Decarbonising buildings, industry, and waste

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Video transcript

Net Zero Paper 2 - NSW Productivity and Equality Commission

The transition to net zero is well underway in electricity. But replacing coal fired power plants with renewables and storage will only get us part of the way. We need to rapidly decarbonize other sectors if we're going to have any chance of meeting our legislated emissions reduction targets.

To accelerate the transition, we can:

1. Move away from natural gas and electrify our buildings.
2. Replace fossil fuels in industry with low emissions electricity and zero emissions fuels like green hydrogen and ammonia.
3. Use the planning system to clarify the future of coal and gas operations.
4. Capture methane emissions from waste facilities across the state.

Right now, emissions are priced through the Commonwealth government's safeguard mechanism, but this only applies to the largest facilities. We can expand carbon pricing to small and medium-size facilities.

These payments do not need to be made to governments. They can be paid to businesses that help reduce carbon dioxide. We need to act now. If we do, we can have a net zero economy by 2050 and still be one of the best places to live, work, start a business, and raise a family. 

Please visit our website to find out more. Thank you.

Key findings

Around one third of emissions in NSW come from buildings and from manufacturing, construction, mining, and waste facilities. By 2050, the Commission estimates these sources will make up about half the state’s emissions.

The second paper in our Achieving net zero research series identifies how we can accelerate abatement from these sources to support our state’s legislated emissions reduction targets:

• Buildings: transition most gas use by electrifying existing buildings, improving energy efficiency in buildings, and local councils ending gas connections for new buildings (noting the NSW Government has ruled out imposing a ban at the state level).
• Manufacturing and construction: electrification into a low-emissions electricity system, energy efficiency, and uptake of zero-emissions fuels like green hydrogen and green ammonia in place of fossil fuels.
• Mining and extraction: government decisions on strategic planning and development consents to clarify the future of mining so operators can plan to reduce their fugitive and onsite energy emissions, while considering royalty impacts on the State’s budget, and new opportunities in critical minerals.
• Waste: on-site management to reduce and capture methane emissions.

Right now, the Australian Government’s Safeguard Mechanism prices emissions from large facilities in NSW. This could be expanded beyond the largest industrial and waste facilities, as recommended by the Commonwealth Productivity Commission in 2023. Alternatively, the states can step in to address emissions from these facilities, such as through New South Wales’ load-based licensing scheme. Quality regulation could also support abatement from these sources.