18 September 2025

Energy efficiency and electrification could deliver around 20% of the emissions reductions Australia needs to achieve a 75% cut by 2035, according to new analysis released today by the Energy Efficiency Council (EEC).

Drawing on scenario modelling by Climateworks Centre, the research highlights the significant opportunity of efficiency and electrification across homes, commercial buildings, agriculture, industry and the resources sectors. Together, these measures could reduce emissions by an average of 44 MtCO₂-e each year between 2026 and 2035 – more than any other demand-side option.

Luke Menzel, CEO of Energy Efficiency Council said, “Electrification and energy efficiency are shovel-ready solutions for climate action. They’re some of the most cost-effective and fastest actions we can take to cut emissions and reduce the impact of climate change. No matter what number the Government picks for our 2035 target, if Australia is serious about reaching net zero by 2050, we must up the pace of appliance upgrades, building retrofits and industrial electrification now and not wait until the 2040s.”

Highlights from the analysis show:

• Efficiency and electrification in the resources sector presents the largest abatement opportunity across the economy, with average yearly savings of 19.7MtCO2-e between 2025 and 2035. This is bigger than the impact of shutting down Loy Yang A power station, the largest point source of emissions in the electricity sector.
• Residential buildings present the largest abatement opportunity within the built environment, with average yearly savings of 6.5 MtCO2-e between 2025 and 2035 and increasing further out to 2050. This is the equivalent to powering around one million Australian homes with zero-emission electricity for a year.
• The industry and waste sector can deliver total emissions savings of 3.1 MtCO2-e per year on average between 2025 and 2035, reaching 8.7 MtCO2-e per year on average between 2046 and 2050. Between 2046 and 2050, this is equivalent to taking about 3.5 million cars off the road each year.

Based on evidence from the modelling, the EEC is urging the Federal Government to:

• Centre efficiency and electrification within each of its six sector emissions reduction plans.
• Strengthen policies and regulations to accelerate the deployment of efficient electric technologies such as electric heat pumps and efficient motors.
• Establish a clear policy position on prioritising electricity as the primary replacement fuel for gas use.

To read the full policy brief and access the data, click here