Australia's vast coal reserves are set to yield a bumper windfall for multinational mining giants, with taxpayer-funded diesel subsidies estimated to reach £3.2 billion (A$6.2 billion) if half of proposed new mine developments gain government approval.
The revelation comes as the Albanese administration faces growing internal pressure ahead of its national party conference next month, with over 300 Labor branches, trade unions, climate campaigners, and billionaire Andrew Forrest urging a cap on the fuel tax credit scheme. Currently, miners, farmers, and other industries are refunded 52.6 Australian cents per litre excise applied to petrol and diesel.
Treasury forecasts indicate that the scheme will cost the Australian budget £24.3 billion (A$47 billion) over four years, with annual costs projected to rise from £5.5 billion (A$10.7 billion) in 2026-27 to £6.6 billion (A$12.8 billion) by 2029-30. Coal mine operators alone are estimated to receive over £500 million (A$1 billion) annually from these credits.
Energy & Resource Insights, a consultancy linked to climate advocacy organisation the Sunrise Project, has identified 45 new coal mining developments proposed across New South Wales and Queensland. Based on environmental impact statements outlining expected diesel consumption for 22 of these projects, the consultancy calculated that coal companies could claim £3.2 billion in rebates for approximately 11.6 billion litres of diesel over the operational lives of these mines. One significant expansion, Glencore and Yancoal's Hunter Valley operations, is projected to alone reap £875 million (A$1.7 billion) in subsidies.
Georgina Woods, acting national coordinator for Lock the Gate, has criticised the scheme, arguing it rewards coal companies for diesel use, thereby reducing incentives for transitioning to cleaner vehicles and cutting emissions. She suggested that public funds would be better allocated to mitigating the costs of climate change, which impact households through rising energy bills and insurance.
Supporters of the fuel tax credit scheme, including the Minerals Council of Australia, contend that the fuel excise is intended for public road funding and should not apply to fuel used on private roads or in machinery. They argue the scheme prevents businesses from paying an unwarranted tax and is crucial for the competitiveness of regional industries reliant on diesel, such as mining and agriculture.