The Grattan Institute is urging Australian governments to phase out natural gas by 2050.

The Grattan Institute has called on state and territory governments in Australia to establish timelines for the elimination of natural gas usage as part of a nationwide endeavour to achieve net zero emissions by 2050. 

The think tank's latest report (PDF) warns that Australia will fail to meet its carbon neutrality target without transitioning away from gas, stressing that delaying action will only compound the challenges. 

Currently, gas production and consumption contribute to 22 per cent of the country's carbon emissions.

According to the report, alternative options like hydrogen and biomethane are too expensive and distant to viably replace natural gas. 

Consequently, approximately 5 million Australian households must be electrified, despite the potential difficulties faced by households, businesses, and regulators. 

Tony Wood, Grattan's energy program director and co-author of the report, says governments must urgently establish deadlines to end gas use, acknowledging the complexity of the task but affirming its feasibility.

In Victoria, the most gas-reliant state, around 200 homes will need to transition from gas to electric power daily until 2050 to achieve net-zero carbon emissions. 

The Grattan Institute highlights the need for financial support in the form of low-interest loans, tax incentives for landlords, and funding for homeowners to bridge the cost disparity between electric and gas appliances.

The gas pipeline owners, however, are resisting the push for electrification and advocating for the incorporation of “renewable gas”, including hydrogen and biomethane, to maximise the use of existing infrastructure. 

Grattan Institute countered this proposal, citing economic, technical, and logistical reasons that render widespread substitution of “green gas” unworkable. 

The report also called for the phase-out of gas appliance sales and new gas connections, citing the inefficiency and potential health risks associated with gas cooking.

The Grattan Institute additionally highlights the inadequacy of current regulatory frameworks in supporting the energy sector transition, cautioning that they could lead to the bankruptcy of gas network businesses or the stranding of customers on redundant and costly gas networks. 

Clear dates for the closure of gas distribution networks were deemed necessary to address this issue.

The report concludes by stressing the urgency of the transition, asserting that all-electric homes are more cost-effective and beneficial for health and the environment. 

It urges governments to take immediate action, saying further delays will only exacerbate the challenges faced during this necessary transition.