Australia’s federal government has announced a landmark domestic gas reservation policy that will require liquefied natural gas exporters on the populous east coast to set aside between fifteen and twenty-five per cent of their production for domestic users once the scheme is fully implemented in two thousand twenty-seven.

The initiative, unveiled by Climate Change and Energy Minister Chris Bowen, is designed to ensure that households, manufacturers and electricity generators have access to affordable and reliable gas amid forecasts of tightening supply and persistently high prices that have afflicted the local market.

The reservation requirement, to be phased in after a period of industry consultation, reflects long-standing concerns that export volumes have outpaced domestic availability, particularly as legacy production fields near southern consumption centres decline.

Under the new policy framework, which takes effect for new contracts and export permits from the announcement date, major producers will be obliged to prioritise local demand before liquefied natural gas is exported.

Government officials have framed the measure as essential to addressing an expected east coast gas shortfall by the late two thousand twenties and to exert ‘‘downward pressure’’ on domestic prices.

While existing contracts will be honoured, the percentage of reserved gas — estimated to amount to roughly two hundred to three hundred fifty petajoules annually — will be determined through ongoing consultations with industry stakeholders, consumer groups and state governments throughout two thousand twenty-six.

The policy has elicited a mixed response from industry and political actors.

Manufacturing organisations and heavy industry have welcomed the commitment to boosting local supplies, arguing that stable and competitive energy costs are critical to economic competitiveness.

In contrast, some energy producers and analysts have cautioned that binding reservation requirements could distort markets, slow investment in new gas projects and create uncertainty for long-term export commitments.

Energy market regulators have also highlighted the need for complementary reforms to improve infrastructure, pricing transparency and supply planning to ensure the smooth functioning of both the domestic and export gas markets.

The reservation scheme marks a significant shift in Australia’s approach to managing its energy resources on the east coast, aligning with similar, long-standing policies in Western Australia while addressing the unique structure and demands of the larger eastern seaboard market.

Government sources say the policy underscores a broader ambition to balance Australia’s role as a major exporter with securing affordable energy for its own population during a period of global energy volatility and domestic transition to lower-carbon fuel sources.