Australian state bans gas to new homes from 2024 in push to cut emissions

(Reuters) - The Australian state of Victoria will ban natural gas connections to new homes from next year as part of a plan to cut emissions and lower energy bills, the state climate action minister said on Friday.

Australia's second-most populous state is the country's largest consumer of natural gas with around 80% of homes connected but also has ambitious plans to reach net zero emissions by 2045, five years ahead of the federal government.

Minister for Climate Action Lily D'Ambrosio said on Friday that new homes requiring planning permits must connect to all-electric networks from January 2024.

The gas sector contributes 17% of the state's emissions.

"Reducing our reliance on gas is critical to meeting our ambitious emission reduction target of net zero by 2045 and getting more Victorians on more efficient electric appliances which will save them money on their bills," D'Ambrosio said in a statement.

The changes will apply to all new public buildings yet to reach the design stage, including housing, schools, and hospitals.

The plan comes as southeastern Australia faces potential gas shortages from mid-decade as output falls from the offshore fields, operated by Exxon Mobil Corp, that have long supplied the region.

The ban will do little to help the climate because it will push households onto the coal-based electricity grid, according to a statement from the Australian Petroleum Production and Exploration Association.

Power generation in Victoria, heavily dependent on coal, accounts for about half of the state's carbon emissions.

"The Victorian Government is taking choice away from consumers for limited climate benefit while ignoring the fact that the best way to bring gas prices down is to invest in more gas supply," said Chief Executive Samantha McCulloch.

Rewiring Australia, a non-profit which advocates for electrification, backed the move and said "electrification is the fastest and most cost-effective way to shave thousands of dollars a year from energy bills and lower our emissions."

Australia last month finalised a package of rules for the domestic gas market including a cap on wholesale prices that was first introduced in December.

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