From Coal to Cooperation: Australia’s Net Zero Role in the Indo-Pacific

Snehin Talusani |

Image sourced from Wikimedia Commons.

As the world races toward net zero, the Indo-Pacific is emerging as the epicentre of the global energy transition. From hydrogen supply chains between Australia and Japan to solar investment across Southeast Asia, the region’s choices will shape whether the planet meets its climate targets. For Australia, long known as a fossil-fuel powerhouse, this shift presents both an identity test and a generational opportunity to lead through cooperation rather than competition.

Australia’s Climate Standing

Australia has pledged to reach net-zero emissions by 2050, strengthened the Safeguard Mechanism to cap industrial emissions, and committed over AUD $40 billion in clean-energy investment this decade. Yet it remains the world’s second-largest coal exporter and a major LNG supplier. This dual identity, the green partner and the carbon trader, creates tension in Australia’s diplomacy.

In recent years, Australia has tried to reposition itself as a regional climate leader. For example, the Pacific Climate Infrastructure Financing Partnership promises support for small island states that are vulnerable to rising sea levels. Meanwhile, the National Hydrogen Strategy (2024) aims to make Australia a renewable-energy exporter to Asia. Yet credibility in the Indo-Pacific depends on consistency, and regional neighbours want to see that Australian policies at home align with its advocacy abroad.

The Regional Context

Across the Indo-Pacific, nations are pursuing growth while grappling with the need to decarbonise. Indonesia’s Just Energy Transition Partnership (JETP), Vietnam’s surge in renewable energy and Fiji’s climate-resilience programs demonstrate that the region’s momentum is real, albeit uneven. Many governments face financing gaps, technology shortages and geopolitical pressure to choose between United States (US) or China-backed energy initiatives.

Here lies Australia’s opportunity. As a trusted middle power with deep scientific, engineering and financial expertise, Australia can help bridge these divides. Clean energy collaboration, from hydrogen exports to critical minerals supply chains, can reinforce regional trust while accelerating decarbonisation. If done strategically, this could strengthen both climate outcomes and Australia’s diplomatic influence.

The Credibility Challenge

Australia’s biggest obstacle to exercising its potential is perception. Despite its policy progress, it continues to approve new fossil fuel projects and remains heavily reliant on coal-fired power. For Pacific nations on the front lines of climate change, this contradiction undermines Australia’s moral authority. As Vanuatu’s Prime Minister argued at the UN last year, climate leadership begins at home.

Maintaining credibility requires clear priorities. Australia must establish a timeline to phase out fossil fuel subsidies, strengthen domestic renewable manufacturing and demonstrate measurable progress toward its 2030 targets. A nation that exports emissions while preaching decarbonisation risks alienating the very partners it seeks to lead.

Leading from the Middle

Australia cannot outspend China’s Belt and Road Initiative or match the scale of the U.S. Inflation Reduction Act. Yet it can still lead from the middle — through technology sharing, transparent partnerships and regional coordination. 

By expanding hydrogen diplomacy, Australia can build on existing agreements with Japan and Singapore to anchor a regional Hydrogen Supply Chain Alliance that sets common standards for certification, safety and trade. Likewise, collaboration on critical minerals with Indonesia and the Philippines could ensure the ethical sourcing of lithium, nickel and rare earths, which are essential to batteries and electric vehicles.

Moreover, expanding concessional loans and technical assistance through agencies such as Export Finance Australia would strengthen climate resilience across Pacific nations, which face rising sea levels and extreme weather events. Finally, people-to-people initiatives such as scholarships, training and joint research in renewable engineering and policy should be concurrently pursued to foster long-term trust and capacity. 

Taken together, these measures would position Australia not as a distant donor but as an engaged regional partner, advancing the shared goals of stability, prosperity and sustainable development throughout the Indo-Pacific. The next challenge is ensuring these efforts are coordinated and lasting, rather than fragmented across individual agreement.

A Regional Green Compact

What the Indo-Pacific needs is not another geopolitical contest, but a regional green compact — a cooperative framework linking trade, technology and trust. Australia could champion a climate forum modelled on ASEAN Energy Cooperation meetings, dedicated to coordinating hydrogen certification, carbon accounting systems and clean-energy infrastructure.

By convening rather than competing, Canberra can position itself as the connector between developed and developing economies, a role that suits both its capabilities and its diplomatic temperament.

Looking Ahead

Australia’s success in the Indo-Pacific energy transition will depend less on grand announcements and more on steady, credible delivery. The world no longer measures leadership by promises, but by partnerships that work.

If Australia can align its domestic decarbonisation with its regional outreach, it can bridge the gap between energy security and sustainability, shaping a future where the Indo-Pacific powers the world with clean energy. In doing so, Australia will not only protect its climate interests but redefine its role in the century’s most consequential region.

Snehin Talusani is a Chemical Engineering student at the University of New South Wales, focusing on sustainability. He is passionate about Australia’s role in shaping the Indo-Pacific’s clean-energy future.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Young Australians in International Affairs. All content is original, and no plagiarism has been used in the preparation of this article.