Submission: Gas Market Reforms must prioritise future-proofed export industries and domestic consumers
19 August 2025
The Gas Market Review is an opportunity for government to bed down the decarbonisation agenda in key policies, prioritising decarbonisation of Australian exports and providing domestic consumers lower-cost gas, as renewable alternatives are being developed at scale.
IGCC commissioned an analysis of Australian gas demand, and found that the industry faces extremely high stranded asset risks, particularly post-2030. More recently, the World Energy Outlook from 2024 projects a significant supply glut for LNG by 2030, which will put downward pressure on spot prices. With many major contracts for Australian LNG expiring in the early to mid 2030’s, other markets such as Qatar and the US present cheaper alternatives to Australian LNG. Neither the Future Gas Strategy nor this Review have adequately addressed this concern.
Given this market outlook, there is a greater rationale for reducing domestic demand for natural gas where electrification presents a compelling economic case (such as households and low temperature heat applications) and making more supply available where options to decarbonise are limited. Natural gas continues to be the most expensive source of energy in the national electricity grids, with domestic prices being closely linked with volatile international spot prices.
The best solution to reducing costs to consumers is for decarbonised alternatives to come online, and sooner; IGCC recommends that demand reduction strategies and more investment opportunities for renewable energy, generation, shaping and firming should be prioritised in this Review.
Recommendations:
All policy and regulation settings considered in this review align with the decarbonisation objectives outlined in the forthcoming sector plans and Net Zero 2050 Plan.
- Policy that seeks to lock-in prolonged exploration, consumption and export of natural gas directly detracts from Australia’s capability to become a renewable energy superpower by creating confusing market signals.
The sector plans, particularly energy and resources, include export addendums which consider decarbonising emissions-intensive trade.
- To ensure that regional transition to net-zero happens in lockstep, cultivating markets of supply and demand for renewable energy and green commodities.
- Demand reduction strategies across domestic and international markets (for energy, electricity and industrial sectors) that include detail around establishing alternative green energy trade. This will smooth transitions across the region, and will buffer the Australian economy against price imposts on carbon as Asian markets develop stronger emissions trading schemes.
Read the full submission.