Albanese government announces new 2035 emissions targets. Source: Dan Himbrechts/AAP PHOTOS
Australia has taken another step on the road to net zero, formally adopting a 2035 emissions reduction target of 62 to 70 per cent below 2005 levels.
Prime Minister Anthony Albanese announced the pledge in Canberra on 18 September 2025, framing it as both ambitious and practical. It builds on the legislated 43 per cent reduction target for 2030, and the national commitment to reach net zero by 2050.
“This is a responsible target, backed by science and backed by a practical plan,” Albanese said. Climate Change and Energy Minister Chris Bowen added, “A target over 70 per cent is not achievable. That advice is clear. We have gone for the maximum level of ambition that is achievable.”
A closer look at the target
The new 2035 target sits between Australia’s mid-term 2030 obligations and its long-term 2050 net zero commitment. The government argues the range gives households, businesses, and industry a clear trajectory for investment and planning.
The announcement was coupled with the release of the updated Net Zero Plan (read the plan here), which outlines pathways for energy, transport, industry, and agriculture. The plan highlights technologies already in play, solar, wind, and batteries, as well as areas needing accelerated uptake, such as green hydrogen, carbon capture, and clean fuels.
Funding the transition
To support the new goal, the government unveiled a multi-billion-dollar package, including:
- $5 billion for industrial decarbonisation, designed to help heavy emitters like steel, aluminium, cement, and chemicals adopt cleaner processes.
- $2 billion boost for the Clean Energy Finance Corporation (CEFC), tasked with easing electricity costs and financing large-scale renewable projects.
- $1.1 billion for low-carbon liquid fuels, to back the shift in transport and aviation.
Officials stressed that policy certainty and finance will smooth the transition. The government says this approach will prevent sudden energy price spikes while accelerating investment in clean technology.
Read more about the $1.1 billion for low-carbon liquid fuels.
Expert advice vs government ambition
The independent Climate Change Authority (CCA) had earlier advised a stronger cut, 65 to 75 per cent by 2035, based on climate science and international benchmarks. Environmental groups have argued that anything less risks undermining Australia’s climate credibility.
On the other hand, Bowen has emphasised realism. “We are not in the business of making promises we cannot deliver. This target represents the maximum ambition achievable with current technologies and policy,” he said.
Climateworks Centre modelling suggests that, under a “high-action” scenario, Australia could cut emissions by up to 85 per cent by 2035, but that would require far greater speed in rolling out renewables, electrifying transport, and transforming industry.
Reactions across the board
The response has been mixed.
- Business groups broadly welcomed the clarity but cautioned against going further without international alignment, warning of risks to exports and competitiveness.
- Climate advocates, including the Climate Council, labelled the target insufficient and urged legislation to lock in higher ambition.
- The Greens called for net zero by 2035 and a halt to new fossil fuel approvals, saying the government’s plan does not go far enough to protect communities and nature.
- Opposition / Coalition: Shadow ministers criticised the target as unrealistic and costly. Sussan Ley said: “That’s not reasonable for households, for businesses, for the hard-working manufacturers in this country who want answers, and are seeing their electricity bills skyrocket.”
- Industry bodies:
- Australian Chamber of Commerce and Industry (ACCI) called the target “challenging” for businesses.
- Business Council of Australia (BCA) warned of potentially high costs if targets go beyond 70 per cent.
- Fortescue Metals (Andrew Forrest) said cost assumptions in some modelling undervalue opportunities in the clean economy.
This range of reaction highlights the tension between Australia’s economic reliance on resource exports and the global race to decarbonise.
What this means for Australians
For households, the most immediate changes will be incentives for rooftop solar, home batteries, and efficient appliances. Government programs are expected to expand financing support for electrification upgrades. Over time, this should reduce household reliance on gas and cut energy bills.
Transport will continue to electrify, with more charging stations and incentives for electric vehicles. While earlier media reports suggested new allocations, the government has so far emphasised expansion of existing EV infrastructure programs under its Driving the Nation strategy.
For communities tied to fossil fuel industries, the transition brings uncertainty. Coal and gas jobs are expected to decline, but the government points to new roles in clean energy, hydrogen, and critical minerals. Training and regional investment packages are expected to play a role in cushioning the shift.
What this means for business and industry
Businesses now face a clearer decadal roadmap. For companies planning long-term capital investment, the message is simple: build for a low-carbon future.
Heavy industry will be supported by the $5 billion decarbonisation fund, but the expectation is that it will transition to cleaner technologies or risk being left behind in both domestic and global markets.
Export-facing businesses, particularly in resources, will need to meet rising international climate expectations. Carbon footprints will increasingly determine trade access and competitiveness, with markets in Europe and Asia demanding lower-emissions products.
The infrastructure challenge
Australia’s electricity system will require faster build-out of renewables, storage, and transmission. The CEFC boost is designed to help finance this. But speed matters. Bottlenecks in approvals, supply chains, and workforce skills could delay progress.
Sectors that are hardest to abate, like cement and steel, will depend on innovation in hydrogen, electrification, and carbon capture. The government’s funding is a first step, but industry leaders warn that broader regulatory reforms will also be needed to scale up projects quickly.
The bottom line
Australia’s 62-70 per cent emissions cut by 2035 is a substantial lift in ambition compared to past decades. It sets a clearer pathway beyond 2030, though it falls short of the Climate Change Authority’s high-end advice.
For Australians, it means more renewable energy, new infrastructure, and gradual but noticeable changes in the way we power our homes, drive, and work. For business and industry, it signals that the era of delay is over: decarbonisation is now baked into the economic future.
The challenge will be in the execution. Delivering new infrastructure at speed, managing costs for households, and supporting workers through transition will decide whether Australia not only meets this target but positions itself as a clean energy leader.
