Australia's state of Victoria has released the Water Sector Emissions Transition Plan, a structured framework guiding its 18 water corporations toward net-zero greenhouse gas emissions by 2035. Backed by a ministerial directive under the Water Industry Act 1994, it offers one of the most detailed and legally grounded decarbonisation roadmaps yet produced by a sub-national water sector.
"By creating the right environment for research and piloting new technologies, we can unlock breakthroughs that make water services more resilient and cost efficient," said the Hon. Gayle Tierney MP, Minister for Water.
Victoria's 18 water corporations have already cut greenhouse gas emissions by 45.5% and now source 100% of their electricity from renewable energy
Milestones already achieved
In 2025 the sector reached two simultaneous milestones: a 45.5% net reduction in emissions against its baseline — the average annual emissions recorded across the sector between 2011 and 2016, which totalled 876,428 tonnes of CO₂-e per year — surpassing the legally required 42.4%, and achievement of its 100% renewable electricity target, with all 18 corporations now sourcing their electricity entirely from renewable energy through on-site generation and supply contracts. Emissions had in fact risen above the baseline before the transition took hold, peaking at 972,441 tonnes of CO₂-e in 2019/20, meaning the real reduction since the sector's highest point is even greater than the baseline percentages suggest. Total emissions stood at 477,639 tonnes of CO₂-e in 2024/25, the equivalent of removing around 146,000 cars from the road annually. These reductions have been delivered without any impact on service reliability or customer affordability — and in many cases have actively lowered costs, as on-site renewable generation reduces exposure to grid electricity prices.
The hard work ahead
With electricity-related emissions effectively resolved, the sector now faces the challenge shared by water utilities globally. More than 90% of remaining direct emissions are methane (72%) and nitrous oxide (19%), released during the biological treatment of wastewater. These process-level emissions cannot be addressed through a fuel switch or solar installation, and vary significantly between plants depending on design, wastewater composition and weather. Transport fuels — particularly diesel used in heavy vehicles, machinery and generators — represent the second largest source of direct emissions, with electric alternatives not yet available for all asset types.
The sector's binding targets make the scale of the task clear: a 93.7% collective reduction by 2030 and full net zero by 2035, with individual targets set for each corporation under the Statement of Obligations (Emission Reduction).
Victoria's net-zero model is one to watch: legally binding, adaptable, and framed as a platform for clean technology investment, resource recovery and regional development
Four priorities, 18 actions
The plan addresses the path to net zero through four priorities and 18 specific actions, sequenced across short, medium and long-term horizons.
- Priority 1: Make the right decisions at the right time. Embeds emissions valuation into infrastructure decision-making and requires water corporations to prepare adaptive long-term emission reduction plans. Melbourne Water has committed to asset-scale plans for its Eastern and Western Treatment Plants — which together produce nearly 70% of the sector's direct emissions — by 2027, and will pilot climate-risk disclosure aligned with new Australian accounting standards from the 2027/28 financial year. Carbon offsets serve as a bridging mechanism while direct solutions mature, with offset projects designed to deliver ecological and cultural co-benefits alongside carbon abatement — Barwon Water, for example, is restoring more than 320 hectares of previously cleared native forest in the Otways in partnership with Eastern Maar Aboriginal Corporation's Country Guardians team. The emissions reduction framework itself will also be strengthened and streamlined to align with Australian government reporting standards.
- Priority 2: Build critical skills, knowledge and expertise. Addresses the knowledge and capability gaps the sector must close to tackle its hardest emissions. A sector-wide skills assessment will identify needs in areas including emissions monitoring, advanced treatment technologies and resource recovery. Direct monitoring trials for methane and nitrous oxide will be conducted at five wastewater plants across Melbourne, and a dedicated study will examine sewer network emissions — with potential extension to other poorly understood sources such as dams and reservoirs. The review of pathways to decarbonise heavy vehicles, machinery and generators is a significant action under this priority: electric alternatives are not yet available for all asset types, and renewable fuels such as hydrogen, renewable diesel and ammonia are being assessed. Barwon Water is already leading Victoria's first trial of a hydrogen-powered prime mover for biosolids transport, fuelled at Australia's first publicly accessible commercial hydrogen refuelling station in Geelong, which produces renewable hydrogen using recycled water from Barwon Water's own Northern Water Plant.
- Priority 3: Catalyse innovation and capture new opportunities. Harnesses Victoria's strengths in science and engineering to trial low-carbon and circular strategies for the sector's most challenging emissions. Thermal treatment technologies such as pyrolysis are being trialled to convert biosolids into biochar and other valuable materials while destroying contaminants including PFAS — RMIT University, South East Water, Greater Western Water and Intelligent Water Networks have collaborated for eight years on the PYROCO technology, with a larger demonstration plant now being scaled up. North East Water's Wodonga plant upgrade will capture methane as biogas and integrate with Australia's largest hydrogen electrolyser to produce renewable hydrogen for the local gas network. Scope 3 supply chain emissions are addressed for the first time, with corporations beginning to map and reduce indirect emissions from construction materials, chemicals and procurement. Yarra Valley Water has set a voluntary target of a 67% reduction in scope 3 emissions by 2030, introduced a carbon-in-construction tool, and is collaborating with suppliers on lower-carbon materials. Barwon Water, North East Water and Yarra Valley Water jointly developed a low-carbon concrete alternatives guide applicable across the concrete-intensive water infrastructure sector.
- Priority 4: Strengthen partnerships, track progress and measure success. Cements accountability through annual public reporting at both corporation and sector level, with the plan itself subject to regular review as new evidence and technologies emerge. Partnerships with First Nations Peoples, catchment management authorities and industry bodies are formalised as part of delivery. The international dimension is also explicit: Melbourne Water, Denmark's Aarhus Vand, the UK's Severn Trent and Italy's Gruppo CAP have formed an alliance to share knowledge, develop new international emissions reporting standards, and co-create technologies for wastewater treatment decarbonisation — bringing global lessons to bear on Victoria's specific challenges.
A legal framework and a global signal
The Statement of Obligations (Emission Reduction) is the legal foundation of the entire initiative. Issued under the Water Industry Act 1994, it assigns binding, individually tailored emissions targets to each of Victoria's 18 corporations, making net zero a legal obligation rather than a policy aspiration. For eight corporations the 2030 target is already zero. These obligations place Victoria alongside what the plan describes as world leaders in water sector emissions reduction — the United Kingdom, Finland and Denmark — and on track to become the first Australian jurisdiction to deliver a net-zero water sector.
For utilities and policymakers internationally, the model is instructive: legally binding targets with five-yearly checkpoints, adaptive planning that avoids premature technology lock-in, and a transition framed not only as an emissions challenge but as a platform for clean technology investment, resource recovery and regional development. The global water sector increasingly recognises that net zero cannot be achieved through renewable electricity sourcing alone. Victoria has drawn the next part of the map.
