17 FEBRUARY 2026

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

–––––

The Coalition ship of fools has careened back into town, this time with Angus Taylor, former Energy and Emissions Reduction Minister under PM Scott “I don’t hold a hose, mate” Morrison at the helm, after the ousting of Liberal leader Sussan Ley. Malcolm Turnbull, reflecting on Taylor’s ascension, aptly described him as the “best qualified idiot”. We take issue with “best” anything.

To follow the shenanigans of the hard right climate luddites is a waste of time and energy, except to say expect more of the same…more of the same regressive pro-fossil fuel vested interest peddling, anti-investment, anti-science, anti-renewables climate and energy policy failures and a possible renewal of the nuclear scam. Fortunately, this rabble is at present a sideshow, far more interested in in-fighting than holding the Albanese government to account. More concerning is the rise of One Nation – now bizarrely polling well over 20% – and what this means for Australian politics. Time will tell if this shift in the political landscape holds. 

Meanwhile in the US, we saw Trump wield one of his biggest wrecking balls yet through action on climate with the repeal of the science-based 2009 EPA finding that greenhouse gas emissions endanger human health, a key basis of a suite of emissions reduction regulations there. This speaks again to the dereliction of the leadership of the world’s biggest economy in tackling our collective existential crisis. 

CEF continues to focus on the outstanding progress being made by the world’s overwhelming decarbonisation leader, China, where, as our colleague Lauri Myllyvirta reports in Carbon Brief, emissions have now been flat or falling for 21 months. China now dominates energy-hungry aluminium smelting despite having almost no bauxite, with a 60% global market share, and is rapidly greening processing, hugely significant for industrial decarbonisation (although China is also funding major new coal-powered aluminium smelting in Indonesia - offshoring some of their carbon pollution). We note the recent Hamburg Declaration, which saw Belgium, Denmark, France, Germany, Iceland, Ireland, Luxembourg, the UK, the Netherlands, and Norway pledge to enhance energy independence by building another 100GW of joint offshore wind projects, approximately equal to the current total electricity generation capacity of the UK. 

And below, we cover some good news domestically, with Australian renewables surging to a record >50% of electricity supply in the final three months of 2025, driving materially lower wholesale electricity prices. We’ll say it again, firmed renewables are the cheapest form of power. Now we just need to step on the accelerator because growing net new supply faster than demand will permanently lower energy prices. 

We note that some parts of the mining sector are embracing renewables at scale. Zenith Energy’s 25-year PPA with Northern Star Resources will deliver one of Australia’s largest renewable energy projects for mining (see our write up here). And Octopus Australia’s commitment of $20bn over the next five years into Australian renewables shows that our clean energy is investable, and represents the scale and speed of transition required Australia to realise its potential as a zero-emissions energy, trade and investment powerhouse (write up here).

Stop press: Out this morning, the Clean Energy Council’s Q4 2025 Renewables investment report tracked 2.1GW of newly commissioned renewables in the quarter, equivalent to powering greater Brisbane 1.5 times, breaking the previous record of 1.3GW in Q3 2021. 

–––––

TURNING POINT: RENEWABLES SURPASS 50% IN Q4 2025 AS ELECTRICITY WHOLESALE PRICES PLUNGE

There was a watershed moment for Australian energy transition at the end of January as the Australian Energy Market Operator (AEMO) released its energy dynamics report for the December quarter of 2025: Renewables comprised more than half of energy supply in the quarter, driving down wholesale electricity prices by nearly half. Coal-fired generation was down 4.6% year on year, falling to an all-time quarterly low. Gas-fired generation plunged 27% to its lowest level for 25 years.

The last few weeks have been an object lesson in the benefits of the transformation of our energy market, dispelling the myths promulgated by fossil fuel vested interests that increased renewable energy means more expensive power and reduced grid reliability. 

We have seen exactly the opposite of that: with increased extreme weather events including unprecedented heatwaves and devastating fires in southeast Australia, the grid has proven resilient under surging demand and stress, and now AEMO confirms that increasing supply i.e. renewables and BESS firming, correlates with a significant decline in wholesale prices. 

>>> Read our full op ed in PV magazine.

–––––

IEA’S ‘AGE OF ELECTRICITY’ OUR OPPORTUNITY IF WE EMULATE CHINA

The International Energy Agency (IEA) has announced “the Age of Electricity” in its latest report – Electricity 2026 – which highlights the rapid growth of global electrification over 2020-2025, now forecast to accelerate to 3.6% per year growth to 2030.

With electrification comes both energy independence and decarbonisation, as regions and countries the world over speed their transitions to meet economic, climate and energy security goals in an increasingly fraught geopolitical landscape.

China is central to this story. In 2025 alone, China installed a world record 446GW of new renewable energy, 20% more than in 2024. An overwhelming 82% of all net new capacity additions were renewables, as per our CEF China Energy Update.

We note a key takeout of this IEA report in the graph below. Global coal generation for electricity peaked back in 2024 and is expected to enter a very gradual decline in absolute terms through to 2030, driven by the massive expansion of renewable energy, even as electricity demand rises (electrification of industry, heating and cooling, adoption of EVs, and more AI data-centres).

As for China, it reached peak coal use in electricity in 2024 and hence peaked national emissions (supported by China’s steel demand peaking back in 2020, and cement demand also having peaked), and CEF expects emissions to plateau in the coming few years, and then progressively decline.

Time to supercharge Australian zero-emissions energy powered Future Made in Australia, Industry Minister Tim Ayres. Time for Australia to double down and go faster, PM Albanese. Treasurer Chalmers, time to incentivise policy alignment with climate and decarbonisation ambition, not keep enabling our imported fossil fuel addiction by gouging the Federal Budget to subsidise huge miners guzzling billions of litres of imported diesel on the taxpayers’ dime.

The age of electricity is Australia’s opportunity to remake itself as renewables powered manufacturing leader – if we act now.

>>> Read our full op ed in Renew Economy here.

–––––

GOVERNMENT SUPPORT FOR EXPANDING SA MAGNETITE MINING A POSITIVE STEP, BUT GAS LOCK-IN RISK REMAINS

In November 2025, economist and climate policy expert Rod Sims said that Whyalla provides the litmus test for the commonwealth and South Australian governments’ commitment to green iron – Australia’s #1 new economy export opportunity. They were faced with a decision between underwriting and subsidising a methane gas pathway, which will never be competitive in Australia or in global markets, and supporting a green hydrogen pathway that has the potential to be competitive. 

Yesterday's announcement of a $20m joint loan facility by the Albanese and Malinauskas Governments to support the Magnetite Expansion Project (MEP1) in the Middlebank Ranges – which will facilitate the production of up to 2.5Mtpa of high-grade magnetite, a critical feedstock for lower-emissions iron and steelmaking – is a welcomed step in the right direction. The loan facility comes the same day as SA’s Razorback magnetite mine proposal has been elevated to Major Project Status by the Federal Government, the only iron ore project in Australia to achieve such status.

In CEF’s November 2025 report on the transformation and decarbonisation of the Whyalla Steelworks, we outlined a pathway for the SA Government to focus on enabling and facilitating the state’s magnetite industry as a precursor to a broader green iron industry, and transforming the Whyalla Steelworks in a phased approach: prioritising the construction of a new electric arc furnace (EAF) to replace steelmaking capacity, followed by a new green iron facility as green hydrogen economics continue to improve. 

It is also positive to see the administration process for Whyalla Steelworks has attracted interest from more than 70 parties worldwide, with five domestic and international groups now shortlisted and undertaking detailed technical, financial and operational due diligence over the coming months. 

CEF again urges the SA Government to reevaluate the cost and risk of locking-in a fossil gas ‘transition’ of Whyalla. In an interview with SA’s InDaily on Monday, SA Treasurer and Minister for Energy and Mining Tom Koutsantonis said that methane gas will be ‘king’ for the future of the Whyalla Steelworks, with no plans from SA Labour to revive its flagship green hydrogen strategy following the upcoming state election. “There’s lots of work that we’re doing behind the scenes, making sure there’s availability of gas, and of course pipelines are key. We want every buyer to know that if they move towards direct iron reduction (DRI), they’re going to need gas.”

In CEF’s November report, we highlighted that Whyalla then stood at a crossroads. The forced administration of the Steelworks in February 2025 was a critical nation-building opportunity to pivot from fossil fuel-based steel to a model in which SA’s abundant, world-leading renewables and magnetite resources are deployed to produce green iron and steel in a global marketplace undergoing a nascent but momentous shift to a future of zero-emissions iron and steelmaking. This requires a renewables – not gas – powered EAF to produce green steel.

Expensive gas is not a viable solution for Whyalla, in the interim nor in the long-term. Leaving aside the flawed assumption that gas is key to aphasing in decarbonisation, it is economically unviable. SA has some of the highest-cost domestic methane gas in the gas producing-world at an average of A$13/GJ in FY25. 

CEF analysis shows that to just halve the commercial gap in methane gas prices here compared to other DRI producing nations in the US and Middle East, taxpayers could be on the hook for up to $2bn over the coming decade. 

This puts 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.

Absent an international price on carbon, a renewables-led green transformation of the Whyalla Steelworks will require significant government support, but SA’s comparative advantage is in its abundance of renewable energy resources to power an EAF, not to prolong an already beyond end-of-life blast furnace. A ‘no-regrets’ green pathway would be the lowest-cost pathway in the long-term, even as that means a phased approach of a scrap-based EAF and scaling magnetite mining first, and green hydrogen powered green iron in a second phase. 

Minister Koutsantonis stated the focus of the SA Government is on safeguarding the jobs at the Steelworks. The gas detour is a dead end. A renewables-based decarbonisation of the Steelworks ensures that high-quality, future-proof jobs are aligned with global decarbonisation trends rather than vulnerable to them. 

If we’re going to do massive subsidies, let’s at least back the best solution for a decarbonising world via a phased approach. Today’s announcement of support for the expansion of the Middlebank Range is an important step in the right direction. Now let’s build in decarbonisation of processing from the get go.

>>> See Tim on ABC TV SA 7pm News, story at 10.42

–––––

SUPERPOWER INSTITUTE’S NEW ‘POLLUTER PAYS’ ROADMAP A WINNER

A new report from our partners at The Superpower Institute, The Case for a Price on Pollution, sets out two key policies to deliver emissions reduction and economic renewal in a fair, efficient and politically durable way:

1. A Polluter Pays Levy (PPL) that charges companies for the carbon pollution associated with fossil fuels extracted or imported for use in Australia, with revenue returned to households to help ease cost-of-living pressures; and 

2. A Norway style Fair Share Levy (FSL) on the very large profits earned from Australia’s publicly owned gas resources, ensuring Australians receive a fair return – without affecting future investment, jobs, or gas prices.

TSI calculates that the PPL and FSL would collect average revenue of $35.6bn each year between 2026 and 2050, producing a huge boost to the budget bottom line and a highly consequential social dividend to Australians, as it helps achieve our emissions reduction goals.

CEF endorses this important policy intervention. It is spot on. A price on emissions is the most economically rational least cost path to solving for the climate science. Added to this, pricing carbon emissions at the source is the simplest and most effective domestic tax reform available to the Treasurer and Finance Minister, dramatically improving the budget as it addresses the cost of living crisis, enabling households most affected temporarily by higher transition costs to be compensated. A win-win-win.

Now we just need to see some political courage in the interests of all Australians.

>>> See our post and fuller discussion by stakeholders here.

–––––

CBAM KEY TO GREEN COMMODITY OPPORTUNITY: JOTZO REVIEW

Professor Frank Jotzo's Carbon Leakage Review Report to Climate and Energy Minister Chris Bowen is finally public.

We agree with the review’s finding that measures additional to the Safeguard Mechanism “may be required and desirable over time, for specific commodities at high exposure to carbon leakage risk in domestic markets…. A border carbon adjustment would be the most suitable option in these cases… [to] support the emergence of green commodity production in Australia, harnessing this country’s opportunities to be a major contributor to global industrial decarbonisation through exports."

It is clear that we need a price signal to drive decarbonisation of trade-exposed Australian industries through the extensive buildout of renewables infrastructure at speed and scale. 

Critical to all of the above is a price on carbon, leveraging and enhancing our domestic actions so as to provide a stronger signal for development of carbon pricing in international trade, and building on the price signal of the EU CBAM with an Asian CBAM, as we argued in our 2025 report. This would help catalyse investment into industrial decarbonisation at a speed and scale commensurate with the climate emergency and the green economy opportunity.

We also need to step up the Australian Renewable Energy Agency (ARENA)'s scope to provide extensive capital assistance via policy measures like the $1.9bn Powering the Regions Fund. As the review notes, “a border carbon adjustment would result in revenue collected by government” – an important point, as revenue generated will help fund the cost of government policy support, as it is already doing in Europe.

>>> See our full write up here and Frank Jotzo’s op ed in the AFR.

–––––

FOSSIL INTERESTS SPEW DISINFO ON FUEL TAX CREDIT SCAM AS GOV’T DRAGS HEELS

As key voices including the Labor Environment Action Network and the chair of the CCA point out the “insanity” of the federal Fuel Tax Credit Scheme, the Minerals Council of Australia (MCA) has continued to spew its mis- and disinformation – that a policy enhancement to start to cap and transform this $11bn annual impost on taxpayers would adversely affect "the mining, agricultural and tourism sectors".

CEF has argued for a $50m per annum per company cap on big miners’ tax refunds for high-emission imported diesel fuel. We propose that any refund above that amount be directed into decarbonisation of mining operations (e.g. electrified haulage) or foregone. See Matt Pollard’s report on this. Fortescue supports this proposal and is putting its money where its mouth is, with the recent milestone introduction of battery-electric locomotives to service its mining operations in the Pilbara (see our write up here).

The facts are this: Not one farmer would be affected. Not one tourist operator would be affected. Not one trucking operation. Only the 15 largest mining sector claimants would be impacted by a $50m cap, some of whom claim hundreds of millions in refunds a year. In 2023-24, BHP was refunded $627m, Rio $416m – that’s a billion dollars ripped out of hospitals, aged care, childcare etc.

Chief imported fossil fuel lobbyist, the MCA’s Tania Constable, knows it. And so do major beneficiaries BHP and Rio Tinto, who  refuse to buy-in to this reform, despite the fact it aligns with their stated decarbonisation objectives. And at a time mine EV technologies are changing profoundly – right now. It’s pathetic.

>>> Read our full write up here.

–––––

RED ALERT FOR POLITICAL DONATIONS DISCLOSURE

On a related note pertaining to vested interests working to shape energy policy, we note an AFR report that every donation of the $2.7m in pre-2025 federal election donations tipped into the astroturfed Australians for Prosperity – an anti-Teal campaign – was from Coal Australia. It is beyond time for real-time donations disclosure in Australia. 

>>> Read our full write up here.

–––––

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. 

–––––

AJ for Tim, Matt and Fatima

If you wish to be removed from this email list, please just let Annemarie know any time or unsubscribe at the link below. 

This newsletter is not intended to provide, and should not be relied on for, tax, legal, investment or accounting advice, nor is it an offer or solicitation of an offer to buy or sell, a recommendation, endorsement, or sponsorship of any security, company, or fund. CEF is not responsible for any investment decision made by you. Unless attributed to others, any opinions expressed are our current opinions only. Certain information presented may have been provided by third parties. CEF believes that such third- party information is reliable, and has checked public records to verify it wherever possible, but does not guarantee its accuracy, timeliness or completeness; and it is subject to change without notice.