Australia's fossil fuel exporters have been put on notice of waning appetite for their product from some of their biggest customers in Asia as South Korea's adoption of a net-zero emissions target increased the share of markets committed to decarbonisation to over 70 per cent.
Between them, South Korea, Japan and China – who now all are targeting net-zero emissions by 2050 or 2060 – accounted for $75.6 billion of Australia's total $103 billion of exports of coal and gas last year.
Their goal to reach carbon neutrality suggests sharply reduced use of coal and potentially more limited demand for gas, with remaining emissions to be cancelled out using offsets or prevented using carbon capture and storage (CCS).
"This is a powerful market signal that should help encourage other Asian nations to follow suit and send a strong message to carbon-intensive trade partners further afield that the region is moving to decarbonise," Asia Investor Group in Climate Change executive director Rebecca Mikula-Wright said.
The move has stoked simmering feuds between factions within the Labor party over rhetoric on coal and gas, with union leaders urging MPs to tone down their attacks on the fuels which are vital to support the transition to clean energy. At the same time, Prime Minister Scott Morrison continues to resist pressure to commit to net-zero by a set date, putting Australia in a shrinking group that includes Turkey, Mexico, Israel and the US, although the latter would change under a Biden administration.
NSW Premier Gladys Berejiklian told The Australian Financial Review CFO Live event on Wednesday she is "extremely comfortable" with her state's position in the transition in light of the commitments by Japan, Korea and China, pointing to its balance between reliance on coal and measures to stimulate investment in new energy sources.