Federal Budget 2026-2027: energy and climate snapshot

It was not surprising to see significant new investment in fuel security initiatives, in addition to ongoing investment in the (largely existing) energy transition and circular economy programs together with an ongoing focus on affordable energy and fuel supply. 

Here are the key announcements impacting the energy and resources sectors:

• With Australia responsible for hosting COP31, $147.8 million has been allocated for the pre-Cop and Leaders events in the Pacific and for enhancing security, resilience and economic opportunities with Pacific partners.
• $142.3 million over five years, including $97.2 million to continue implementing the National Consumer Energy Resources Roadmap, $15.9 million towards the Australian Energy Regulator, reallocation of $15.4 million to expand the Vehicle Electrification Nationally program, and $14.6 million for battery inspections under the Cheaper Home Batteries program.
• $23 million in 2026-2027 for climate and emissions reduction activities, including for strengthening collection of data and methodology development for the Australian Carbon Credit Unit Scheme and for climate risk management capabilities across the public service, and a specific allocation of $10 million over two years from 2026-2027 for the Australian Energy Regulator to expand electricity market monitoring and reporting activities.
• $136 million to continue to implement the Environment Protection & Biodiversity Conservation Act 1999 reforms, including establishing the new National EPA by 1 July 2026. This also includes a specific allocation to the new Nature Repair Market and environmental offsets. Ongoing reform to streamline approvals with the states is crucial for supporting the efficient roll-out of grid-scale energy projects across the country in order to meet our National climate commitments.
• Allocations to ongoing circular economy initiatives ($17 million) and also for solar panel recycling ($24.7 million) will be important for supporting the industry and ensuring critical minerals can be reused.
• Establishment of a new Fuel and Fertiliser Security Facility ($7.5 billion) to increase domestic supply and storage capacity, including through loan facilities, insurance and price support. A further $3.2 billion for an Australian Fuel Security Reserve, including increasing the minimum stockholding of reserves to 50 days.
• $35.5 million over four years for a new Domestic Gas Reservation Mechanism to boost security and affordability of domestic supply, with a specific allocation to reform offshore resources regulations, including providing more clarity on consultation requirements for offshore resources approvals.