10 MARCH 2026

Welcome to our news round-up. See previous issues here.

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RUNNING ON EMPTY: WAR ON IRAN SIGNALS URGENT NEED FOR AUSTRALIA TO END RISKY IMPORTED OIL DEPENDENCY

The last 10 days have underscored the existential risk Australia runs by remaining addicted to imported fossil fuels. On 28 February, the US and Israel launched a preemptive war against Iran. Iranian Supreme Leader Ayatollah Ali Khamenei was killed. The conflict is now widening regionally, impacting energy markets worldwide.  Yet the Australian government provides a $11 billion annual subsidy to keep us addicted to imported diesel, undermining our clean energy-powered Future Made In Australia, energy security and decarbonisation objectives, as well as the opportunities for significant domestic new infrastructure investment and regional employment.

Tanker traffic in the world's most critical energy chokepoint, the Strait of Hormuz, through which 20% of the world’s oil supply is transported, has effectively halted. Brent crude has since surged towards US$120/barrel.  Qatar’s national LNG company, 20% of global supply, halted production and Saudi Arabia shut its biggest domestic oil refinery after a drone strike. 

Australia, watching all of this unfold in real time, has just 25 days of diesel reserves and 29 days of petrol coming into 2026. Australia imports over 90% of its refined oil products – diesel, petrol, aviation fuel – as well as crude oil feedstocks. While our largest direct supplier is Singapore, those supply chains trace back through primary fuel extracted across the Gulf. We have essentially no buffer against what is unfolding.

Further, 20 years ago, Australia had eight oil refineries. Six of these have now closed, and the remaining two are increasingly dependent on imported crude oil and ongoing government subsidies to sustain their end-of-life operation.

From 2020 to 2023, average oil import prices into Australia rose 244% – from COVID lows to the peak exacerbated by Russia's invasion of Ukraine. Those prices smashed every household, every business, every freight operator. The price of energy was elevated to the central issue of the 2025 federal election. The cost of living crisis that has been plaguing Australians is, in no small part, an imported fossil fuel crisis.

The lesson is clear: fossil fuels are inherently volatile and expensive, and our dependence on oil imports puts us at serious risk. The Ukraine invasion, the June 2025 Israel-Iran 12-day war, and now this full-scale assault on Iran deliver the same message, again. 

We need to decarbonise and electrify our economy, starting with the sectors most exposed and vulnerable to global fuel supply shocks. That means accelerating renewable energy deployment and grid-firming capacity, strong fuel efficiency standards for passenger vehicles, and EV incentives to replace our petrol-dependent fleet. 

But above all, it means tackling the single largest consumer of imported diesel in the country: our mining industry.

And this in turn entails urgent reform to the idiotic federal Fuel Tax Credit Scheme, which pays our biggest miners hundreds of millions of dollars each per year to continue to guzzle imported diesel as it acts as a massive headwind to industry-wide decarbonisation.

Federal Treasurer Jim Chalmers needs to ignore the protestations of climate laggards like Rio Tinto and BHP, including the rubbish excuses by Rio Tinto’s CEO in Australia, Kellie Parker. She claims that pathways needed for the mining industry to decarbonise were “technologically immature or are fundamentally constrained by electricity availability” and “even where viable solutions exist, the absence of cost-effective, low-emissions supply renders timely large-scale implementation impossible.”

This is the rhetoric even as 54% of all heavy duty trucks sold in China In December were new energy vehicles, and as decarbonisation leader Fortescue works with its key Chinese partners to deploy world leading Chinese mining EV equipment here now, trial EV locos in the Pilbara, and deploy wind and solar at scale, showing the economics work. BHP has made strong electrification progress in Chile, and Rio Tinto is doing the same in Guinea, but both refuse to invest in their home market. The PM and Treasurer should ask why there, but not here?

>>> Read our full op ed in Pearls & Irritations, which includes details of CEF’s proposal to cap the FTC Scheme at $50m per company per year. Any refund above that should be directed into decarbonisation or foregone.

>>> See CEF quoted in the Financial Times on the oil and gas supply chain impacts of the US-Israel war on Iran; and on the Guardian Full Story podcast on the FTCS.

>>> See the new analysis by our partners at the Climate Council, Fuel Shock: why clean energy is our best defence

 >>> View  a live session on energy security, the shift to new energy, and the economic impacts of war with Tim Buckley on Michael West Media 11am AEST, Thursday 12 March  

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DATA CENTRES MUST BYO NEW GREEN POWER & DELIVER PUBLIC BENEFITS: NEW ALLIANCE

Data centres provide a massive investment opportunity for Australia but they are very energy and water hungry. The Australian Energy Market Operator (AEMO) projects that data centre demand could rise tenfold to reach 12% of the grid’s capacity by 2040. 

Concurrently, Australia is racing to replace fossil fuels with clean energy – and use that clean energy to power burgeoning green export industries. Without effective planning to enable new renewables, the surge in demand will push up retail power prices, significantly increasing climate pollution, slowing the transition to renewables and the realisation of a Future Made in Australia (FMIA), and straining electricity grids and scarce water resources.

Industry Minister Tim Ayres and Assistant Technology Minister Andrew Charlton are working with states and local councils on a set of data centre principles designed to manage the energy and water requirements of data centres in Australia without discouraging major investment in the booming sector. 

Climate Energy Finance is pleased to be part of Carbon Zero Initiative Alliance of unions, environment, community and renewable energy industry organisations calling for new data centres to be powered by 100% new build renewables, unlocking cheaper power, new regional jobs and grid stability, for all Australians to share in the benefits. To ensure public benefit, we are calling for data centres to:

🔋 Be powered by 100% additional renewables

🔋 Strengthen grid stability

🔋 Be appropriately sited to minimise impacts on nature and land use

🔋 Minimise embodied emissions and maximise efficiency and circularity

🔋 Use scarce water resources responsibly

🔋 Operate with transparency

🔋 Commit to earning and delivering ongoing social licence and

🔋 Support the training and upskilling of the workforce

Alongside CEF, the Carbon Zero Initiative Alliance includes Clean Energy Council, Smart Energy Council, Australian Conservation Foundation, WWF-Australia, Electrical Trades Union of Australia, Nature Conservation Council NSW, RE-Alliance, the Queensland Conservation Council, Environment Victoria and The Sunrise Project.

As ETU National Secretary Michael Wright said: "Data centres that invest in Australian energy and skills are welcome here – ones that drive up power prices, take drinking water and lock young people out of jobs are not."

Energy Minister Chris Bowen is on board, as reported in AFR: Data centres should bring their own green power: Minister Chris Bowen.

>>> See our joint media release:
https://carbonzero.org.au/data-centres

>>> See Tim Buckley and CEF in the media on this issue:

ABC TV Afternoon Briefing, The Guardian, PV Magazine, Renew Economy, Michael West Media.

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HEY NAYSAYERS! RENEWABLES INVESTMENT OUTPACING NET ZERO & RENEWABLES TARGETS

A detailed new analysis by RenewMap, released at the CEIG conference and reported in The Energy,  shows that Australia can deliver on Climate and Energy Minister Chris Bowen's ambitious 82% renewables by 2030 target and our net zero goals. 

Investment in new renewable energy projects is running laps around the targets required to achieve this. 

Some 450GW of renewables are currently under development in the NEM – more than twice as much as the Australian Energy Market Operator (AEMO) says is required by 2050 for Australia to meet its targets and replace its coal fleet.

Looking nationally, there are more than 670GW of utility-scale projects under development – with onshore wind (155GW) outpacing utility solar (90GW) and offshore wind (26GW), all topped by 185GW/530GWh of BESS capacity.

RenewMap's co-founder Alex Thompson notes: "The obstacles facing renewables lie not in “ambition or origination”, but the friction between stages, particularly approvals and grid connections, and how that affects capital’s confidence in delivery timelines.”

The best way to get Australian energy prices trending down sustainably is to get more net new supply of generation online ahead of demand growth. There are more than enough project proposals, there is more than enough capital, we just need to get on and move at twice the speed and scale to deliver. Rooftop solar and 250,000 behind the meter batteries really help solve this challenge, but we need a lot more utility scale projects – scale and speed!

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BATTERIES ARE THE BIGGEST STORY IN RENEWABLES & WILL REMAIN SO IN 2026

Batteries will again be the biggest energy disruptors in 2025. BESS and hybrid solar-BESS systems are rapidly eating gas and coal power plants' dinner, as solar has eaten coal's lunch, with BloombergNEF reporting the global benchmark cost for a four-hour battery project falling 27% to US$78MWh in 2025.

NSW Climate and Energy Minister Penny Sharpe's award of six 8-12 hour BESS projects last month is great to see, as is ASL's new Hybrid Generation LTESA consultation. Solar-BESS hybrids leveraging existing grid capacity will be fast to deploy and highly cost-competitive, enabling coal plant closures while enhancing reliability and easing cost of living pressures. The best way to lower energy prices sustainably is to build firmed new supply faster than demand growth.

Australia deploying 1,000 home battery systems daily –1GWh per month – into 2026 is simply mind-blowing. Well done Energy Minister Chris Bowen, Treasurer Jim Chalmers, and Finance Minister Katy Gallagher for trebling budget support to $7.2bn in December's MYEFO. This is what rewarding success looks like.

>>> See our full write up.

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CHINA’S 5 YEAR PLAN GOV’T WORK REPORT MIXED, BUT WITH A RECORD OF OVERDELIVERING 

Chinese Premier Li Qiang delivered the Government Work Report for the 15th Five-Year Plan (2026–2030) at the National People's Congress, formally marking China's shift from a "speed-first" to a "quality-first" economic strategy aimed at long-term sustainability.

• GDP growth is targeted at 4.5-5.0% for 2026. While western media frames this as a slowdown, it is roughly twice the rate of most OECD countries, from a record high base.

• Economic rebalancing continues away from property-development-led growth to domestic consumption and consumer spending, reducing a key carbon pollution driver.

• Carbon intensity is targeted to fall 3.8% per unit of GDP in 2026,  though relative to GDP growth, national emissions may still rise ~1%, after the historic 0.3% decline in 2025.

• The FYP targets a 17% reduction in emissions per unit of GDP by 2030 under its "carbon dual control" framework. Critics note this lacks the ambition climate science requires; we hope China will continue its record of overperformance.

• Green transition features as a dedicated budget section, with commitments to coordinate emissions cuts, pollution reduction, and economic growth, alongside hydrogen power trials and expanded EV charging infrastructure, plus accelerated deployments of pumped hydro storage and nuclear, along with huge growth in BESS accelerating the electrification and decarbonisation plans.

• R&D spending to grow 7% pa to 2030, reinforcing a pivot to innovation-driven growth.

• Non-fossil energy is targeted to reach 25% of total primary energy consumption by 2030, up from 20% in 2025, a likely conservative target.

>>> See our full write up.

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GOING GLOBAL: UPCOMING REPORT ON CHINESE OUTBOUND INVESTMENT INTO CRITICAL MINERALS & STRATEGIC METALS

This month, CEF will publish its latest flagship report on China, tracking its massive outbound foreign direct investment (OFDI) into upstream and midstream critical minerals and strategic metals and commodities – rare earths, lithium, nickel, high-grade iron ore, copper, bauxite etc – key to all zero emissions industries of the future. The report includes a foreword from Assoc. Prof. Marina Zhang, Australia China Relations Institute (ACRI), UTS. 

As our new report maps out, in an increasingly fraught geopolitical landscape, China is acting strategically to partner with nations from Zimbabwe to Indonesia to control supply chains in these sectors, to fuel its domestic industries and ensure its energy independence, prosperity and national security.

Western projects are now burdened with a significant capital intensity disadvantage relative to China. China has cost, scale, integration and technology advantages right across the mining value chain, as well as centrally controlled policy certainty and consistency, public capital markets support, and a clear long term strategic government framework and direction.

Our new report builds on our previous report on China’s massive investment into cleantech around the world – batteries, EVs, wind, solar etc – to look at the resources subsectors that underpin cleantech, and comes to the same conclusion. The west needs to understand ‘China Speed and China Scale’, and their long term strategic planning, so we can respond effectively and successfully, and ensure the current overreliance on Chinese technology and manufacturing leadership moves to a more geopolitically sustainable outcome.

This is crucial for Australia, as a key trade partner of China and a nation rich in critical minerals and strategic metals, but failing to date to add value onshore.

Stay tuned for the launch of our new CEF China OFDI in Resources report later this month.

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SA GOV’S WHYALLA GAS LOCK-IN EXACTLY THE WRONG STRATEGY FOR GREEN IRON & STEEL

In November 2025, CEF produced a strategy for the Whyalla Steelworks to enable its transformation and decarbonisation, in which we sounded an alarm to the Malinauskas Government that deploying public subsidies to lock in high-emissions fossil gas in an open-ended ‘transition phase’ for Whyalla to renewables based operations would be a grave strategic misstep with drastic and ongoing budgetary and national interest impacts.

CEF highlighted that a gas ‘transition’ phase for the new owners of the Whyalla Steelworks would, in reality, translate to a multimillion dollar underwriting scheme of a new gas pipeline to the Upper Spencer Gulf, and risked billions in taxpayer funds in bridging the commercial gap on methane gas, both through a domestic and international lens with rapidly emerging competitor markets. 

Like clockwork, last week week saw Premier Malinauskas say a re-elected Malinauskas Labor Government will underwrite gas supply to Whyalla through the expansion of the gas pipeline and associated infrastructure to the Upper Spencer Gulf. This comes after the Malinauskas Government signed a binding term sheet with Santos for 200PJ of methane gas over 10-years from the Cooper Basin to ‘support the Whyalla Steelworks transformation into a low-emissions green iron facility’. 

At the Australian Energy Nation Forum in 2025, Premier Malinauskas said “South Australia is set to play an oversized role in contributing to realising the nation’s net zero ambitions, provided we get the gas. My support for gas is underpinned by my support for net zero.”

Contrary to this long-term gas lock-in deal, gas is not essential to the decarbonisation of South Australian iron and steel. Expensive gas is not a viable solution for Whyalla, in the interim or in the long-term. 

Leaving aside the flawed assumption that gas is key to phasing in decarbonisation, it is economically unviable. SA has some of the highest-cost domestic methane gas in the gas producing-world, putting the state at one of the largest comparative disadvantages in Australia in industrial processing and manufacturing powered by gas, with a declining local gas resource.  Santos reported it expects to book >15-25% IRRs on the back of this new deal!

South Australia and Australia must not facilitate the increasing exposure and dependency of Australia’s sovereign manufacturing capacity with the predatory oligopoly of Australia’s gas industry that has directly eroded the viability of energy-intensive manufacturing in Australia. 

More subsidised methane gas for decades to come undermines our energy system transformation and net zero goals, it does not underpin it. If we’re going to do massive subsidies, let’s at least back the best solution for a decarbonising world.

>>> See Matt Pollard’s op ed in Renew Economy demonstrating why gas lock-in is a grave strategic error.

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AJ for Tim, Matt and Fatima

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