In Brief
- The policy will begin in July 2027 and bar gas companies from the global spot market until Australians are supplied.
- Energy Minister Chris Bowen has acknowledged the policy, which will need legislative approval, would be divisive.
The government’s initiative to mandate that gas exporters reserve 20% of their output for domestic consumption aims to reduce electricity costs while ensuring a steady supply in the long run, according to the energy minister.
This move, described as a fundamental change in the country’s gas sector, mirrors Western Australia’s gas reservation policy, which has been in place for over ten years.
Set to be implemented in July 2027, the policy will prevent gas companies from accessing the often-profitable international spot market until they can demonstrate to the government that they have met domestic supply commitments.
Energy Minister Chris Bowen has admitted that while this policy may face opposition from industry leaders, it has been meticulously designed to address anticipated long-term supply shortages.
“This policy is not going to satisfy everyone,” he stated during a press briefing in Sydney.
“However, the best policies often don’t, as they prioritize the nation’s broader interests.”
“It’s going to put downward pressure on prices and what it will also do is, to a certain degree, disconnect Australian gas from spikes in international prices.”
Export contracts signed before the government’s initial announcement of a gas reservation scheme in December 2025 will not be covered under the changes.
Manufacturing Australia, which represents a handful of big companies including BlueScope, Dulux, Cement Australia and Tomago Aluminium, has welcomed the change, describing it as the most significant reform to the nation’s gas market in a generation.
“The federal government is backing a winner here,” chief executive Ben Eade said in a statement.
But the Greens and other advocates who’d been pushing for a 25 per cent tax on gas exports are furious, criticising the government’s decision because it fails to raise any extra revenue.
“They are saying to people, look over here. Don’t look at us, don’t ask us for what you deserve,” Greens senator Steph Hodgkins-May told reporters in Melbourne.
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