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Australia’s newly introduced 2035 emissions discount goal, set at 62–70% under 2005 ranges, marks a defining second within the nation’s local weather coverage evolution.
Backed by the discharge of a nationwide Net Zero Plan and 6 sector-specific decarbonisation methods, this framework presents companies readability on the nation’s pathway to internet zero. The goal alerts a decisive shift in expectations for company local weather motion, regulatory reform, and funding planning.
There have been a variety of key current developments in nationwide local weather coverage, together with:
The 2035 Target and Net Zero Plan set out Australia’s pathway to its 2050 internet zero goal. The Net Zero Plan contains two milestones, being the 2030 goal of 43% under 2005 ranges and the brand new 2035 Target of 62‑70% under 2005 ranges. It additionally units out the Government’s 5 decarbonisation priorities, that are to extend renewable power throughout the financial system; decrease emissions by electrification and effectivity; broaden using ‘clear fuels’ (eg low carbon liquid fuels, biomethane, renewable hydrogen and renewable ammonia); speed up new emissions discount applied sciences; and improve the dimensions of carbon removals to stability emissions.
Released alongside the Net Zero Plan, six sector-specific plans define pathways, insurance policies and funding priorities to satisfy the 2035 Target. Each plan addresses distinctive decarbonisation challenges and alternatives.
Key priorities by sector:
The Government additionally introduced funding for quite a few applications, together with:
The National Climate Risk Assessment supplies a complete overview of present and future local weather dangers. It identifies 63 nationally important dangers, with 11 examined intimately, together with threats to pure ecosystems, essential infrastructure, provide chains, the actual financial system and first industries.
The report makes use of a risk-based strategy throughout eight methods to find out who and what’s most susceptible to local weather hazards, guiding adaptation and resilience planning.
The National Adaptation Plan (NAP) was designed to reply to the nationally important local weather dangers recognized within the National Climate Risk Assessment by the creation of a framework for presidency motion on local weather change.
In 2024, the Climate Change Authority (CCA) launched its Targets, Pathways and Progress Report, which proposed an emissions reductions goal vary of 65-75%, proposing it as formidable however achievable, offered that ‘sustainable motion [was] taken by governments, enterprise, traders and households to attain it’.2 The newly announced 2035 Target sits at the lower end of this range and reflects the CCA’s more recent advice that a goal of 62-70% is Australia’s highest possible ambition.3
Looking overseas, Australia’s 2035 Target is not as ambitious as the 2035 targets adopted by the UK and Norway. However, it is relatively ambitious in comparison to 2035 targets adopted by a number of other OECD nations, including Japan, New Zealand, Canada and the US. European Union countries have not announced their new 2035 targets.
| Country | 2030 target | 2035 target | 2050 target |
|---|---|---|---|
| Australia | 43% below 2005 levels | 62-70% below 2005 levels | Net zero |
| UK | 68% below 1990 levels | 81% below 1990 levsls | Net zero |
| Norway | 55% below 1990 levels | 70-75% below 1990 levels | 90-95% below 1990 levels |
| Switzerland | 50% below 1990 levels | 65% below 1990 levels | Net zero |
| Brazil (COP30 host) | 50% below 2005 levels | 59-67% below 2005 levels | Carbon neutrality |
| Japan | 46% below 2013 levels | 60% below 2013 levels | Carbon neutrality |
| NZ | 50% below 2005 levels | 51-55% below 2005 levels | Net zero (excluding methane) |
| Canada | 40-45% below 2005 levels | 45-50% below 2005 levels | Net zero |
| USA | 50-52% below 2005 levels | Was 61-66% below 2005 levels but US has since pulled out of UN climate process under Trump. | Net zero |
| Russia | 30% below 1990 levels | 65-67% below 1990 levels | Net zero by 2060 |
| Iceland | 41% below 2005 levels | 50-55% below 2005 levels | Carbon neutral by 2040 |
| China | 65% CO2 emissions reduction per unit of GDP, from 2005 levels. | 7-10% below peak levels* | Net zero by 2060 |
Source: See footnotes 4-15
*This target has not officially been submitted.
Australia’s 2035 Target is less ambitious than those legislated by several states, including Queensland (75%), New South Wales (70%) and Victoria (75-80% respectively).16 However, the Government has proposed a target which it views as achievable with regard to Australia’s national and economic interest, and has not sought to set an overly ambitious target which, as the CCA previously suggested, may risk significant levels of economic and social disruption, and put progress achieved to date at risk.17
Leaving aside the level of ambition, the announcements provide much-desired clarity on the country’s policy trajectory. The Investor Group on Climate Change, which represents superannuation funds, fund managers, asset consultants and investment and industry associations highlights that the sector pathways provide detail that can give investors ‘useful and actional information that allows them to allocate capital with confidence’.18 The Business Council of Australia has stated that a clear plan and ambitious achievable targets ‘give business investment certainty and enable the continued delivery of affordable and reliable energy, as we move towards net zero’.19
The 2035 Target has a number of implications for businesses. Potential implications could include:
The Safeguard Mechanism requires large industrial facilities (over 100,000 tonnes CO₂‑e of scope 1 emissions annually) to cut emissions in line with national targets—currently 43% below 2005 levels by 2030 and net zero by 2050. Most facilities must reduce emissions by 4.9% each year to 2030, then 3.285% annually to 2050, subject to five‑year reviews.
The new 2035 target (62–70%) will influence the 2030–2035 baseline process, and further reforms may be needed. Options include lowering the 100,000‑tonne threshold to capture more facilities and maintaining the 4.9% annual decline rate beyond 2030. Both measures have been recommended by the Productivity Commission and the Climate Change Authority, and align with NSW’s proposal to regulate facilities emitting over 25,000 tonnes. More clarity is expected after the scheduled Safeguard review in 2026–27.
Current policy settings are likely only to bring emissions reductions down by 50-51% by 2035, so meeting a 62%-70% 2035 Target will likely require broader federal reform, although the nature of that reform has not been made clear.
The 2035 Target may influence the long anticipated overhaul of the EPBC Act, which is due to progress in the balance of this year. While those reforms are unlikely to introduce a formal ‘climate trigger’, climate policy will likely influence the design of those reforms, with the removal of barriers to low emissions energy projects set to be a key area of focus.
Transport reform is also critical. The New Vehicle Efficiency Standard, released in January 2025, sets tailpipe emissions limits for new passenger and light commercial vehicles. The CCA advises that half of all light vehicles sold to 2035 must be electric to meet the lower end of the target. The Electric Vehicle Council stresses equal focus on heavy vehicle decarbonisation and emerging technologies such as vehicle to home and vehicle to grid.
Electricity will bear much of the load. Although the Government has not set a 2035 renewable energy target, it maintains its 82% renewables goal for 2030. Achieving the 2035 target will require an accelerated rollout of renewables to meet rising demand from electrification across multiple sectors.
At this stage, there is no indication the Government is planning to seek to enshrine the target in legislation, as it has done for the 2030 target in the Climate Change Act 2022.
Many Australian companies have adopted net zero targets and are developing climate transition plans—strategic documents outlining targets, actions and resources for decarbonisation. Until recently, most relied on voluntary or overseas frameworks. This is changing, with Treasury releasing draft corporate climate‑related transition planning guidelines in August 2025.
The draft guidelines recognise the importance of considering government adaptation and transition policies when identifying a business’ adaptation risks and opportunities, at a federal, state and territory, and local level.20 They also emphasise that implementation strategies should map decarbonisation levers across sectors and regions, making the new sector pathways critical references.21 The Transition Planning Consultation Paper also encourages organisations to consider the NAP and any other relevant government policies, ‘to identify synergies with the overarching approach governments are taking to address climate risk in Australia’.22
These documents provide actionable inputs for corporate transition plans. Businesses should re‑test key assumptions and interdependencies in existing or new plans against the latest government policies, analysis and data to mitigate misleading or deceptive conduct risk (eg validating grid‑decarbonisation assumptions in light of the Electricity and Energy Sector Plan).
Many businesses are well underway in their preparation for the first year of mandatory climate reporting under the Corporations Act 2001 (see our earlier Insight).
The 2035 Target, National Climate Risk Assessment and related documents provide important context, data and analysis to inform these disclosures. They also set a benchmark against which reports may be scrutinised.
For example, sector pathways may constitute ‘reasonable and supportable information’ for companies in covered sectors, while the Net Zero Plan’s focus on a circular economy and low‑carbon fuels could strengthen assessments of climate‑related opportunities. Similarly, data from the National Adaptation Plan can inform scenario analysis and risk assessments.
Organisations should critically assess the materiality of these developments for their own reporting and integrate relevant insights into data‑gathering ahead of their first sustainability report.
Australia’s heightened climate ambition places greater emphasis on the circular economy as a decarbonisation lever—reducing emissions from material extraction and manufacturing, diverting waste from landfill, cutting methane, improving efficiency and extending product lifecycles.
The Net Zero Plan highlights the Government’s goal to double Australia’s circularity by 2035, supported by the new National Circular Economy Framework, which sets three targets:
Circular initiatives are particularly relevant to the industrial, built environment, agriculture, food and resources sectors. CSIRO modelling suggests doubling circularity could deliver a $26 billion GDP boost by 2035.23 Companies should expect increased funding, investment incentives and regulatory reform, including stricter compliance obligations and harmonised standards for recycled materials and traceability. Businesses offering recycling, resource recovery and product stewardship solutions may benefit from growing demand for secondary materials, biofuels and waste‑to‑value innovations.
States and territories—which approve and condition new projects and regulate existing facilities—will materially shape progress toward the 2035 Target. National and state targets can inform state decision‑making, and any changes to the Safeguard Mechanism may indirectly influence how planning and environmental approvals are administered. In July 2025, the NSW, South Australian and Victorian EPAs issued the Guiding Principles for Alignment with the National Greenhouse and Energy Reporting Scheme and the Safeguard Mechanism, signalling that states might undertake complementary approaches that draw on federal frameworks.
On the bottom, necessities are tightening. Queensland now expects environmental authority candidates to evaluate emissions impacts for every exercise and description controls (together with GHG abatement plans). From 2026, the NSW EPA would require licensed amenities emitting greater than 25,000 t CO2‑e (scope 1 and a couple of) yearly to report emissions, publish Climate Change Mitigation and Adaptation Plans, and prioritise on‑web site abatement over offsets—affecting about 200 amenities, together with some exterior Safeguard/NGER protection.
The Victorian EPA additionally not too long ago launched a Statement of Regulatory Intent on Climate Change for 2025–2027. This technique clarifies the Victorian EPA’s strategy to regulating the causes and penalties of local weather change underneath the Environment Protection Act 2017 (Vic). Beyond approvals, state power coverage will proceed to drive decarbonisation—for instance, Victoria has re‑established the State Electricity Commission and legislated a 95% renewables goal by 2035.
Taken collectively, the 2035 Target and Net Zero Plan, sector pathways and the National Climate Risk Assessment present a clearer coverage compass and a richer proof base, at the same time as ambition varies relative to main states and friends.
For companies, this implies:
Also count on doable Safeguard Mechanism reforms (together with protection and decline charges) following the 2026-27 overview, parallel EPBC Act modifications and tightening state regimes (eg NSW EPA necessities from 2026, Queensland abatement planning and Victoria’s regulatory intent). The round financial system agenda, underpinned by the National Circular Economy Framework and its targets, alerts rising funding, requirements and procurement pull for useful resource effectivity, restoration and waste‑to‑worth options.
Businesses that combine these alerts now might be finest positioned to safe capital, approvals and aggressive benefit on the trail to 2035.
This web page was created programmatically, to learn the article in its unique location you may go to the hyperlink bellow:
https://www.allens.com.au/insights-news/insights/2025/10/the-future-is-written-the-implications-of-australias-2035-emissions-target/
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This web page was created programmatically, to learn the article in its authentic location you…
This web page was created programmatically, to learn the article in its unique location you…
This web page was created programmatically, to learn the article in its unique location you…
This web page was created programmatically, to learn the article in its authentic location you…
This web page was created programmatically, to learn the article in its unique location you…
This web page was created programmatically, to learn the article in its authentic location you'll…