The Australian Government has announced a new domestic gas reservation scheme aimed at securing affordable gas supplies for Australian households and manufacturing industries, with exporters to be required to direct part of their production to the domestic market from mid-2027.
Under the plan, gas exporters will need to supply the equivalent of 20 per cent of their exports to the Australian market from 1 July 2027. The Federal Government said the measure is intended to place downward pressure on domestic gas prices, reduce exposure to global price volatility and strengthen Australia’s energy security.
In a media release, the government said the policy would support its “Future Made in Australia” agenda, particularly for industrial and manufacturing sectors that remain reliant on gas and cannot yet fully electrify.
The government said gas would continue to play a role in Australia’s energy transition, particularly as renewable energy capacity expands. It noted that gas-fired generators can be activated quickly to provide backup supply for the electricity grid.
The new Domestic Supply Obligation powers will be jointly administered by the Minister for Resources and the Minister for Energy and Climate Change, in coordination with the Minister for Industry and Innovation. The Government said legislation would be introduced alongside further consultation on the final design of the scheme.
Minister for Climate Change and Energy Chris Bowen said the Government’s policies were designed to protect Australians from global energy disruptions.
“We’ve been acting to shield Australians from global energy shocks by investing in reliable, sovereign renewables and keeping more of the gas we need onshore,” Bowen said.
“Our sensible, practical policies mean we will avoid gas shortfalls and will be able to protect consumers from global energy price spikes.”
Minister for Resources Madeleine King said the reservation policy would support both domestic consumers and the gas industry.
“The domestic gas reservation is a great outcome for Australians, as it will put downward pressure on domestic gas prices and ensure Australia will remain a trusted and reliable supplier of LNG to our export partners,” King said.
“The reservation also gives industry the certainty it needs to ensure ongoing investment into Australia’s gas industry.”
Minister for Industry and Innovation Tim Ayres said affordable gas remained important for local manufacturing and industrial capability.
“A Future Made in Australia is about securing Australia’s industrial capability – and secure and affordable gas is critical to strong local manufacturing firms,” Ayres said.
“Gas isn’t just an energy source for heavy industry – it can also be a feedstock – and putting downwards pressure on price through the reservation is particularly important for those facilities.”
The government said existing export contracts entered into before 22 December 2025 would be respected, allowing exporters to continue meeting current international commitments.
It also said Australia remained committed to being a reliable energy supplier in the region, noting gas exports were important to securing future supplies of petrol, diesel and fertiliser.
