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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 Australian government is set to implement a bold initiative requiring gas exporters to allocate 20% of their product for domestic use. This strategic move, touted as a significant transformation in the country’s gas market, aims to alleviate electricity costs and ensure a stable energy supply for the future, according to Energy Minister Chris Bowen.
This new policy mirrors the successful gas reservation framework employed by Western Australia for over a decade. Slated to take effect in July 2027, the plan mandates that gas producers prioritize Australian consumers before engaging in the often lucrative international spot market. Companies must demonstrate compliance by adequately supplying the local market to gain governmental approval for international sales.
Despite its ambitious goals, the initiative is expected to stir debate within the industry. Minister Bowen has openly recognized the potential for contention but emphasized the policy’s necessity in addressing projected long-term energy shortages.
“This policy is not designed to satisfy everyone,” Bowen remarked to reporters in Sydney. Nonetheless, he stressed that the proposal has been meticulously crafted to balance industry interests with the pressing need for energy security and affordability for Australian households and businesses.
“This is a policy which will obviously not please everyone,” he told reporters in Sydney.
“Often good policy doesn’t, but it’s good policy which puts Australia’s national best interest first.
“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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