Disparity puts Australia’s exports and economic future at risk
Australia’s bid to be both a renewable energy superpower and a major fossil fuel exporter is putting its economic future at risk, according to a new WWF-Australia report.
The report warns Australia’s dual energy exports strategy is sending mixed signals to investors and trading partners, just as countries across the Indo-Pacific accelerate investment in clean energy systems to reduce their reliance on imported fossil fuels.
Analysis prepared by Cyan Ventures estimates Australia could lose up to $70 billion in fossil fuel export value by 2035 as demand shifts towards renewable energy.
Yet the report finds Australian governments continue to provide an estimated $20.1 billion a year in support to fossil fuels, compared with $4.6 billion for renewable energy.
“Australia is pulling in two directions at once,” said Rob Law, WWF-Australia’s Senior Manager, Energy Transition.
“We can no longer afford to position ourselves as a renewable energy partner while simultaneously propping up and expanding fossil fuel production.
“This sends mixed signals to investors, undermines Australia’s credibility as a trade partner and creates space for others to lead.”
Australia’s major trading partners, such as China and Korea, are rapidly investing in clean energy to reduce their exposure to fuel price shocks.
Investment in clean energy across the Indo-Pacific is roughly double that of fossil fuels.
Meanwhile, the report warns Australia’s continued support for fossil fuels is undermining investment in future industries like green iron.
“Green and fossil industries compete for the same capital, policy attention and infrastructure,” said Mr Law.
“On top of that, green industries rely on low-cost renewable electricity and credible carbon signals, which are both weakened when fossil fuel expansion remains a priority.”
The report finds demand for Australia’s fossil fuel exports is increasingly uncertain and could fade faster than expected.
Australia’s LNG exports and Asia’s LNG imports both fell in 2025. Metallurgical and thermal coal demand in China, Japan and India could also begin declining within the next five years and fall by up to 69% by 2050.
WWF-Australia’s Renewable Exports Manager, Camille Malbrain said Australia risked being left behind if it continued to favour fossil fuels over renewables.
“This is a lose-lose strategy. Australia will be outpaced and less competitive in emerging green industries and tied to increasingly uncertain fossil fuel markets,” she said.
“Demand for fossil fuel exports is already weakening. We need to get serious about what comes next.”
The report calls for Australia to adopt a renewable energy security strategy that:
- Plans for the inevitable decline of fossil fuels.
- Builds and accelerates the renewable and electrified energy systems needed to replace them.
- Redirects policy and investment towards a managed, economically beneficial transition.
“Australia’s prosperity depends on embracing the energy industries of the future, not doubling down on those of the past,” said Ms Malbrain.
