Australia’s transport emissions may have reached a turning point, with new government figures showing the nation’s second consecutive annual decline in transport-related greenhouse gas emissions outside the disruption caused by the COVID-19 pandemic.
The latest National Greenhouse Gas Inventory reveals transport emissions fell by 0.6 per cent in the year to December 2025, dropping from 101.5 million tonnes to 100.8 million tonnes of carbon dioxide equivalent (CO2-e).
The reduction was largely driven by a three per cent decline in petrol consumption.
The result forms part of a broader decline in Australia’s overall emissions, which fell 2.1 per cent year-on-year to 458.9 million tonnes of CO2-e, representing a reduction of 9.7 million tonnes.
Government officials and industry observers believe growing electric vehicle adoption is now beginning to have a measurable impact on national transport emissions.
Climate change and energy minister Chris Bowen said the rapid growth of EV sales was contributing to the trend.
“EVs have grown from less than four per cent of new light vehicle sales in 2022 to more than 20 per cent in the first four months of 2026,” he said.
“Our New Vehicle Efficiency Standard is making sure Australians get more choice of efficient vehicles that save money at the bowser and cut emissions.”
The findings are particularly significant because they suggest transport emissions may be approaching, or may already have passed, their historical peak.
While emissions fell during the pandemic due to lockdowns and travel restrictions, the latest figures represent a second consecutive decline under normal economic conditions.
Importantly, the data only covers the period to December 2025 and therefore does not fully reflect the substantial increase in EV sales recorded during the opening months of 2026.
Electric vehicle sales surged to record levels during the first four months of the year, accounting for more than one in every five new vehicle sales nationally.
Industry analysts suggest future emissions reports could show an even stronger decline if current EV adoption rates continue.
The report notes that rising fuel prices and broader consumer acceptance of battery-electric vehicles have accelerated the transition away from conventional petrol-powered vehicles. However, the transition remains uneven across the broader vehicle fleet.
While petrol consumption declined significantly, diesel use increased by 0.4 per cent during the same period, reflecting continued growth in freight activity and Australia’s expanding fleet of diesel-powered SUVs, utes and commercial vehicles.
According to the inventory, diesel vehicle numbers have more than doubled since 2014, while petrol-powered vehicle numbers have increased by only five per cent over the same period.
Outside the transport sector, electricity generation delivered some of the nation’s largest emissions reductions.
Electricity sector emissions fell by 3.8 per cent as renewable energy generation reached record levels, accounting for 43.2 per cent of National Electricity Market output.
Battery storage also played an increasingly important role in the electricity network, with battery discharge volumes almost tripling during 2025 and reducing the need for gas-fired generation during peak demand periods.
The inventory found Australia’s total emissions are now 24.5 per cent below 2005 levels, the baseline year used for the nation’s Paris Agreement commitments.
With the New Vehicle Efficiency Standard (NVES) now in force and EV sales continuing to climb rapidly, forthcoming emissions inventories are expected to provide a clearer indication of whether Australia’s transport sector has entered a sustained period of emissions decline.
For policymakers, car-makers, and environmental groups alike, the next few years may determine whether electric vehicles can meaningfully reshape Australia’s transport emissions trajectory or simply slow its growth.
