In an exciting first, the Australian Energy Market Commission (AEMC) has officially incorporated emissions reduction considerations into the national energy rules, solidifying a significant regulatory shift towards net zero. 

The change is set out in a final determination following rule change requests from energy ministers to 'harmonise' or align the electricity and gas rules with recent amendments to the national energy objectives, so that market bodies can consider emissions reduction in their planning and decision making.

The change will aid electricity networks in providing investment clarity and certainty as the energy sector transitions to net zero.  

The final rules allow networks and gas pipeline operators to propose expenditure that would contribute to meeting emissions reduction targets, which was not possible under the previous rules.

Chair Anna Collyer says taking the step of aligning the rules with the updated national energy objectives supports the energy industry's key role in reducing Australia's greenhouse emissions.

"Last year's amendments to the national energy objectives marked the biggest reform since the objectives were first developed.

"This change is significant because it presents our first significant opportunity to formally consider emissions reduction in our work, helping to manage the massive transformation towards a net zero future, as we continue to protect the long term interests of consumers," Ms Collyer said.

The completion of this rule change also marks an important milestone as it implements recommendations made in the AEMC’s Transmission Planning and Investment Review – Stage 3 report, published in May 2023.

Meanwhile, the AEMC has updated the targets statement to include a new 2035 emissions target for NSW, set by legislation passed in December 2023.  

The new target is to reduce net greenhouse gas emissions in New South Wales by at least 70 per cent from 2005 levels by 30 June 2035. It was introduced by the Climate Change (Net Zero Future) Act 2023 of NSW.  

Under the updated national energy laws and rules, energy market bodies must consider the targets listed in the statement when applying the new emissions limb of the national energy objectives.

The final rules take effect from today, 1 February 2024.  

For more information on harmonising the energy rules with the updated objectives, visit the project page here.

For more information on the updated targets statement, visit the project page here

Media: Jessica Rich, 0459 918 964,