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10 DECEMBER 2025
Welcome to our news round-up. See previous issues here.
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END OF YEAR DIRECTOR’S MESSAGE
What a year 2025 has been! Generally positive for energy system transformation, at least for those of us working in the Asian Century, thanks to the growing global leadership evident from China, our #1 trade partner!
As CEF has discussed all year, it is pleasing to see Australia by and large pivoting to embrace the investment, employment and net export opportunities in zero-emissions industries of the future, although it still feels we take at best two steps forward before taking one backwards. But the awareness and understanding of what ‘China Speed and Scale’ really means is becoming far more mainstream, and shows that responding to the climate science is entirely achievable with existing technologies plus the right government settings.
With a record 50.1% share of the National Electricity Market derived from renewables in the month of November 2025, and wholesale electricity prices falling significantly, we are making progress and 82% renewables by 2030 is still within sight.
A key policy goal for the Federal government should now be ending the gas price extortion racket being perpetrated on the Australian people and industry by the gas cartel.
The Australian government is increasingly aware of the need to embrace Dr Liz Thurbon’s Green Energy Statecraft vision, and the associated need for public-private collaborations on transformational green industrialisation and cleantech projects, as taxpayers continue to foot the fossil fuel industry’s huge bill in the absence of an effective, sufficiently high whole-of-economy carbon price. While the Safeguard Mechanism is working to drive down emissions, as Matt Kean’s Climate Change Authority states, we need to significantly lift our game and go three times faster on emissions reduction to deliver on our new 2035 targets.
On behalf of Climate Energy Finance, could I thank all our readers, partners and colleagues and wish you all a safe and merry Xmas and New Year.
Tim
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TIME’S UP: GOVERNMENT MUST ACT ON GAS CARTEL IN NATIONAL INTEREST
The multinational gas cartel has been gouging households and pushing Australian businesses to the brink for long enough, even as it dodges tax and drives escalating climate change as it privatises profits – the very definition of a rogue industry.
As the Federal government considers an east coast gas reservation policy, we call on it to deliver real, significant and lasting reform to Australia’s gas market that reduces energy bills for families and businesses, helps protect our environment, and stops further handouts to multinational corporations.
We’re calling for the government to take a stand in the national interest and:
Stop approving new gas projects that are destroying our climate and environment. We have plenty of gas and in fact east coast gas production has already trebled in the last decade, even as domestic demand has shrunk by a quarter. Excessive exports are the problem.
Guarantee affordable domestic gas supply to address the high fossil fuel energy costs crippling our downstream industry and inflicting high inflation on all Australians. We can thank the gas cartel for no pre-Xmas RBA rate cut this month!
Use additional revenue from properly taxing gas exports to support households and manufacturers to transition off expensive gas and onto cleaner, cheaper renewable options, prioritising low-income homeowners, renters and First Nations housing.
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CHINA’S $180bn RISING TIDE OF OVERSEAS CLEANTECH INVESTMENT JUST KEEPS BUILDING, BUT AUSTRALIA’S MIA
China’s outbound cleantech investment surged to unprecedented levels over 2024–25, reshaping global industrial geography and accelerating the clean-energy transition.
CEF’s new report, Rising Tide: China’s Outbound Cleantech Capital Surge, tracked more than US$180bn in Chinese cleantech capital investment globally since the start of 2023, up 80% since CEF’s Green Capital Tsunami report a year ago.
Chinese firms are driving the rapid build-out of solar, battery, wind, EV and green-hydrogen manufacturing and deployments in emerging and advanced economies alike. The data shows a decisive shift in global collaboration patterns, with countries from Indonesia and Malaysia to Hungary, Morocco and Brazil positioning themselves as strategic partners to China, attracting the global decarbonisation leader’s green capital, low-cost technology, manufacturing capability and green-industrial jobs.
Our report outlines what this means for Australia at a time when domestic decarbonisation hinges on unprecedented investment, competitive supply chains and fast-scaling clean-energy manufacturing.
For Australia, the findings highlight both urgent risks and transformative opportunities. While much of the world is leveraging Chinese investment to grow domestic industry and lower the cost of the transition, Australia’s inflows from China have fallen to historic lows – just $882m in 2024, plummeting from a peak of $16bn in 2008 and now just 1.5% of total inward foreign direct investment (FDI), despite the scale of capital needed to meet net zero goals.
The report calls for a more strategic approach to collaboration that safeguards national interests while unlocking China’s technology, capital and market access crucial to building domestic solar, battery and critical-minerals value chains.
It recommends Australia:
Establish an Australia–China Green Transition Cooperation Framework modelled on successful international examples, to support knowledge exchange, attract clean energy investment, and deepen R&D partnerships.
Build institutional capacity to attract green investment in the form of Create Invest Australia, an investment promotion agency drawing on global best practice to guide FDI into strategic sectors – renewables, infrastructure, innovation, skills – to support FMIA and Net Zero.
Modernise the foreign investment regime to improve transparency and predictability, with clear criteria for assessing national-interest risks, a “green lane” fast track.
Establish an independent non profit, non partisan Emerging Technology & Security Centre to provide evidence-based assessments of technology risks and opportunities in the net-zero transition to balance innovation with national security considerations.
Create a China in the 21st Century Knowledge Exchange Centre to strengthen understanding of China’s economic, social and geopolitical trends to support more nuanced engagement, draw on expertise of organisations such as the UTS Australia-China Relations Institute.
>>> Read the full report here.
>>> The report has already generated strong traction, with coverage in The Australian, Bloomberg, Reuters, AusBiz, AAP, The Energy, ESG News, FS Sustainability and elsewhere.
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GUANGDONG JOINT MEETING HIGHLIGHTS WARP-SPEED TRANSITION WITH BESS IN SPOTLIGHT
CEF director Tim Buckley participated in the Net Zero Stream of the 30th NSW-Guangdong Joint Economic Meeting (JEM) covering electrification and decarbonisation, with a major focus on the role of battery energy storage systems (BESS) to accelerate both Chinese and Australian energy system transformations.
Technology and innovation are happening at China speed and scale, making massive progress towards net zero, driven by unprecedented deployments of renewable energy.
Guangdong Province has deployed a staggering, world-leading >40GWh of BESS in 1Q-3Q CY2025, the #1 province in China. Also interesting to hear Australia ranked #1 in terms of China's overseas BESS export markets in 2025 to date. During January to October 2025, Chinese energy storage enterprises secured 49.2GWh of new orders/projects in Australia.
Presentations by China Southern Power Grid Company, the National Innovation Centre for New Energy Storage, EVE Energy and a range of world leading integrated battery manufacturers and EPC firms demonstrated how BESS, technology and innovation are being deployed to ensure and enhance grid reliability even as decarbonisation is accelerated.
The Chinese government accords high priority to BESS, and has issued a Special Action Plan for the Large-Scale Construction of New Energy Storage (2025–2027) to drive development. The new energy storage market has experienced a period of explosive expansion. By the end of 2024, global installed capacity stood at 165GW, with China accounting for 78GW, or 47% of the total. China's new energy storage installed capacity has maintained rapid growth. As of the 1HCY2025, this capacity stood at 94GW, and it is anticipated to reach 180GW by the end of 2027.
China dominates the global material manufacturing market for BESS with a more than 80% share for lithium iron phosphate (LFP), anode materials, separators and electrolytes. In 1HCY2025 Chinese enterprises’ energy storage battery global shipments hit 233.6GWh, 90% of global market share.
The delegation met with EVE Energy and toured their new 3GWh pa Chinese battery factory, the firm’s 31st battery factory in China! Ranked the #3 BESS manufacturer in China in 2025 (behind CATL and HiTHIUM Energy Storage), EVE is following the same ‘Going Global’ strategy of leveraging and complementing their Chinese exports with new factories under construction in Hungary (US$1.4bn investment for 28GWh pa capacity), US$1.2bn in Malaysia, and US$2.6bn in the US (in partnership with Cummins and Daimler Truck AG).
EVE Energy and China Southern Power Grid are featured as two Chinese cleantech leaders going global in our Rising Tide report, in which we tracked >US$180bn of Chinese cleantech OFDI since the start of 2023.
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ACCU SCHEME CAN WORK IN CONCERT WITH THE SAFEGUARD MECHANISM TO REPAIR NATURE
This week saw the Climate Change Authority (CCA) complete its consultation round for its 2026 Australian Carbon Credit Unit (ACCU) Scheme review, a critical review of current policy settings as we gear up to the Safeguard Mechanism (SGM) review in 2026. The CCA’s objective is to provide policy recommendations that improve the market dynamics of the ACCU Scheme to incentivise high-quality emissions abatement, and, critically, investment into nature-based solutions.
Australia currently faces a two-fold climate crisis, the collective cost of which to Australians is estimated at A$38bn pa today, forecast to double to A$73bn pa by 2060.
This requires significant government intervention to reform the regulatory landscape of climate, energy and industry policy so as to (i) rapidly accelerate the electrification and decarbonisation of industrial processes through frameworks such as the SGM, and (ii) direct capital at speed and scale into nature repair, maintenance and conservation. With the right settings, the ACCU Scheme will be an essential mechanism to help achieve both of these critical objectives.
The 2024-25 preliminary SGM data published last month showcased positive momentum in industrial decarbonisation, with emissions covered by the scheme dropping 2.4% to 132.7MtCO2-e in 2024-25. While directionally positive, current policies and price signals like the SGM are insufficient to deliver the emissions reductions necessary to meet Australia’s targets.
A rising price on carbon is the single most effective market signal to industry to incentivise high-quality abatement through the deployment of technologies that displace fossil fuel consumption and emissions at their source. To do this, the ACCU Scheme must have a unit price rising at a significantly greater pace than historical growth to drive on-site emissions abatement.
For nature repair too, capital is key. With concerted action, Australia can substantially repair past degradation of its landscapes, but in order to achieve this, Australia must deploy $7.3bn pa in real 2022 terms over 30 years (~0.3% GDP) into nature-based solutions.
We argue that the Clean Energy Regulator must incentivise investment into ACCU methods that entail nature-focussed benefits, ensuring projects generating ACCUs are driving nature repair outcomes beyond carbon sequestration.
Crediting mechanisms and the models that underpin carbon sequestration and nature repair credits are not without their uncertainties in areas including verifiability and additionality. However, the largest risk in nature and carbon markets is delay. Building social licence and confidence in the iterative nature of environmental carbon sequestration markets is critical to deployment capital at speed and scale into nature repair. It is imperative industry, regulators, investors, landholders and the academic community focus on enhancing the standard and effectiveness of this structure, not on abandoning this model.
>>> Read CEF’s full submission to the CCA ACCU Review here.
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RECORD HIGH RENEWABLES CRACK 50% IN NOVEMBER
Australia's National Electricity Market (NEM) reached a record 50.1% share of renewables in November. Contrary to COALition and Murdoch media misinformation, record high clean energy helped deliver record low wholesale power prices, averaging just $67/MWh, a third lower than the FY2025 year average.
Three of the lowest cost contributors to the record low wholesale power prices were
rooftop solar (at just $9/MWh)
utility scale solar ($26/MWh) and
onshore wind power (at $44/MWh).
Unlike fossil fuel generation, renewables are deflationary. Let's deploy wind and solar at speed and scale to permanently drive decarbonisation and lower energy prices for consumers and domestic industry. We need to cover for extra demand from electrification and economic growth, as well as coal power capacity withdrawals.
It is also critical that we avoid the grid transmission and distribution (T&D) side of our retail electricity bills escalating too fast, absorbing the lower wholesale electricity prices. Higher interest rates and dramatically higher construction costs for greenfield T&D are both problematic, which is why Minister Bowen's home battery support program is such a winner. Installing 1,000 new home batteries each and every day enables the existing grid T&D system to accommodate ever more rooftop solar, by far the lowest cost and fastest-to-deploy new energy generation in Australia.
Consumer Energy Resources (CER) are key – solar, but also batteries (domestic and commercial + industrial) and V2G bidirectional charging. The economics are compelling, as is the speed of delivery, and rate of technology improvement.
Australia is more than half way to Energy Minister Chris Bowen's ambitious 82% renewables by 2030 target, and we still have five years to go.
Beyond time to get off the gas!
>>> See the new Getting off Gas report by our partners at the Smart Energy Council.
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AUSTRALIA’S EMISSIONS CUTS ACCELERATING, BUT MUCH MORE IS NEEDED TO MEET TARGETS
The Federal government says it is on track to meet its 2030 climate target after the latest quarterly figures in the National Greenhouse Gas Inventory showed Australia had recorded one of its biggest annual drops in gross carbon emissions since COVID-19.
Australia's national emissions for the year to June 2025 are estimated at 437.5Mt of CO2 equivalent (CO2-e), down 2.2% yoy, led by a 3.3% yoy drop in electricity emissions. DCCEEW's preliminary estimate of national emissions in the year to September 2025 is 436Mt CO2-e, down 2.8% yoy (12.4 Mt CO2-e), an accelerating trend across all key sectors. FY2025 transport emissions increased, up 0.3% yoy; (0.3Mt CO2-e), mainly driven by increases in diesel consumption for road transport and domestic aviation.
It is well past time for Treasurer Jim Chalmers to introduce a road user charge and a $50m pa per firm cap on the multibillion dollar diesel fuel rebate that currently lines the pockets of big miners. This should be turned into a Transition Tax Incentive, so any rebate received about that amount is conditional on it being spent on mining electrification and decarbonisation. This would convert a major headwind slowing decarbonisation and damaging our energy security into a tailwind to speed energy transition in the mining sector, with major emissions reduction payoffs, as CEF’s Matt Pollard argued in his report.
The Australian Academy of Technological Sciences & Engineering estimates imported diesel accounts for 17% of our national emissions. Diesel rebate reform should be a top-tier national priority!
The CCA 2025 Annual Progress Report was released simultaneously with the Green Gas Inventory. It noted that “To stay on track, the rate of reductions must double in the 5 years to 2030 and triple in the decade to 2035.” Energy Minister Chris Bowen has flagged the creation of tough new emissions reduction measures to meet the new 2035 target of a 62-70% reduction, with government forecasts showing Australia would only achieve a 48% cut by that date under existing policies. We say bring it on!
Carbon pricing is the critical driver of emissions cuts – ie, making polluters pay and incentivising investment into clean energy alternatives. CEF advocates for a lowering of the Safeguard Mechanism threshold to capture industrial facilities emitting 25ktpa, down from the current 100ktpa, and a ratcheting up in the price of Australia Carbon Credit Units (ACCUs), currently just a quarter of the EU ETS at €82/t, which BloombergNEF forecasts to rise to €150/t by 2030. Australia should also advocate for a path to a carbon tariff in trade – an Asian Carbon Border Adjustment Mechanism (CBAM) – in alliance with our key Asian trade partners (see our recent CBAM report).
This suite of policy measures, working together, is essential if we are to seriously tackle emissions in line with climate science and drive our national interests.
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AEMO: TRANSMISSION BUILDOUT DOWN, CER UP, FIRMED RENEWABLES STILL CHEAPEST ENERGY
The Australian Energy Market Operator’S (AEMO) new draft Integrated System Plan, out this week, anticipates 40% less new grid transmission build than in the 2024 version. The buildout has seen massive capital cost blowouts of 200-500% and delivery timetable delays, so an economic reality check is entirely overdue, particularly given the cost of distributed and utility scale batteries has halved in the same time. This is absolutely the right decision.
Plummeting costs of batteries and solar panels have also trimmed the amount of wind and methane gas generation required. Some coal power also sticks around longer, thanks largely to the fossil fuel sector-backed coal fanboy LNP Premier of Queensland, David Crisafulli.
But AEMO’s overall conclusion and direction are unchanged: renewable energy connected with transmission and distribution, firmed with storage and demand response and backed up by gas (which plays an important but small and declining role) is the least cost way to supply electricity to homes and businesses through to 2050.
AEMO models that Australian consumers will spend $50 billion on consumer energy resources (CER), e.g. rooftop solar, home batteries and batteries-on-wheels – EVs, which will account for more than a third of NEM capacity by 2050, showing there is huge popular support for embracing energy independence, electrification and decarbonisation. Follow the money! Great to see Australia installing 1,000 batteries a day thanks to Climate and Energy Minister Chris Bowen's hugely impactful home battery scheme.
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DISTRIBUTION NETWORK PLAN KEY TO ENERGY TRANSITION
The new Distribution System Plan (DSP) Opportunities Report is an Australia-first roadmap outlining a $2-4.3bn value enhancement to NSW distribution networks to support energy transition, unlocking opportunities across the networks served by Ausgrid, Endeavour Energy and Essential Energy.
It’s a strong plan to accelerate electrification and decarbonisation, leveraging existing grid distribution infrastructure plus consumers’ rapid uptake of rooftop solar, batteries and emerging vehicle-to-grid (V2G) charging. The growth of consumer energy resources (CER) provides opportunities to lower system costs for all customers. This builds on Federal Energy Minister Chris Bowen’s $3.5bn battery support program, which is seeing 1,000 batteries installed daily.
Distribution-connected wind and solar can significantly manage NSW’s load growth while cutting emissions by over 30 MtCO₂-e across the NEM. This value comes from unlocking solar generation + BESS close to load centres (Sydney, Newcastle, Wollongong, etc) and providing additional wind capacity across NSW. By 2050, this reduces the need for gas-powered generation by over 50TWh and displaces over 500 PJ of methane consumption.
Leveraging existing distribution hosting capacity plus $3.2bn in targeted anticipatory investments enables 14.7GW of solar and 5.8GW of wind by 2050.
Santos’ Narrabri methane bomb should be left stranded. Premier Chris Minns needs to push electrification and decarbonisation at speed and scale and leave the gas cartel to face the consequences of a decade of gouging. Meanwhile, this plan should be accelerated, and some NSW REZ developments delayed a decade until greenfield transmission costs subside.
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WHITEHAVEN COAL’S BLACKWATER WITHDRAWAL
Last edition, we noted that Whitehaven has quietly withdrawn their EPBC application for their Blackwater North coal mine extension, which would have seen an additional 220 million tonnes of coal produced through to 2085. Whitehaven’s pause is a rare opportunity for policymakers to ensure approval decisions align with climate reality.
>>> See the op ed on this topic by Chris Wright and CEF’s Matt Pollard in Renew Economy.
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OUR MEDIA |
See all of our media here.
OUR WORK |
See more of our latest work, including presentations on global decarbonisation and capital shifts.
PREVIOUS NEWS UPDATES |
Our previous newsletters covering major energy news can be accessed here.
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AJ for Tim, Matt, Caroline and Fatima
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