Natural gas essential to the energy transition says Australian PM

New gas projects will play a role in the energy transition, Australian Prime Minister Anthony Albanese said on Tuesday, as his administration seeks to pass a reform to an emissions reduction bill amid growing pressure to ban new fossil fuel projects.

The safeguard mechanism, in place since 2016, seeks to limit emissions from Australia's biggest polluters - 215 oil, gas, mining and manufacturing facilities.

Reform to the mechanism, which the government plans to finalize in April to take effect on July 1, will strengthen emissions cuts with some leeway for trade-exposed industries, such as liquefied natural gas (LNG). It is key to achieving Australia's target to cut carbon emissions by 43% from 2005 levels by 2030 and achieve net zero emissions by 2050.

"We are determined to legislate our safeguard mechanism to provide business and industry a clear, stable and long-term framework for reducing emissions," Albanese said in a speech at the AFR Business Summit in Sydney.

"Gas in particular has a key role to play as a flexible source of energy, providing peaking power today and continuing to provide firming power, helping to smooth the transition to renewables while guaranteeing energy security both for Australia and for our partners in the region."

The Albanese Labor government requires support from a combination of the Greens and some independents to pass the legislation. They want a ban on new fossil fuel projects in exchange.

"A message to the Greens and others that for all of the rhetoric, it doesn't stack up if it has a negative impact and you're not actually helping the transition," Albanese said.

Companies covered by the mechanism account for 28% of Australia's carbon emissions. They are forecast to emit 143 MMt of carbon dioxide equivalent (CO2-e) in the year to June 2023, and the government wants them to cut that to no more than 100 MMt of CO2-e by 2030.

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