Demand for Australia’s coal and liquefied natural gas exports could dry up before 2040 if the country’s major trading partners follow through on their energy transition plans, according to new analysis released today.
The report, prepared by Climate Resource for WWF-Australia, examines what the most ambitious 1.5 degrees Celsius pathways still achievable would mean for Australia’s fossil fuel industries, covering both exports and domestic use, and assuming trading partners honour their commitments under the Paris Agreement.
On those pathways, Australia’s fossil fuel industries would shrink far faster than many assume, falling to about 5 per cent of current levels by 2050, with coal exports hit first and hardest.
Shipments would fall from around 362 million tonnes in 2024 to around 100 million tonnes in 2035, a decline of almost three-quarters.
The analysis finds thermal coal would be the first fuel to exit, between 2034 and 2039.
Metallurgical coal would follow between 2042 and 2050, while gas would exit between 2037 and 2049, with LNG sold under existing contracts ending in 2042.
Oil would be the last to go, between 2050 and 2067.
Countries with their own mines, such as China and India, would cut imports first.
The authors say the exit could come even sooner if shared infrastructure such as railways, ports and pipelines becomes too costly to operate as volumes fall.
The report’s authors, Dr Anita Talberg, Karla Spiller and Rebecca Burdon, said the research does not predict exactly when Australia’s fossil fuel industries will end, but outlines a plausible future in which many of Australia’s major trading partners keep accelerating the shift towards renewable energy, electrification, domestic energy security and lower-carbon industries.
Dr Talberg, Decarbonisation Lead at Climate Resource and the report’s lead author, said Australia’s fate is tied to decisions made elsewhere.
“Every solar farm and battery switched on across Asia rewrites Australia’s coal and gas export forecasts,” she said.
She called for a planned exit and a transition to new industries built around workers, regions and communities.
The COP30 Presidency of Brazil has published a global roadmap that describes the transition away from fossil fuels as urgent, inevitable and achievable, and recommends that countries develop national transition plans.
Australia has committed internationally to transition away from fossil fuels but has no timeline for doing so.
Rob Law, WWF-Australia’s Senior Manager, Energy Transitions, said the findings should end any complacency about the pace of change.
“Australia must stop treating fossil fuel decline as a distant future problem,” he said.
New industries, infrastructure, supply chains and workforce skills take years to build, he said, and waiting until falling demand is obvious to everyone would mean fewer choices, fewer opportunities and higher costs.
“This decade is our opportunity to build what comes next while we still have time, resources and choices,” said Law.
The full report, Phasing out Australia’s fossil fuel industry: what 1.5°C pathways mean for Australia’s coal, gas and oil, is available from Climate Resource.
