Submission: Gas Market Review Consultation
Submission to: Gas Market Review Consultation
Climate Integrity welcomes the opportunity to provide feedback on the Department of Climate Change, Energy, the Environment and Water’s Gas Market Review Consultation Paper.
Submission Summary
As one of the world’s largest exporters of LNG and fossil fuels, Australia has a disproportionate influence and impact on global emissions. The continued expansion of existing and new gas projects – and the policy infrastructure that enables it – is fundamentally incompatible with the goal of limiting global warming to 1.5°C, to which Australia is legally bound under the Paris Agreement.
Global responsibilities of developed nations and fossil fuel exporters and emitters have now increased following the International Court of Justice’s July 2025 advisory opinion, which clarified that states have legal obligations to prevent environmental harm from greenhouse gas emissions, including harm caused extraterritorially through fossil fuel exports. On-going production, consumption and granting of licenses and subsidies for fossil fuels could constitute wrongful acts under international law. Wrongful acts may trigger obligations to compensate other countries suffering from climate harm. In this context, the Australian government has a positive obligation to align all gas policy and regulation with international law and its comittment to the Paris agrement goals to limit warming to 1.5C.
Climate Integrity recognises the crucial importance of energy security for households and domestic businesses, and supports responsible energy policies that ensure energy remains available and affordable for users. However, within the context of global climate commitments and the constraints of a rapidly shrinking global carbon budget, responsible energy policies must recognise the short and long-term impacts of gas and ensure that all efforts are being made to transition away from fossil fuels and decarbonise as quickly as possible.
Climate Integrity is concerned that the perceived need for new gas projects is being driven by gas industry interests and not due to any credible forecast shortage in supply. Analysis from IEEFA and others shows that Australia already has enough proven reserves to meet domestic demand and fulfil LNG export contracts through at least 2040 – even before accounting for the significant demand reductions expected through electrification and energy efficiency.
Limitations in federal and state policy and slow adaptation of electrification measures are also contributing to the false narrative on the amount of gas that is required. There are no clear federal programs to assist emissions-intensive manufacturers to shift from gas to electric alternatives, nor comprehensive transition plans for gas-reliant sectors like food processing or alumina. Instead, the Future Gas Strategy explicitly states gas use in industry as “essential,” embedding long-term reliance.
Governments have repeatedly stepped back from electrification measures under pressure from the gas industry – including New South Wales’ 2023 legislation banning councils from introducing gas-free building requirements, and the slow rollout of federal and state-level household electrification incentives, which remain fragmented and underfunded despite clear economic and climate benefits.
These business interventions in the market and the limited decarbonisation incentives and the lack of government policy and support stall the transition and artificially inflate the perceived need for new gas supply.
The instruments under review – the Gas Market Code, ADGSM, and the Heads of Agreement – are centred around a gas preservation paradigm that assumes gas as essential and expanding. In reality, Australia’s gas use must sharply decline in line with a 1.5°C trajectory.
Protecting or entrenching fossil gas use beyond essential short-term needs risks undermining both our climate commitments and our economic competitiveness in a decarbonising global economy.
Recommendations
We urge the Review to explicitly shift its objectives from enabling gas growth to managing gas decline, by:
setting a clear timeline for fossil gas phase-out;
embedding demand reduction targets; and
ensuring that regulatory settings support the decarbonisation in line with Australia’s climate obligations and commitments.
