Business Environment Profiles - Australia
Published: 28 May 2025
Greenhouse gas emissions
493 Million metric tonnes
-1.6 %
This report analyses the amount of greenhouse gases that are emitted in Australia. This includes emissions from electricity generation, direct combustion, transport, fugitive gases and vapours, industrial processes, agricultural activities, and any waste products. Emissions that result from direct human-induced land use, land-use change and forestry activities (LULUCF) are excluded. The data for this report is sourced from the Department of Climate Change, Energy, the Environment and Water and is measured in megatonnes of carbon dioxide equivalent (Mt CO2-e) per financial year.
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IBISWorld forecasts greenhouse gas (GHG) emissions to increase by 0.3% in 2024-25, to 493.4 Mt CO2-e. While work continues to be done on attacking Australia's GHG emissions, initial data from the first half of 2024-25 indicates that GHG emissions are on track to climb. Preliminary estimates from the Department of Climate Change, Energy, the Environment and Water (DCCEEW) show that compared to the first half of 2023-24, GHG emissions are up 0.7% in 2024-25. This trend has been driven by increased emissions in the electricity sector, due to a combination of weather and demand dynamics resulting in higher-than-usual electricity usage. Unfavourable weather conditions also led to lower hydro and wind generation, further driving up GHG emissions from non-renewable electricity generation. Increases in the GHG emissions from the transport and fugitive emissions sectors have also offset strong declines in the industrial processes and agriculture sectors in the first half of 2024-25. Throughout the second half of the year, GHG emissions are set to decline, returning to trends witnessed over the past five years, as weather and demand trends become more predictable. However, this decline is unlikely to completely offset growth over the first six months of 2024-25, driving up estimated total GHG emissions throughout the year.
Electricity emissions, despite their challenges in 2024-25, declined the most out of all sectors between 2019-20 and 2023-24, falling by 11.3% over the period. A large contribution to this trend has been the expansion in solar generation capacity, both via household-level rooftop installations and large-scale commercial solar farms. Fugitive emissions, which are emissions of gas or vapours during the extraction and refining of fossil fuels, have also declined by 15.4% over the same period, a trend that has largely been a by-product of the reduced reliance on fossil fuels for electricity generation. Conversely, emissions from transport and agriculture have all climbed significantly between 2019-20 and 2023-24, partially offsetting declines in GHG emissions from electricity generation. Transport emissions have been pushed up by growth in demand from the aviation sector post-pandemic and increased demand for diesel for motor vehicle transport, while agriculture emissions, which primarily come from raising livestock, have expanded despite being down on all-time record levels witnessed in 2016-17.
Australia's GHG emissions peaked in 2017-18, following the Abbott Government's repeal of the carbon pricing scheme in July 2014. This scheme, known as the carbon tax, contributed to significant declines in emissions in both 2012-13 and 2013-14, particularly from electricity generation. However, the removal of the scheme resulted in an overall increase in GHG emissions, reaching a record high in 2017-18. Since then, emissions have declined over the long run as a result of improving societal attitudes towards environmental awareness leading to rising pressure on the Federal Government to implement emission reduction policies. A collapse in economic activity during the pandemic accelerated this trend in 2019-20 and 2020-21. As pandemic restrictions eased, this trend reversed, resulting in a marginal uptick in overall emissions in 2022-23. In 2023-24, the long-run GHG emissions decline trend returned, as all sectors, excluding the transport industry, saw emissions fall over the course of the year. While the 2023-24 decline is set to be partially offset by a slight increase in GHG emissions in 2024-25, IBISWorld forecasts GHG emissions to decline at a compound annual rate of 1.6% over the five years through 2024-25.
IBISWorld forecasts GHG emissions to fall to 491.2 Mt CO2-e in 2025-26, representing a 0.4% decli...
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