Coal companies could gain billions more in diesel subsidies as Labor faces internal pressure
If the Australian government approves half of the proposed coal mine developments, coal companies could receive an additional A$6.2 billion in tax refunds for diesel use, according to an analysis by activist group Lock the Gate.
Coal companies could receive an extra A$6.2 billion in taxpayer refunds for the diesel they use if the Albanese government greenlights just half of the mine developments currently under consideration, according to an analysis released by activist group Lock the Gate. The finding comes as the government faces an internal campaign ahead of next month's Labor Party national conference to commit to winding back a fuel tax credit scheme for multinational miners.
More than 300 Labor Party branches have joined unions, climate campaigners and mining billionaire Andrew Forrest in calling on the government to cap the scheme, which refunds miners, farmers and other industries the 52.6 cents per liter excise applied to petrol and diesel. Treasury last month forecast the scheme would cost the budget A$47 billion over the next four years, rising from A$10.7 billion in 2026–27 to A$12.8 billion in 2029–30. More than A$1 billion a year goes to coal mine operators.
Energy & Resource Insights, a consultancy created by the climate advocacy organization Sunrise Project, said another 45 coal mining developments were proposed in New South Wales and Queensland. Of these, 22 had environmental impact statements that outlined expected diesel consumption. Based on that data, the consultancy estimated coal companies could receive A$6.2 billion in rebates on 11.6 billion liters of diesel used over their operational lives. One expansion alone—Glencore and Yancoal's Hunter Valley operations expansion, the largest coal project ever proposed in New South Wales—could reap A$1.7 billion.
Lock the Gate's acting national coordinator, Georgina Woods, said the fuel tax credit scheme was rewarding coal companies with billions of dollars for using diesel, reducing the incentive to shift to clean vehicles to cut emissions. She said it meant companies were “effectively claiming a public subsidy to expand coal mining” and that the money would be “much better spent on easing the costs of climate change.” The scheme's supporters argue that the fuel excise is collected to fund public roads and should not be paid on diesel and petrol used elsewhere. The Minerals Council of Australia says the scheme stops businesses “from paying a tax they don’t owe” and is critical to competitiveness.
Nearly 320 Labor branches have backed a push by the party's conservation arm, the Labor Environment Action Network (Lean), to cap the rebate at A$50 million per company—a model that would target big miners but exclude farmers and small businesses. The government is holding firm for now, with Resources Minister Madeleine King insisting last month that no changes are being considered. The Albanese government has approved 15 coal developments, mostly mine expansions, since its election in 2022.
