Federal Government announces new 2035 climate target
18 September 2025
Background
The Federal Government has announced a new 2035 climate target of 62–70% reduction on 2005 emissions, alongside major support measures essential to industry.
In a significant win for the sector, the AFGC welcomes the expansion of the National Reconstruction Fund (NRF), including the $5 billion Net Zero Fund, which will support food and grocery manufacturers to invest in low-emissions technologies and advanced manufacturing. These measures strengthen regional jobs, supply chain security and global competitiveness.
Key measures supporting the target
- $5 billion Net Zero Fund (National Reconstruction Fund) to decarbonise industrial facilities and scale low-emissions manufacturing
- $85 million energy efficiency support for households and businesses
- $2 billion for the Clean Energy Finance Corporation to help reduce electricity costs
- $1.1 billion to boost clean fuels production in Australia
- $40 million to accelerate kerbside and fast EV charging infrastructure
- $50 million to support sports clubs’ decarbonisation initiatives
Priority areas for emission reductions
- Clean electricity across the economy (renewables, storage, transmission)
- Electrification and efficiency in vehicles and energy use
- Clean fuels and low-carbon hydrogen development
- Innovation and new technologies through Future Made in Australia and ARENA
- Net carbon removals via landholder participation and ACCU schemes
Implications for our sector
- Scope 3 emissions represent a significant part of the sector’s footprint – To help members navigate emissions reporting, the AFGC launched the Scope 3 Emissions Workbook, which includes Australian-sourced emissions factors for calculating greenhouse gas emissions associated with purchased goods and services. Building on this, AFGC is working across the value chain to reduce reporting burden and accelerate emissions reductions
- Opportunities exist to leverage Government funding and programs to enhance energy efficiency, decarbonise production and maintain competitiveness
- Global shift to clean energy signals significant economic and jobs opportunities for Australian industry
AFGC action
The AFGC will continue to monitor policy implementation and engage with Government, ensuring the sector is supported to meet targets while remaining competitive. Today’s announcements represent a tangible step forward in modernising Australia’s largest manufacturing sector and unlocking growth and employment opportunities in the transition to a low-carbon economy.
Contact
Sarah Collier
Director – Sustainability
sarah.collier@afgc.org.au
