When we think of big fossil-fuel-producing nations, it's usually Iraq, Saudi Arabia, Iran, and maybe Venezuela that spring to mind — but a new report places Australia near the very top of that list.

Key points: Only Russia and Saudi Arabia rank ahead of Australia for fossil fuel export emissions

Only Russia and Saudi Arabia rank ahead of Australia for fossil fuel export emissions The Australia Institute says Australia should account for its export emissions footprint

The Australia Institute says Australia should account for its export emissions footprint Hydrogen represents a possible future clean export energy for Australia

The analysis, released on Monday by public policy think tank the Australia Institute, measures fossil fuel exports according to their carbon dioxide-emissions potential.

It ranks Australia as the world's third-biggest exporter behind only Russia and Saudi Arabia.

In other words, when Australian fossil fuels — primarily coal — are burned overseas, the amount of carbon dioxide they produce is higher than the exported emissions of nearly all the world's biggest oil- and gas-producing nations, like Iraq and Kuwait.

Australia mines about 57 tonnes of CO2 potential per person each year, about 10 times the global average, and exports 7 per cent of the world's fossil fuel CO2 potential, the report found.

Australia is the biggest coal exporter in the world, and export emissions should be counted toward our overall emissions footprint, according to the Climate and Energy Director at the Australia Institute, Richie Merzian.

"Australia should be factoring this in, in how we consider our climate change responsibilities," Mr Merzian said.

"If Australia takes up the Galilee Basin, fracks, accesses the Great Australian Bight, it will continue to push Australia down a dangerous path."

The reason Australia's CO2 exports are so high is that we primarily export coal, which emits high amounts of CO2 per unit of energy production, compared to oil and gas.

The figures the report is based on come from the International Energy Agency's (IEA) standardised energy units for crude oil, refined oil, natural gas and coal, expressed as kilotonnes of oil equivalent (ktoe).

These are combined with IPCC data which gives CO2 emissions per energy unit for each fuel type, expressed as kilograms of CO2 per terajoule.

Australia is the world's biggest net exporter of coal. ( Getty Images )

The report comes days after Australia stymied efforts by small island states to get Pacific-wide consensus on their declaration for stronger action on climate change.

Australia moved to water down language referring to a climate "crisis" and objected to the call for revisions to emissions reduction targets, and the phasing out of coal use.

Do Australian exports fuel clean energy transition?

But CO2 emissions from Australian fossil fuel exports aren't so black and white, according to the Australian Petroleum Production and Exploration Association (APPEA).

Australian fossil fuel exports, namely gas, are helping to reduce worldwide CO2 emissions, according to APPEA CEO Andrew McConville.

"Natural gas plays a key role in reducing global emissions and in assisting export customers in moving to a lower carbon future," he said.

"If Australia was to stop producing natural gas, our Asian customers would use other sources of energy including traditional fuels that have much higher associated emissions.

"Climate change is a global issue, and the Australian oil and gas industry is playing a key role in reducing global emissions."

Mr Merzian said research from the Australia Institute didn't back that up.

"Oftentimes our gas is being used to meet new generation or it's being used to change from low-emission to high-emission fuels," he said.

"A prime example of that is Japan, that went from nuclear after Fukushima to huge investments in gas."

Australia needs to be helping other nations move to cleaner energy, Mr Merzian said. ( ABC News: Khama Reid )

But Federal Energy Minister Angus Taylor also claimed Australian fossil fuel exports were helping bring down global emissions in a statement in June, following the publication of Australia's latest quarterly emissions figures.

The figures again showed an increase in Australia's quarterly emissions, with fugitive emissions from the LNG sector being partly to blame.

Mr Taylor's statement reiterated claims that Australia's LNG exports were helping to bring down emissions in developing nations:

"Australia's total LNG exports are estimated to have the potential to lower emissions in importing countries by around 148 [megatonnes of CO2 equivalent] in 2018, if they displace coal consumption in those countries."

But that claim is "silly" and relies on false assumptions according to Frank Jotzo, director of the Centre for Climate Economics and Policy at ANU.

"The assumption that every unit of Australia's exported gas replaces coal is silly. The claim of a 148 Mt saving is wrong and unfounded," Professor Jotzo wrote in the Conversation.

"For the most part, exported gas probably displaces natural gas that would otherwise be produced elsewhere, leaving overall emissions roughly the same."

While it is possible that Australian gas exports are being used as some regions move away from coal, this is obviously not the whole story according to Gus Nathan, the director of the Centre for Energy Technology at the University of Adelaide.

Professor Nathan said Australia needs to be focussing on developing exportable clean energy for the future.

"We know that we can expect demand for carbon-based products to decline whether we like it or not, and we definitely need to be building pathways to be exporting clean energies like hydrogen at scale.

"There is big potential for Australia to be transforming to hydrogen as an export but to do that would take a lot of time."

Clean energy transition is a 'chicken and egg' scenario

How renewable hydrogen is produced. ( Supplied: Renewable Hydrogen )

The question of how much time it will take to transition to low-emissions energy sources, like hydrogen, goes around in a circle, Professor Nathan said.

The more we invest in a technology, the better we get at making it, the cheaper it becomes, and the more demand for it grows.

"Everything is coupled," he said. "In the early days technologies need to be subsidised to allow them to grow to that critical mass.

"But it's a chicken and egg — as the market grows we make more, then we learn how to do it cheaper and so the market grows — it's a cyclical process."

Australia could be exporting around $1.7 billion worth of hydrogen each year by 2030, according to a 2018 report from Chief Scientist Alan Finkel.

And our key markets are Japan, China, and South Korea.

Japan is expected to make big investments in hydrogen as it seeks alternatives to nuclear power.

But whatever energy mix we use and export, it needs to be based on a principle of getting emissions down, according to Professor Nathan.

"It's not as simple as 'coal is bad, wind and solar are good'. But it does mean that yes, there will be a shift away from coal — and LNG may be a stop along that route," he said.

"We definitely need to have in mind carbon reduction as the aim and we need to be doing it a way that is most cost effective in an international market."