Key facts
- NSW is unlikely to meet its 2030 (50% reduction) and 2035 (70% reduction) emissions targets from 2005 levels.
- The required decarbonization rate needs to be 5.5mn t/yr of CO2e, more than 2.5 times the rate achieved in 2004-23.
- Emissions increased by 7mn t CO2e between 2021-22 and 2022-23.
- Renewable energy rollout and coal-fired power station closures are impacting emissions targets.
- Expansion of coal mines and growth of data centers are identified as significant risks to climate goals.
Australia's New South Wales (NSW) state is unlikely to meet its legislated 2030 and 2035 emissions reduction targets without significant policy changes, according to the state government-owned Net Zero Commission's 2026 Annual Progress Report. The report indicates that the required decarbonisation rate between 2023 and 2030 needs to be 5.5 million tonnes of CO2 equivalent per year, more than 2.5 times faster than the 2.1 million tonnes achieved between 2004 and 2023.
Emissions in NSW actually increased by 7 million tonnes of CO2e between the 2021-22 and 2022-23 financial years, driven by growth in transport, resources, and agriculture, alongside declining land-sector carbon storage. To meet its 2030 target, NSW must reduce annual emissions by 38.5 million tonnes of CO2e from 2022-23 levels, and by a further 30.4 million tonnes by 2035.
The commission highlighted that the renewable energy rollout is behind schedule and delayed closures of coal-fired power stations are strongly impacting emissions. It urged NSW to accelerate energy development approvals for renewable generation, storage, and transmission capacity. The state government has introduced legislation to fast-track these approvals.
Furthermore, the commission recommended supporting electrification through a faster rollout of EV charging networks and requiring new industrial loads, such as data centres, to rely on additional renewable energy sources from the outset. It explicitly warned that continued expansions of coal mines and the rapid growth of energy-intensive data centres pose a significant risk to the state's climate goals, noting that coal mine extensions are inconsistent with legislated targets. Data centres are forecast to add 8 TWh to annual NSW electricity demand by 2035, equivalent to 13% of current demand.
Beyond electricity, the government must prioritize cutting methane pollution, which accounts for 30% of the state's emissions. Practical solutions include scaling feed additives for livestock, increasing landfill gas capture, and mandated on-site abatement at coal mines. This advice follows recent EPA rules requiring underground coal miners to cut methane emissions. The government has also supported emissions reductions through investments in clean manufacturing and projects for biofuels and renewable energy.