The value of Australia’s coal and gas exports is predicted to plummet by 50% over the next five years as global demand for fossil fuel falls , according to Treasury modelling.
The modelling, released on Thursday as the government announced its emissions reduction target for 2035, found the annual value of fossil fuel exports is predicted to fall by more than $60bn by 2030 under any future scenario of emissions reduction within Australia.
Energy experts said the modelling suggested the long forecast drop in fossil fuel production and export in Australia could come sooner than some realised.
“This is dropping the truth bomb again,” said Alison Reeve, the energy and climate change program director at the Grattan Institute.
“We have been saying for a long time that if the rest of the world goes for net zero, then it will stop buying our coal and gas.”
The Treasury modelling was released as part of a slew of climate reports this week that included the first detailed climate risk assessment and the government’s plan to reach net zero emissions by 2050.
Treasury modelled three different scenarios: a “baseline” under which existing policies, targets and agendas were followed; a “renewable exports” scenario that includes growth in green hydrogen and other green exports; and a “disorderly” scenario under which the government set weak or no targets for 2035.
The expected combined value of coal and liquified natural gas exports crashed across all scenarios from about $130bn in 2025 to less than $70bn in 2030. Fossil fuel exports would continue, but be worth less than $30bn by 2050, according to the modelling.
The amount of gas and LNG produced in Australia would fall between 24% and 27% by 2035, and between 66% and 68% by 2050.Coal output would drop between 42% and 51% between now and 2035, and between 71% and 74% by 2050 – a slower reduction than is required to reduce greenhouse gas emissions at the pace climate scientists say is required.
Tim Buckley, the director of thinktank Climate Energy Finance, said it showed Australia’s “gift horse” of fossil fuel revenue could turn into a “resources curse”. “Treasury here is talking about fossil fuel exports reaching as low as $35bn in 2040,” he said.
While the value of fossil fuel exports is predicted to crash, export values for commodities needed as the world decarbonises – including green ammonia, green iron, alumina, aluminium and critical minerals like lithium, nickel and cobalt – are expected to boom.
The export value of these “green commodities” in the modelling climbed from about $30bn today to at least $80bn in 2035 and between $109bn and $178bn in 2050.
“Part of the story of Australia becoming a renewable energy superpower is that we are still a resource extraction-based country, but it becomes a different set of resources,” Reeve said.
But Buckley said while he believed green commodities “will boom”, it was not assured that Australia would share the benefits of the boom.
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The Climate Change Authority said this week that CSIRO modelling it had commissioned suggested “Australia’s fossil fuel sector outputs will reduce 30% by 2035 if trade partners take action consistent with limiting warming to 1.5C, or 13% if the pace of global action aligns with 2C of warming”.
“The magnitude of these long-term projected shifts underscores the need for early, strategic planning to safeguard Australia’s economic resilience,” the authority said.
Samantha McCulloch, the chief executive of gas industry group Australian Energy Producers, said gas would “remain essential for Australia’s energy security and transition to net zero by 2050”.
She said the authority had “recognised that Australia’s LNG exports will continue to underpin energy security and decarbonisation in our region”.
She pointed to forecasts her organisation had commissioned from consultants Wood Mackenzie that suggested global LNG demand would “remain strong”, and said the International Energy Agency had suggested “south-east Asia’s LNG imports will increase eight-fold by 2050 under current policies”.
“The growing LNG demand in our region presents a major economic and strategic opportunity for Australia while supporting our region’s transition to cleaner energy,” McCulloch said.
The Minerals Council of Australia did respond to a request for comment on the modelling.
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This story was amended on 20 September 2025. An earlier version stated that Australia’s earnings from coal and gas exports were forecast to fall by $50bn by 2035; in fact, they are set to fall by $60bn by 2030.
