The Albanese government submitted a new, more ambitious, emissions targets to the United Nations on Thursday, seeking to end a decade of foot dragging on climate change.
Prime Minister Anthony Albanese raised the country's 2030 emissions reduction target to 43 per cent, saying it "sets Australia up for a prosperous future, a future powered by cleaner, cheaper energy".
Australia's existing commitment, made under the Paris Agreement, called for a more modest 26-28 per cent cut on 2005 emissions levels.
Mr Albanese sought to frame the decision as an economic boon. "What business has been crying out for is investment certainty," he said.
Climate action has been politically fraught in Australia, a country where fossil fuels are still vital export earners and feed the majority of domestic energy production.
More than a decade of political sparring — known as the "climate wars" — saw Australia labelled a climate laggard internationally, in part due to its unwillingness to phase out coal by 2030.
In 2022, MIT ranked Australia 52nd of 76 nations on its Green Future Index, which rates how much countries are shifting towards an environmentally sustainable economy.
During his election campaign, Mr Albanese and the Labor party pledged to "end the climate wars" and raise Australia's emissions targets.
He said on Thursday that when speaking with global leaders since taking power "they have all welcomed Australia's changed position" on climate action under the Paris Agreement.
The issue of emissions reduction and fossil fuel exports was a key point of tension between Australia's previous government and Pacific leaders, who have labelled climate change the greatest threat to the region.
Mr Albanese tried to sidestep criticism that higher targets could harm Australian jobs saying that he wanted to "seize the opportunity that is there from acting on climate change".
He said the new targets would give business the certainty it needed to "invest over a longer time frame than the political cycle of three years".
Even before the announcement though, Australia's fossil fuel industry was in flux with many major companies seeking to decarbonise their operations.
BHP has been unable to find a buyer for its Mt Arthur coal mine in the Hunter Valley - its largest one in NSW, and will now spend $999 million on closing the mine and rehabilitating the site over the next 10 to 15 years, with final plans for the site yet to be determined.
The open-cut mine near Muswellbrook employs about 2,000 people and provides thermal coal to international customers, and BHP is licensed to operate the mine until 2026 and will now ask permission from the state and federal governments to extend that timeline until 2030.
On Wednesday, fossil fuel giant BP announced that it would take out a 40.5 per cent stake in a renewables project in Australia, billed as the largest power station on earth.
Anja-Isabel Dotzenrath, BP's executive vice president of gas and low carbon energy, said the company believed that "Australia has the potential to be a powerhouse in the global energy transition".
