From Watts Up With That?

Essay by Eric Worrall

But at what cost?

Australia records biggest annual drop in emissions outside pandemic

By Mike Foley and Nick Toscano
November 26, 2025 — 10.00pm

The biggest annual drop in Australia’s greenhouse gas emissions outside the COVID-19 pandemic has been driven by record output from renewable energy that is squeezing more coal and gas out of the power grid.

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Bowen said the biggest drivers of emission cuts came from growing supplies of renewables, coupled with limits on big polluting factories and mines under the government’s safeguard mechanism policy.

“We are on track to bring down energy bills and meet our climate targets if we stay the course and continue to lift our efforts,” Bowen said.

…Read more: https://www.smh.com.au/politics/federal/australia-records-biggest-annual-drop-in-emissions-outside-pandemic-20251126-p5niok.html

The government might be boasting about coming electricity price cuts, but the chairman of the federal climate change authority is not so sure of when the promised price cuts will occur.

Climate Change Authority chair Matt Kean unable to say when power prices will stop rising in tense grilling

Climate Change Authority chair Matt Kean has been unable to provide a firm deadline on when power prices will stop rising for Australians after being grilled on energy costs.

Matt Hampson Digital Reporter
November 25, 2025 – 7:30PM

Climate Change Authority chair Matt Kean has claimed power prices will stop rising when Labor’s renewable energy plan is rolled out, but could not say when that would be.

Power prices have continued to surge for Australians as the government pushes its agenda on renewables, which Prime Minister Anthony Albanese has claimed is the cheapest form of energy.

Meanwhile, a recent Australian Energy Council (AEC) report that surveyed energy CEOs under anonymity included one retailer saying they felt power prices would increase for at least the next 10 years “given the scale of capital being deployed in the industry”.

…Read more: https://www.skynews.com.au/business/energy/climate-change-authority-chair-matt-kean-unable-to-say-when-power-prices-will-stop-rising-in-tense-grilling/news-story/6b6c17155f8667e63861ee49bdaedfdb

The sector which is bearing the brunt of these energy price games is Australian Manufacturing, or what is left of it;

Research Note: Hard times in Australian manufacturing

The last twelve months have been a very difficult time to be in Australian manufacturing. After two years of healthy growth following the pandemic, business conditions took a sudden turn for the worse. The industry entered recession around the middle of 2024, and contracted 2.6% over the last year. While weak economic conditions in Australia have proven difficult for most industries, manufacturing has declined faster and further than any of its peers.

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Manufacturing falls into recession after a post-pandemic boom

Australian manufacturing has experienced very volatile conditions in the past five years. Like many industrial sectors, it was badly impacted by the public health restrictions of the COVID period. But following the pandemic, a strong rebound in Australia’s economy coupled with supply chain disruptions greatly increased the demand for manufactured goods. Manufacturing output surged by around 10% in 2022 to meet this demand, while employment expanded by 7% – its first proper workforce growth in over twenty years.

However, in 2024 conditions in manufacturing rapidly deteriorated. The sluggish Australian economy weighed heavily on local demand, while the restoration of global supply chains saw imports return and put downward pressure on prices. The industry fell into recession during the middle of 2024, and has contracted by 2.6% over the last year. Most branches of manufacturing have been affected, with only the food and beverage subindustry managing to eke out a weak 1.0% growth rate.

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Industrial inflation – particularly gas prices – weigh heavily on balance sheets

One of the major pressures has been industrial inflation, with manufacturing experiencing some of the highest impacts of any industry in Australia.

In the five years since the pandemic, manufacturer input prices have risen by an astonishing 37.5%. This outpaced both the growth in Australian industrial prices (20.0%) and consumer prices (22.2%) across the same time.

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These problems are particularly acute in the ‘heavy’ branches of manufacturing – particularly metals and petrochemicals – which rely on gas. These manufacturers consume around half of Australia’s domestic gas supply, and their need for heat and chemical feedstocks cannot be substituted for lower cost electricity supply. Surging energy costs must often be borne on the balance sheet, greatly reducing the profitability of energy-intensive branches of manufacturing.

…Read more: https://www.australianindustrygroup.com.au/resourcecentre/research-economics/economics-intelligence/2025/hard-times-in-australian-manufacturing/

The manufacturing research document notes a buoyant gas export market is putting pressure on domestic supplies, but why aren’t domestic supplies responding to upward price pressure?

Part of the reason is political green extremism. For example, the State of Victoria, home substantial unconventional gas reserves, enshrined a ban on fracking in their State Constitution in 2021. NSW banned offshore oil and gas exploration in 2024. On the East Coast of Australia, which holds the bulk of Australia’s manufacturing sector, Queensland appears to be the only state which is offering any level of reassurance to manufacturers, though even Queensland regularly gets caught up in the energy price chaos of the green obsessed southern states.

Aussie Green Wall Cracks: Queensland Commits to Reliable Coal until 2046

Ideologically driven closure of coal plants is also putting pressure on domestic gas supplies. Despite green outrage, gas is perceived as the least evil fossil fuel by politicians who know they get the blame if the power grid fails, gas is a “transition fuel”.

While it would be wrong to blame everything on Net Zero policies – the mining industry research note quoted above lists other significant issues such as skills shortages – it seems likely that the emissions cuts Australia’s Net Zero obsessed leaders are celebrating are largely being achieved by burning down what is left of Australia’s manufacturing industry.

Not that anyone in Australia notices, other than people directly affected by the manufacturing cutbacks. All this pain achieves exactly nothing. Whatever manufacturing capacity we lose is rapidly replaced by overseas factories powered in many cases by Aussie coal.