Australia could achieve almost a fifth of the emissions cuts needed to meet a 75 per cent reduction target by 2035 through energy efficiency and electrification, according to new analysis released by the Energy Efficiency Council (EEC).
The data, based on Climateworks Centre modelling, shows that electrification and efficiency together have the potential to cut around 44 MtCO2-e annually between 2026 and 2035, a far greater impact than other demand-side abatement options such as biofuels or hydrogen.
Luke Menzel, Chief Executive of the EEC, said the findings highlight the immediate opportunity for action.
“Electrification and energy efficiency are shovel-ready solutions for climate action,” said Menzel.
“They’re some of the most cost-effective and fastest actions we can take to cut emissions and reduce the impact of climate change.
“No matter what number the government picks for our 2035 target, if Australia is serious about reaching net zero by 2050, we must up the pace of appliance upgrades, building retrofits and industrial electrification now and not wait until the 2040s.”
The report shows electricity is set to grow from 24 per cent of the energy mix in 2025 to about 61 per cent by 2035, underscoring the central role of electrification in decarbonisation.
Among the sectors analysed, the resources industry presents the largest abatement opportunity, with average yearly emissions reductions of 19.7 MtCO2-e to 2035 — comparable to the effect of closing Loy Yang A power station, the country’s biggest single source of power generation emissions.
In the built environment, residential buildings could save an average of 6.5 MtCO2-e annually to 2035, equal to powering one million Australian homes with clean energy each year.
The industry and waste sector can deliver 3.1 MtCO2-e annually in savings to 2035, scaling to 8.7 MtCO2-e between 2046 and 2050 — equivalent to removing 3.5 million cars from the road each year.
Menzel said the federal government’s recent National Climate Risk Assessment underlines the urgency of investment in these areas.
He stressed that electrification and efficiency should be at the core of sectoral emissions reduction plans to achieve a 75 per cent cut by 2035 while also strengthening community resilience.
“The federal government’s National Climate Risk Assessment demonstrates the urgency of taking action now.
“The Energy Efficiency Council is calling on the government to put energy efficiency and electrification at the centre of each of its sectoral emissions reduction plans.
“This analysis shows that doing so could support the achievement of an emissions reduction target for 2035 of at least 75 per cent, while also making our homes and businesses more resilient to climate change impacts,” he said.
Australia’s international commitments were also highlighted, with the EEC stressing the need to align with global efficiency goals.
“We must remember that Australia has also signed up to support a global target to double the global rate of energy efficiency improvement,” said Menzel.
“This analysis shows we could double Australia’s average annual energy intensity improvement rate to 6 per cent between 2025 and 2030, making sure we hold up our end of the bargain.”
However, reaching these savings will require major policy and regulatory support to speed deployment of technologies such as heat pumps, efficient industrial motors and electric equipment in mining and agriculture.
Menzel noted that the scale of upgrades required — from doubling annual residential heat pump installations to transitioning diesel-powered farm machinery and mining equipment to electric equivalents — would not occur without government backing.
The EEC is urging the federal government to prioritise electrification and energy efficiency across all six sectoral emissions reduction plans, strengthen regulatory frameworks to accelerate deployment of efficient electric technologies, and explicitly position electricity as the primary replacement fuel for gas.
The Council is encouraging industry and policy leaders to review and respond to the new analysis, which is available on its website.
