The Federal Government announced yesterday a new policy that will require Australian gas exporters to reserve 15–25 per cent of production for the east coast market.
This follows the recently completed Gas Market Review, which found a gas reservation policy would help ease pricing pressures for east coast businesses and consumers.
The policy, which will be designed following a consultation process commencing in 2026, has been lauded in concept by manufacturing bodies and unions, but there are demands for more detail.
Manufacturing Australia chief executive officer (CEO) Ben Eade said while five previous Federal Governments had rejected gas reservation “to the detriment of manufacturing jobs”, the Albanese Government is “backing a winner here”.
“But the hard work starts now,” he said. “To be effective, reservation must materially reduce local gas prices. Price is what matters, and right now Australia’s gas prices are wildly uncompetitive by global standards.”
Australian Energy Producers supports a gas reservation policy that underpins new supply.
“As we said from the outset of this review, a well-designed, prospective reservation policy can provide certainty for gas producers and users to invest with confidence,” Australian Energy Producers CEO Samantha McCulloch said.
“However, a reservation policy alone will not fix the east coast gas market. Bringing new supply online sooner, including in the southern states that are facing shortfalls, is the only sustainable way to put downward pressure on prices and keep the market well supplied for the long-term.”
The Australian Workers’ Union (AWU), on the other hand, said it has been campaigning for a gas reservation policy since 2015.
“Our slogan from day one was simple: it’s Australia’s gas, reserve some for us,” AWU national secretary Paul Farrow said. “That basic logic has never faded, and today we see it vindicated.”
Farrow said high gas prices has significantly affected industry.
“My members have been working in a country with more natural gas than almost anywhere else, watching their employers prepare to shut because they can’t access affordable gas,” he said.
“This reservation scheme can secure affordable gas for Australian homes and businesses, better protect industries from international price spikes, and put manufacturers on a stronger footing when negotiating gas contracts.”
While manufacturers and unions hail the reservation policy for creating greater certainty for industry and workers, and the peak gas production body signals the importance of increased supply, Greenpeace believes it could incentivise increased production from an oil and gas industry that should be further controlled.
“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 they rake in billions, households have been squeezed and our communities and environment are paying the price.
“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.”
Bice said that, if implemented effectively, the 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,” he said.
With consultation on the east coast gas reservation policy commencing in 2026, the Federal Government hopes to bring it online in 2027.
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