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• Direct and indirect effects of sectors on net energy consumption are analysed. • Level effect is identified as the major driver for increasing energy consumption. • Manufacturing has the largest energy consumption reduction potential. • How to decrease net energy consumption has been offered to policy-makers. This paper provides a comprehensive analysis of Australian net energy consumption between 2004–05 and 2014–15. Results from environmentally-extended input-output (EEIO) analysis show that the Transport sector has the largest direct effect on net energy consumption in industrial sectors, which decreased by about 35% for net energy consumption per million $AUD in the period. The Export sector has the largest direct net energy consumption while Households consumption results in the largest net energy consumption embodied in different categories of Final demand. The structural decomposition analysis (SDA) decomposes the change of net energy consumption into five drivers, in which net energy intensity mainly reduces Australian net energy consumption by about 8000 Petajoules, while the level effect of Final demand increases it by about 10,000 Petajoules. Analysis of forward and backward linkages highlights the Manufacturing sector as the key industrial sector with the largest energy consumption reduction potential via minor changes in its input and Final demand. This indicates that more attention should be given to the reduction of energy demand from the consumption patterns of Households consumption, the improvement of energy intensity, and the application of cleaner technologies in the Transport and Manufacturing sectors. The Australian Environmental-Economic Accounts is combined with Australian input-output tables to construct the EEIO tables for net energy consumption. The combination of economic and environmental data sets provides a depth of understanding their potential to inform environmental policy decisions. The novelty of the research is the combination of economic and energy data sets, the application of EEIO model, the implementation of the additive SDA method, and the use of forward and backward linkages for the Australian energy system. [ABSTRACT FROM AUTHOR]