Today in Budget Estimates, Abigail grilled the Minister for Climate Change, Energy and the Environment on why NSW isn't on track to meeting our targets for reducing emissions.

Watch the video here or read the exchange below.

Ms ABIGAIL BOYD: In the supplementary questions for the last budget estimates hearing, I asked the question: Has the department advised the Minister that uncontrolled data-centre growth could jeopardise NSW's legislated 2035 emissions target? The answer I got back was yes. Could you tell me when that advice was received?

The Hon. PENNY SHARPE (Minister for Climate Change, Minister for Energy, Minister for the Environment, Minister for Heritage): I would have to take it on notice. Everyone who is raising the data centre issue is asking legitimate questions that we are really grappling with and, I think, all governments are grappling with. I can take on notice exactly when they have given me advice, but it comes in a range of ways. Sometimes I am verbally briefed and sometimes I get formal advice up there. As I was saying, there are a number of things the Government is undertaking. The IDA, which is the planning and expressions of interest in terms of data centres, is really the concierge service. INSW is doing the work on the guidelines and the way that that would operate, and my department is very hooked into that.

Ms ABIGAIL BOYD: From a climate target perspective, when you received that advice, were you concerned?

The Hon. PENNY SHARPE: I am concerned about all of the ways in which we meet the targets.

Ms ABIGAIL BOYD: It seems unlikely, given the extent of the data centres being proposed at the moment plus the opening of Eraring for an additional two years, that we are anywhere near to meeting our targets for reducing emissions in the energy sector. At what point do we change tack so that we actually will meet those targets?

The Hon. PENNY SHARPE: In terms of my responsibilities, that is exactly what we are doing. We legislated the targets because we expect them to be met. We put in place a robust system of measuring whether that is happening. It is challenging. The last lot of modelling said that it is going to be challenging. There is a whole lot of work we are doing. We are doing a new Net Zero Plan and there is also government work, work in the planning system and work that the EPA is doing. I wouldn't say that we change tack. I would say that we are constantly monitoring what we need to adjust to make the targets.

Ms ABIGAIL BOYD: But you're not on track?

The Hon. PENNY SHARPE: It is challenging to meet it, yes. That's what the most recent modelling says. I think we are about 46 per cent for 2030. That's why we are continuing to do all this other work to get there.

Ms ABIGAIL BOYD: My colleague Ms Higginson asked questions before. It just seems like we are all acknowledging that these targets are probably not going to get met.

The Hon. PENNY SHARPE: I'm not prepared to throw in the towel yet, and nor should I, as the Minister.

Ms ABIGAIL BOYD: I know you're not, but if you were watching these estimates going, "That is all very nice and well, but just saying you are going to meet them doesn't mean you will meet them"—

The Hon. PENNY SHARPE: Shout-out to everyone who is watching the estimates. The point that I would make it that this is a Government commitment, and it is a serious commitment. We legislated the targets, and we'll continue to work towards that. It's just not the way in which I like to communicate and to have these conversations, to say that everything is fine and we can wave a magic wand. I want to be honest with the community and I want to be honest with Committee members that we are doing everything we can to meet those targets. But I'm not throwing in the towel yet. We've got four years to go.

Ms ABIGAIL BOYD: Noting your comments earlier that you as the climate Minister are committed to reducing emissions and that you do view it as urgent—

The Hon. PENNY SHARPE: Absolutely. Trust me, my kids don't let me leave the dinner table.

Ms ABIGAIL BOYD: I fully believe that is your view. Are you aware that some of these new data centre developments are proposing to skirt the whole energy grid capacity question by instead building their own fossil fuel power plants?

The Hon. PENNY SHARPE: I think there is a range of different options that they are putting forward, given their interest about putting them through. But, again, our planning system needs to work through that—the way in which the IDA operates and the other guidelines. Yes, I'm aware that people have a range of different ways in which they want to plug in their data centres, but the way in which the Government allows that to happen is still being worked through.

Ms ABIGAIL BOYD: Are you aware of the one that's being proposed in the Southern Highlands?

The Hon. PENNY SHARPE: There are a few down there.

Ms ABIGAIL BOYD: They want to build a 673-megawatt gas-fired power station, which would be around the same size as Kurri Kurri and would be around two million tonnes of additional CO2 each year. What is your role in making sure that those sorts of developments don't go ahead?

The Hon. PENNY SHARPE: My role is legislated targets, the advice that we have given to the IPC and planning in relation to the need to meet the targets, and for it to be a consideration through the planning process.

Ms ABIGAIL BOYD: But as energy Minister and as climate Minister, do you have any direct influence?

The Hon. PENNY SHARPE: Again, there is an independent planning system. Things go through the independent planning system and my agencies put advice in relation to concerns about that. The Government is looking at our broader data centre strategy and the way that they will interact. That is not finalised yet. There are all of those things. The short answer is yes but, directly, as me personally as the Minister, that is not the way it works. We work through my agencies. Am I concerned about energy use? Yes. Am I concerned about water use? Yes. Emissions? Yes.

Ms ABIGAIL BOYD: Are you concerned about the additional emissions?

The Hon. PENNY SHARPE: I am concerned about all of that. That is my job.

Ms ABIGAIL BOYD: How are we turning that concern into—

The Hon. PENNY SHARPE: We are doing the new strategy.

Ms ABIGAIL BOYD: —being able to assure the public that the Labor Government is taking its climate action seriously?

The Hon. PENNY SHARPE: Through the planning system and the establishment of the data centre strategy.

Ms ABIGAIL BOYD: Are you concerned, as the Minister, that we have a gas plant as big as Kurri Kurri being proposed to be established by one of these data centres?

The Hon. PENNY SHARPE: Ms Boyd, I am concerned about many issues. I am concerned about energy—

Ms ABIGAIL BOYD: That one?

The Hon. PENNY SHARPE: All of them. I am concerned about all of them. Are we taking enough action on climate change? Are we leaving the planet in a better state than it is? How long am I going to be the Minister here in this Government that is serious about tackling that and what actions can we undertake? That is what I do every day.

Ms ABIGAIL BOYD: It's not your job to be concerned, though; it's your job to take action.

The Hon. PENNY SHARPE: You just asked me if I was concerned. Yes, I am concerned, and then I take action in the way that I have told you. I work through my department. We have legislated the targets. We have the Net Zero Commission that is keeping us online. I have a whole lot of modelling that is being done that is allowing you to ask these questions, because we know that it is a challenge. We are then doing the Net Zero Plan, which is not just about government. The Government also has to meet its own targets. We have then got the work that the EPA is doing in terms of all of the highest polluting and highest emitting industries. That is actually a question that perhaps you should ask Mr Chappel. High-emitting data centres would also fall under our regime. But I'm not sure about that. I would need to check.

The Hon. PENNY SHARPE: That's how they get picked up—in their pollution licence.

Ms ABIGAIL BOYD: Staying with data centres for one more minute, I note there was a question from Ms Munro earlier around the impact on energy bills. As we know, we've got at the moment retail customers paying a disproportionate burden of network costs. I note that there was an Ausgrid report that was prepared in relation to Macquarie Park and the increased demand requirements from the five data centres being proposed there. They, in that document, have a lot to say about the increased costs. Just for Macquarie Park to set up a new subtransmission substation, we are looking at quite significant costs by 2028 to 2029 on residential as well as small to large business and industrial. That is just in that one area. I note that you were talking about doing modelling earlier, but what we're looking for is some direction rather than a passive monitoring or modelling. What are you doing to ensure that these data centres will pay—

The Hon. PENNY SHARPE: The Government is doing a data centre strategy where we expect that consumers don't have to pick up the bill for that. But that work is not finalised. It's still subject to Cabinet consideration. You will have to wait.

Ms ABIGAIL BOYD: That is $160 million in additional capital from Ausgrid.

The Hon. PENNY SHARPE: If they are approved, sure. This is exactly that work. We are doing that work. All of that is being considered. But I'm not in a position to be able to give you all of the details because it is still under consideration by the Government.

Ms ABIGAIL BOYD: But it's quite perplexing. On the one hand we have all of these statements coming out from the Treasurer saying, "These data centres are going to push up GSP. They are going to be the future of New South Wales. We are going to roll out the red carpet with the IDA and have all of this fast process." But then on the other hand we are saying, "Yes"—and I note your comments earlier that, in parallel, we have this data centre plan developing. What assurance do you have that these data centres won't be approved before your data centre plan comes out?

The Hon. PENNY SHARPE: We're working through that and that's exactly the point.

Ms ABIGAIL BOYD: You don't have one, though, do you?

The Hon. PENNY SHARPE: Sorry, I don't know what you're asking me. You're asking me to look into the future. You're saying, "Are you concerned?" Yes. "What are you doing about it?" I've just told you what we're doing about it. But you sort of want us to have made the decision yesterday and what I'm saying to you—and I'm being very honest with you—is that this is the work that we are landing across government cooperatively. The Treasurer and I are talking about this all the time. Our agencies are talking about this all the time. It's subject to a Cabinet process that will be done pretty soon.

Ms ABIGAIL BOYD: Let me be clear. If I was in your position, I would put a halt on data centre approvals until I had worked this stuff out.

The Hon. PENNY SHARPE: Well, you'd have to change the legislation to do that. That's really good. I look forward to your piece of legislation.

Ms ABIGAIL BOYD: You could also put up the legislation.

The Hon. PENNY SHARPE: You can't actually stop people from applying—

Ms ABIGAIL BOYD: Well, you can if you took a different policy setting.

The Hon. PENNY SHARPE: You can if you want to change the law but that's a matter for you. I look forward to The Greens bill on that.

Ms ABIGAIL BOYD: If you were serious about climate action—

The Hon. PENNY SHARPE: I look forward to your bill—

Read the full transcript in Hansard here.

24 February 2026