Don't believe the hype: Victorian government deserves credit for not buckling to aggressive pro-gas campaign

The Guardian

4 hours ago

It didn't go as far as previously flagged, but don't believe the negative hype about Victoria's plan to start weaning off gas: it is a significant step that will help drive households and businesses away from fossil fuels and cut energy bills.
The Allan Labor government announced that gas heating and hot water systems will be banned in all new homes and nearly all new commercial buildings, including schools and hospitals, from 1 January 2027. They will not be connected to the state's gas network and will run on electric systems. New agricultural and manufacturing buildings, some of which use gas for high-temperature industrial processes, are excluded.
Rental properties including public housing – a third of the housing stock – will have to move to electric appliances when existing gas heaters and water systems reach the end of their lives, starting from 1 March 2027. Owner-occupiers will have to make a similar shift, but only for hot water.
Crucially, landlords will also have to do a range of energy efficiency work on their properties, including installing an efficient electric cooling system in main living areas – or a reverse-cycle air conditioner that both heats and cools – sealing leaky external doors, windows and wall vents, and making sure there is ceiling insulation. If properly implemented, these minimum standards will further cut bills and lead to homes being better temperature-regulated and healthier to live in.
The logic for the move away from gas is straightforward. There are three main parts to it.
Though still marketed as 'natural', and sometimes even as 'clean', gas is actually methane – a highly potent fossil fuel. It releases plenty of greenhouse gas when burned. The electricity grid is moving from being dominated by coal-fired power to renewable energy. Electric appliances are better for the planet and the people who live on it. It is a necessary part of getting to net zero emissions.
Gas is expensive. Analysis has found electrification of appliances should save households nearly $1,000 a year on their energy bills. There are upfront costs in getting new systems, but the Victorian policy is not forcing people to change over until their existing system is dead, and offers rebates to help with the change.
Victoria is running out of gas. For decades, it has relied on reservoirs in Bass Strait, but they are running low, and all potential new sources are expensive. The state government wants to install a 20-year floating liquified natural gas (LNG) import terminal near Geelong to make sure demand is met. It sounds ridiculous, but may be the least bad option available – after the most obvious one: reducing gas use as much as possible so that it is available for the few industrial processes that do not yet have viable alternatives.
Victoria is Australia's most gas-reliant state, with about three-quarters of homes connected to the gas network, and there is a decent case that it could be going further. Labor shelved an earlier proposal to also require owner-occupiers to buy electric heaters when their gas heaters died. Gas cookers are not included at all. They can continue to be installed indefinitely.
But the government deserves credit – and has been praised by advocates and some in industry – for not buckling to an at-times aggressive pro-gas PR campaign that has lobbied ministers and government staff and sought to sway the public.
Australian Gas Networks-sponsored MasterChef Australia, which is shot in Victoria, ran advertisements that were found to include unsubstantiated claims about the potential for 'renewable gas' to replace fossil fuel gas in networks. The Herald Sun claimed to support net zero emissions commitments, but ran prominent advertorials sponsored by gas companies that neglected to tell readers that the fossil fuel is part of the climate problem.
Some organisations, such as the Victorian Chamber of Commerce and Industry, suggested that the state should have instead just backed new gas extraction. The chamber's chief executive, Paul Guerra, continued his criticism on Tuesday, telling 3AW that the policy – which just imposes minimum standards most homeowners take for granted – was 'class warfare' against landlords.
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Others, such as the Australian Industry Group, were cautious but open. It welcomed the changes as 'pragmatic', and argued that over the next decade it could free up gas supply equivalent in scale to what would be extracted from New South Wales' Narrabri gas field over the same period.
That the package got up is primarily due to the state's longstanding energy and climate minister, Lily D'Ambrosio, who designed and championed it. She won support from the plumbers' union, whose members install gas appliances.
The final plan was backed by conservation organisations including Friends of the Earth and Environment Victoria, which said it showed the government was willing to put 'the interests of households and business owners ahead of wealthy gas corporations'. The head of the Victorian Council of Social Service, Juanita Pope, said the new rental standards were 'a major win' that would 'literally save lives'. The chief executive of the thinktank Rewiring Australia, Francis Vierboom, summarised: 'It's a BFD.'
The chief executive of the Energy Efficiency Council, Luke Menzel, said while it was disappointing that the mandatory phasing out of gas space heaters in owner-occupied homes was dropped, the government should be applauded for making 'big, bold decisions' – and the rest of the country should be paying attention. 'It is a nation-leading reform,' he said. 'It is setting the pace for the other states.'
It is also an assessment of what the government believes is politically durable. More will be needed. But it is a promising start.
Adam Morton is Guardian Australia's climate and environment editor