AREEA has welcomed the Federal Government’s new domestic gas reservation policy announced on 22 December 2025, while urging careful design and investment certainty to ensure the initiative successfully improves supply and affordability for Australian users.
Under the policy, gas exporters on the east coast will be required to reserve a portion of production, broadly expected at 15–25 per cent, for the domestic market. The scheme is being developed through consultation this year and is slated to take effect in 2027, but will apply to any new contracts entered into from the date of announcement.
Chief Executive Steve Knott AM said access to reliable and affordable gas remains a central public policy objective, particularly as natural gas plays an increasingly important role in firming electricity supply and supporting major industrial users.
“Resources and energy employers support policies that genuinely improve supply outcomes for Australian households and businesses,” Mr Knott said.
“However, gas reservation schemes are not cost-free. If poorly designed or implemented without regard to commercial realities, they risk undermining investment confidence, delaying new supply and ultimately worsening the very shortages they seek to address.”
AREEA emphasised that Australia’s gas sector is capital-intensive, globally competitive and reliant on long-term investment decisions made decades in advance.
Policy stability and regulatory certainty are essential to ensuring continued development of new gas projects.
“Any reservation mechanism must be predictable, transparent and limited to new supply, with clear rules that respect existing contractual commitments,” Mr Knott said.
“Investors need confidence that Australia remains a reliable and competitive destination for energy investment. Without that confidence, new projects – and the jobs, royalties and domestic supply they deliver – simply will not proceed.”
AREEA also noted that domestic gas affordability challenges are driven by a range of factors, including declining legacy fields, regulatory delays, infrastructure constraints and increasing demand for gas-fired firming.
“Reservation alone will not solve Australia’s gas challenges,” Mr Knott said.
“A durable solution requires timely project approvals, regulatory efficiency, infrastructure investment and policies that encourage new supply to come online. Without new supply, there is nothing to reserve.”
AREEA called on the Government to engage closely with industry as the details of the scheme are developed, to ensure the policy supports domestic supply objectives while maintaining Australia’s competitiveness as a global energy producer.
