Australia is heavily reliant on maritime transport, with approximately 99% of the country's trade by volume and 87% by value conducted via sea. This dependence has made the maritime industry one of the main pillars of Australia's economy. At the same time, the international shipping industry is transitioning towards near-zero emissions fuels and technologies, driven by regulatory changes, customer expectations, and carbon reduction commitments in the supply chain.
The Importance of Carbon Reduction in the Maritime Industry
Greenhouse gas (GHG) emissions from the export of goods related to maritime transport in Australia are estimated to be around 34 million tons per year, equivalent to about 8% of the country's total GHG emissions. Although these emissions are not directly accounted for in Australia's domestic policy goals or frameworks, the Australian economy is significantly exposed to the transition towards net-zero carbon in the maritime industry.
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Carbon reduction in this industry is not only an environmental issue but also serves as an economic opportunity, energy security, and strategic advantage for Australia. Given that key trading partners such as Japan, South Korea, and China are reducing greenhouse gas emissions in global supply chains, Australia's competitiveness will increasingly be influenced by the emissions performance of its export products and transport systems.
Forecasting Export Revenues and Energy Opportunities
It is projected that Australia's resource and energy exports will generate over AUD 400 billion in revenue in the years 2026-27, with iron ore exports alone accounting for more than a quarter of this revenue. Supporting the use of clean marine fuels can help maintain Australia's integrity in low-emission supply chains developed by its major trading partners. This action will also help sustain international competitiveness in key industries such as iron ore, critical minerals, agriculture, aluminum, and other energy-intensive sectors.
Furthermore, as these partners seek green steel, low-emission production, and industrial carbon reduction pathways, the demand for lower-emission goods and supply chains is increasing. The transport industry could be one of the first sources of demand for alternative fuels such as ammonia, which will help attract investment in fuel production, storage, transportation, and port infrastructure.
To realize this opportunity, there is a need for policy coordination, investment, and industrial action to ensure the production of fuels and the necessary related infrastructure to build confidence in scalable private investment.
The presence of concentrated export hubs and shipping routes—such as those supporting Australia's iron ore exports—provides practical opportunities to aggregate demand, demonstrate commercial viability, and support the growth of Australia's clean fuel industry.
Energy Security Opportunities
Australia is also heavily dependent on imported fuels, with about 95% of the country's transport fuels sourced from abroad. This dependence exposes the economy to the impacts of international supply disruptions, price shocks, and geopolitical uncertainties.
While Australia has limited domestic resources for producing marine fossil fuels due to a lack of crude oil resources and international competitiveness, the country has high potential for renewable energy and diverse low-emission biomass resources. Developing domestic production of hydrogen, ammonia, and methanol could enhance Australia's energy security and resilience, providing a safer fuel supply for critical maritime operations, including defense and government fleets.
Ultimately, by leveraging the existing opportunities in carbon reduction within the maritime industry, Australia can significantly contribute to national energy resilience and create new economic opportunities.
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