A plan to force gas exporters to reserve 20 per cent of their product for Australian users will put downward pressure on electricity prices while shoring up supplies over the long term, Energy Minister Chris Bowen says.

Described as a “structural shift” in the nation’s gas market, the overhaul will introduce a similar policy to Western Australia’s gas reservation scheme, established more than a decade ago.

The policy, to kick in from July 2027, will bar gas companies from the often-lucrative global spot market until they can prove to the federal government they’ve properly supplied Australian consumers.

Bowen conceded the policy, which will need approval through legislation, would be divisive among industry leaders, but said it was calibrated to tackle tackle predictions of long-term shortfalls.

“This is a policy which will obviously not please everyone,” he said in Sydney on Thursday.

“Often good policy doesn’t, but it’s good policy which puts Australia’s national best interest first.

“It’s going to put downward pressure on prices and what it will also do is, to a certain degree, disconnect Australian gas from spikes in international prices.”

Export contracts signed before the government’s initial announcement of a gas reservation scheme in December 2025 will not be covered under the changes.

Manufacturing Australia, which represents a handful of big companies such as BlueScope, Dulux, Cement Australia and Tomago Aluminium, has welcomed the change, describing it as the most significant reform to the nation’s gas market in a generation.

“The federal government is backing a winner here,” chief executive Ben Eade said.

But the Greens and other advocates who’d been pushing for a 25 per cent tax on gas exports are furious, criticising the government’s decision because it fails to raise any extra revenue.

“They are saying to people, look over here. Don’t look at us, don’t ask us for what you deserve,” Greens senator Steph Hodgkins-May said in Melbourne.