Australia is on a pathway to decarbonise the gas sector to help meet our nation’s emission reduction commitments under the Paris Agreement on climate change.
Today, residential and commercial customers use gas for cooking, space heating and hot water, and in industrial processes gas is used to provide heat and is a major feedstock to produce common goods such as plastics and fertilisers. Gas also plays a significant role in the reliability and stability of our power system by providing peak generation to back up renewable electricity. Gas is one of Australia’s most important exports, contributing $47 billion to our economy in 2019-20.
The value of the infrastructure that delivers this energy should not be overlooked. Continuing to use gas infrastructure can reduce emissions at half the cost to customers than electrifying the services provided by gas. This is because electrification will impose massive system-wide costs for grid reinforcements on customer bills.
In the three years since the launch of Gas Vision 2050, the need to reduce emissions has continued to gain community support and many energy supply businesses are offering carbon-neutral products in response to this demand. There is a growing domestic and international interest to decarbonise gas. Industry has responded by leading the development of research, pilot and commercial scale projects to demonstrate this.
In the next few years, natural gas, LPG and LNG will be supplemented by other gaseous fuels such as hydrogen, biomethane and renewable gas, creating exciting new opportunities. Indeed, in 2020, the first Australian homes will receive a blend of green hydrogen in their gas. The work we are doing aims to minimise impacts to customers while creating additional options to reduce emissions. Initially this will involve blending at low concentrations, followed by scaling up as we learn by doing.
We are on this pathway, but more work needs to be done. In this document we describe the strong progress that has been made in advancing the transformational technologies outlined in Gas Vision 2050 and outline key steps for the next decade to decarbonise Australia’s gas sector.