Australian government set a 2035 emissions target as an interim step toward its 2050 net-zero goal: cutting emissions by 62–70% below 2005 levels by 2035. The cabinet led by Anthony Albanese stated that this target is both ambitious and achievable—and aligned with Australia’s national interest. To meet it, Australia will support industry in reducing emissions via the Safeguard Mechanism; build a more resilient, clean-energy-powered economy; expand consumer access to energy-efficient and zero-emission vehicles through new vehicle efficiency standards; and assist Australians in joining the clean-energy transition via cheaper household battery programs. Currently, Australia’s carbon emissions are declining on track. However, figures released by the Australian Climate Change Authority on 27 November 2025 show the country is projected to achieve only a 48% reduction from 2005 levels by 2025. Australia’s decarbonization efforts have affected energy supply reliability and triggered strong opposition. On 13 November 2025, Australia’s conservative opposition Liberal Party announced it would abandon the 2050 net-zero target if elected—and remove that target from the nation’s Climate Change Act. Having been defeated by Labor in the 2025 general election, the Liberal Party pledged continued adherence to the Paris Agreement and commitment to cutting Australia’s carbon emissions—but declared it would not sacrifice household prosperity to achieve net zero. According to ABC News, Opposition Leader Sussan Ley said: “Our emissions reduction targets will never come at the expense of Australian households—that is the principle guiding every decision we make.” Ley added: “We remain committed to the Paris Agreement, and we have made it clear that setting long-term targets is not our policy—but net zero would be a welcome outcome.” Since being ousted from office in 2022, Liberal Party leaders have decided that, if elected, they would scrap the 2030 interim target. Australia ranks among the world’s top three liquefied natural gas (LNG) exporters and remains a major coal producer. Industry advocates warn that decarbonization efforts could harm some of Australia’s largest export-revenue-generating sectors—and successive governments appear to have taken note, refraining from curtailing natural gas production. Indeed, in 2025, the Labor government approved Woodside Energy’s extension of its North West Shelf LNG project, ensuring gas production continues until 2070. Rising electricity prices amid plans to shut down coal-fired power stations nationwide High cost of living—especially high electricity prices—is a widely shared reality for Australians and visitors alike. Yet, even as electricity prices continue rising, the Australian government is planning to accelerate the closure of coal-fired power stations, which remain the nation’s primary source of electricity generation. In mid-May 2025, data released by the Australian Energy Market Operator (AEMO) showed that Australia’s national average wholesale electricity price rose 9% year-on-year in the first quarter of 2025. Wholesale electricity prices surged sharply across southern states: Tasmania’s prices soared 67%, South Australia’s rose 20%, and Victoria’s climbed 15%.

Woodside’s first-half profits surge, while slashing $5 billion in new-energy investments

Buoyed by soaring global oil prices driven by the U.S.–Iran conflict, Woodside—the largest oil and gas company in Australia—recorded a sharp increase in first-half profits. At the same time, the company is quietly scaling back its investment in new-energy projects. In the first half of 2026, Woodside’s underlying after-tax profit—excluding one-off accounting items to reflect core performance—reached US$1.33 billion (approximately A$1.85 billion), up from US$1.25 billion (A$1.75 billion) in the same period of 2025. Chief Executive Officer Liz Westcott stated that the company maintained robust delivery capability despite extreme volatility in global energy markets. Speaking at Tuesday’s analyst briefing, she revealed: “The Middle East conflict temporarily removed 20% of global liquefied natural gas (LNG) supply and 13% of global oil supply from the market—directly boosting customer demand for Woodside’s products.” Through long-term contracts and crude oil product premiums, Woodside achieved an average realized price of US$74 per barrel of oil equivalent—20% higher than a year earlier. Westcott noted that although Brent crude and Japan–Korea LNG spot prices have retreated from their March–April peaks, constrained supply and volatile pricing are expected to persist for some time. On capital returns, Woodside announced a final dividend of US$0.57 per share (approximately A$0.797), reaching the upper end of its dividend payout range. Despite a 13% year-on-year decline in total production to 86.5 million barrels of oil equivalent—attributed to cyclone impacts—Woodside’s revenue still rose 13% year-on-year to US$7.45 billion (A$10.4 billion). Gordon Ramsay, analyst at RBC Capital Markets, commented: “This result is broadly in line with expectations.”

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