Policy update June 2021 16 June 2021

By Rob Murray-Leach

International ambition on climate change continues to grow, which is ratcheting up pressure on Australia to reduce its emissions.

On 11-13 June the heads of the Group of Seven (G7) countries met in the UK. The G7 members – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – are the largest democracies in the world in economic terms. Collectively, they account for around 40 per cent of global gross domestic product (GDP), which means when they align it can have a very significant impact on world affairs. 

Australia is not formally part of the G7 because its economy is smaller than the G7 members, and the value of the G7 is that it’s a small forum that can secure agreement relatively easily. However, Australian Prime Ministers have now been invited to three successive G7 meetings, including Scott Morrison who was invited to attend the G7 meeting that took place this week in the UK.

The Prime Minister’s primary focus at the G7 was rallying multilateral support for a robust response to China, which has imposed a number of trade sanctions on Australia. However, the G7 meeting covered a range of other issues, including responding to COVID-19, economic recovery and climate change.

The G7 communiqué from the meeting sets out the actions that its members have agreed to. I could try and characterise the text of this document, but simply quoting from sections 37 to 43 of the communiqué is much more illustrative:

  • “We commit to net zero no later than 2050”;
  • “We have each committed to increased 2030 targets… which will cut our collective emissions by around half compared to 2010…”;
  • “We call on all countries, in particular major emitting economies, to join us in these goals as part of a global effort, stepping up their commitments to reflect the highest possible ambition and transparency on implementation under the Paris Agreement”;
  • “In our energy sectors, we will increase energy efficiency, accelerate renewable and other zero emissions energy deployment, reduce wasteful consumption, leverage innovation all whilst maintaining energy security. Domestically, we commit to achieve an overwhelmingly decarbonised power system in the 2030s”;
  • “Recognising that coal power generation is the single biggest cause of greenhouse gas emissions… domestically we have committed to rapidly scale-up technologies and policies that further accelerate the transition away from unabated coal capacity”;
  • “We reaffirm the collective developed country goal to jointly mobilise $100 billion per year [of finance] from public and private sources, through to 2025 in the context of meaningful mitigation actions…”

While the G7 agreement makes strong statements about the importance of energy efficiency in the industrial and buildings sectors, it doesn’t go into much detail with the exception of supporting an initiative to double the efficiency of lighting, cooling, refrigeration and motor systems sold globally by 2030.

I wouldn’t usually quote from a document at such length, but this is important. While Australia isn’t part of the G7 and Morrison didn’t sign up to communiqué, this document makes it clear that global pressure on Australia, and companies that operate in Australia, to reduce their emissions will only increase. The communiqué also makes it clear that G7 nations will reduce their demand for coal and support developing countries to move away from coal.

Rational businesses will conclude that this bodes very badly for the long-term prospects for Australia’s thermal coal exports. While Australian politics is often far from rational, there is only so long that politicians can pretend that thermal coal has a rosy future.

In the meantime, the Australian Government will be under a lot of pressure over the next 12 months to cut emissions in ways that are less contentious than shutting down coal mines – including through energy efficiency. Morrison will have experienced this pressure first-hand at the G7 meeting, and this can be a powerful motivator. However, how the Government will respond to this pressure is still far from clear.


Many Victorians are breathing a sigh of relief that they’re out of lockdown again. Most business activities are now permitted, including upgrades under the Victorian Energy Upgrades (VEU) program.  We encourage any members that were seriously affected by the lockdown to look at the support available from the Victorian Government for businesses.

The Victorian Government also held a major online forum on the VEU program on 25 May. The slides from the webinar are available here, and the full presentations are online in two sections - Part 1 and Part 2.

A key topic at the forum was that reductions in the incentives for lighting will drive accredited parties to find other activities to generate certificates. With the certificate price reaching over $60, there are good incentives to trial a whole range of activities, including:

  • High efficiency water heaters;
  • High efficiency space heating and cooling systems;
  • Insulation installation (if it is ever reintroduced into the VEU);
  • Commercial boiler replacement; and
  • IT cooling upgrades.

The forum also reiterated that the ‘emissions factor’ for electricity will go down over time, to reflect the increase in renewable generation. This means that the incentive to for gas efficiency and switching from gas to electricity will increase over time. The Victorian Government will be consulting on a range of new activities in the second half of 2021, specifically: cold rooms; smart thermostats; building energy management information systems; and pipe lagging.

On a final note relating the VEU, some electricians who appear to have faked activities under the VEU have been referred to Victoria Police and Energy Safe Victoria. I am delighted to see the Essential Services Commission taking this kind of action, as clamping down on dodgy work is essential to the reputation and strength of the VEU.

The Victorian Government is proceeding with its work on a range of other programs and policies. The Victorian Government’s program offering $1,000 rebates on split system reverse cycle air conditioners to 250,000 vulnerable households now has its website up. This program will also offer up to $200 for gas decommissioning and $500 for switchboard upgrades. The program launched in May to community housing organisations and will open to the general public in July.

The Victorian Government will also start rolling out $112 million to upgrade the energy efficiency in 35,000 social houses. With around $2,500 per household, my guess is that this program will focus on ‘big-bang-for-buck’ measures, such as insulation and draught-proofing, rather than comprehensive upgrades.

The Victorian Government is also continuing to roll out projects under the Greener Government Building Program (GGB) and incentives of up to $2,000 remain available for energy efficiency retrofits for SMEs under the Small Business Energy Saver Program.


The Queensland Government released its 2021-22 budget on 15 June 2021. Queensland appears to be trialling Labor’s national political strategy around climate change, which involves less focus on closing coal generators and more focus on creating new jobs in clean energy industries. The centrepiece of the budget is a $3.34 billion Queensland Jobs Fund, of which $2 billion is dedicated to the Queensland Renewable Energy and Hydrogen Jobs Fund.

Unfortunately, the budget doesn’t change the Queensland Governments’ unenviable position as one of the laggards on energy efficiency policy. Looking on the bright side – as one should in the sunshine state – last week the Premier, Anastasia Palaszczuk, announced that she has tasked the Queensland Energy Minister, Mick de Brenni, to develop a ten-year energy plan.

The EEC’s CEO, Luke Menzel has been invited to join the Government’s Ministerial Energy Council that will support development of the new plan, so we’ll continue to engage proactively on behalf of members to elevate the role of the demand side in Queensland’s energy priorities.

Other jurisdictions

While the big announcements have all been coming out of Victoria in the past month, the NSW Government is doing a lot of work behind the scenes on the Energy Saving Scheme and their other programs. As previously noted, we expect announcements and consultation from the NSW Government in the second half of 2021. 

Other policies

The Energy Security Board’s work on a post-2025 electricity market is starting to wrap up, and we’ll provide a summary of this work once the final report is released. In the meantime, our submission from 9 June can be found here. The Australian Energy Market Commission is also likely to finalise their position on the Fast Frequency Response in the near future, and our recent submission to that can be found here.

While we have been involved in a huge range of other work, from residential disclosure and NABERS to the development of energy management systems for large energy users, we are still awaiting public statements on these issues. However, I think that it’s fair to say that the focus on residential retrofitting and industrial energy efficiency has grown considerably over the last year, and we look forward to discussing these issues more in future newsletters.

Rob Murray-Leach is Head of Policy with the Energy Efficiency Council

Connect with Rob on LinkedIn.

This article was originally published in the June edition of Efficiency Insight.