Australia\u2019s production of fossil fuels and the export value of coal and LNG are both predicted to plummet this decade, while at the same time the country reshapes its economy to reach net zero, according to Treasury modelling.<\/p>\n
The annual value of fossil fuel exports is predicted to fall by $50bn by 2035 if Australia sticks with its current policies and reaches emissions reduction cuts of 65% \u2013 an amount in the bottom half of the target range announced this week.<\/p>\n
Energy experts said the modelling was illustrating what many analysts had been warning for years.<\/p>\n
\u201cThis is dropping the truth bomb again,\u201d said Alison Reeve, the energy and climate change program director at the Grattan Institute.<\/p>\n
\u201cWe have been saying for a long time that if the rest of the world goes for net zero, then it will stop buying our coal and gas.\u201d<\/p>\n
Details of the outcome of Treasury modelling on the impacts of net zero<\/a> were released among a slew of climate reports this week <\/a>that included the Australian Climate Service\u2019s risk assessment and the government\u2019s report on how Australia can reach net zero by 2050.<\/p>\n Treasury modelled three different future scenarios \u2013 a \u201cbaseline\u201d where existing policies, targets and agendas are followed; a \u201crenewable exports\u201d scenario that includes growth in green hydrogen and other green exports; and a \u201cdisorderly\u201d scenario where little climate action is taken and weak or no targets for 2035 are set.<\/p>\n Across all three scenarios modelled by Treasury, the value of fossil fuel exports crashed from about $130bn in 2025 to less than $80bn in 2035. Coal and LNG exports will be worth just $30bn by 2050, according to the modelling.<\/p>\n A chart of Treasury modelling showing that as Australia heads to net zero the value of fossil fuel exports plummets<\/a>A chart of Treasury modelling showing that as Australia heads to net zero, the value of fossil fuel exports plummets<\/p>\n The amount of gas and LNG produced in Australia will also fall between 24% and 27% by 2035, and between 66% and 68% by 2050, according to the modelling.<\/p>\n Coal output will drop between 42% and 51% between now and 2035, and between 71% and 74% by 2050, the modelling says.<\/p>\n Tim Buckley, the director of thinktank Climate Energy Finance, said the fall in fossil fuel export revenue envisaged in the modelling was \u201conly 15 years away\u201d.<\/p>\n \u201cTreasury here is talking about fossil fuel exports reaching as low as $35bn in 2040. We have to realise that the gift horse can turn into the resources curse.\u201d<\/p>\n While the value of fossil fuel exports crash, export values for commodities needed as the world decarbonises \u2013 including green ammonia, green iron, alumina, aluminium and critical minerals like lithium, nickel and cobalt \u2013 are predicted to boom.<\/p>\n The export value of these \u201cgreen commodities\u201d in the modelling will climb from about $30bn today to between $80bn and $93bn in 2035 and $109-$178bn in 2050.<\/p>\n Reeve said: \u201cPart of the story of Australia becoming a renewable energy superpower is that while we are still a resource extraction-based country, but it becomes a different set of resources.\u201d<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n Privacy Notice: Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n Buckley said while he believed the green commodities \u201cwill boom\u201d, it was not assured that Australia was in a position to share that boom.<\/p>\n The Climate Change Authority (CCA) said this week that CSIRO modelling it had commissioned suggested \u201cAustralia\u2019s fossil fuel sector outputs will reduce 30% by 2035 if trade partners take action consistent with limiting warming to 1.5C, or 13% if the pace of global action aligns with 2C of warming\u201d.<\/p>\n \u201cThe magnitude of these long-term projected shifts underscores the need for early, strategic planning to safeguard Australia\u2019s economic resilience,\u201d the authority said.<\/p>\n Samantha McCulloch, the chief executive of gas industry group Australian Energy Producers (AEP), said gas would \u201cremain essential for Australia\u2019s energy security and transition to net zero by 2050\u201d.<\/p>\n She claimed the CCA had \u201crecognised that Australia\u2019s LNG exports will continue to underpin energy security and decarbonisation in our region\u201d.<\/p>\n