Government to require up to 25% of gas production reserved for domestic market
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The news: The federal government has announced it will introduce a domestic gas reservation scheme in 2027, requiring exporters to reserve between 15% and 25% of gas production for the domestic market.
The final proportion will be determined following consultation with the industry about the design of the scheme.
The context: The government has directly tied this scheme to its Future Made in Australia agenda, noting in its announcement that secure and affordable gas is "key ... particularly for nationally significant, trade exposed industrial users who can’t currently electrify".
The principles guiding the design of what will be ultimately implemented includes the need to respect existing domestic and international contracts made prior to the 22 December 2025 announcement of a scheme. It should increase domestic supply as existing contracts expire, put downward pressure on prices, prioritise domestic supply obligations and encourage long-term domestic gas supply contracts.
What they said: "Gas has an important role to play in our energy system as we transition towards 82% renewables. Unlike coal, gas power generators can be turned on and off in a couple of minutes — providing the ultimate backstop in our energy grid," Energy and Climate Change Minister Chris Bowen said in a statement.
The Australian Workers’ Union (AWU) has described the domestic gas reservation scheme as an “historic victory” following a campaign from the union since 2015.
AWU national secretary Paul Farrow said the idea had been “dismissed out of hand by previous governments”.
“But we held hundreds of meetings with politicians of all stripes and industry figures,” he said.
“Obviously there is detail that still needs to be shored up and the AWU will continue to work closely with decision makers as the consultation process progresses. We need to know, for example, that appropriate measures will be put in place to guarantee that gas will be available to industry from Day One of the scheme.
"The gas market won't be fixed until we solve the price problem once and for all. But today's announcement puts us firmly on that path."
But the decision has attracted a sharp reaction from environmental groups, with Greenpeace slamming the policy as deepening fossil fuel dependence.
“This reservation policy confirms what Australians have known for years: handing control of our energy market to multinational gas companies has been a massive failure,” Greenpeace Australia Pacific campaigner Geoff Bice said.
“While this policy does make some long overdue steps to curb the export rorts, it is alarming that the government is continuing to double down on new gas — despite the clear reality that Australia already has more than enough gas to meet our domestic needs.
“If implemented effectively, this reservation policy should mean no new gas projects are needed — but without strong guardrails, it risks entrenching our dependence on expensive, harmful fossil fuels even further.”
The sources: Government media release, Australian Workers’ Union media release, Greenpeace media release
