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Australia’s emissions reduction commitments are being undermined by continued subsidies for fossil fuel usage. The fossil fuel industry continues to receive billions of dollars in government subsidies for fuel and diesel use, despite generating substantial profits and contributing relatively little in public revenue. The government needs to rapidly phase out fossil fuel subsidies and redirect this spending towards renewable energy and climate resilience, to align with net zero and limit warming to 1.5°C. |
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Background and context Fossil fuel subsidies remain a significant barrier to effective climate action in Australia. Fossil fuel subsidies cost state and federal governments a total of $16.3 billion in FY2025-2026, an increase of 9.4% from the previous year. This public funding subsidised companies to produce and use coal, gas, and especial oil - mostly in the form of diesel - at a rate of $31,020 each minute. In the long term, fossil fuel subsidies are estimated to be about 14 times higher than the cost of Australia’s Disaster Ready Fund, the government’s flagship initiative for disaster resilience and risk reduction - meaning the government spends significantly more on subsidising fossil fuels than on helping Australian communities prepare for and recover from the impacts of climate change. The vast majority of this supports fossil fuel production and consumption: $10.8 billion of public funding is spent through mechanisms like the Fuel Tax Credit scheme, which is described as the most costly anti-climate policy in Australia. This scheme provides businesses with a credit for the tax included in the price of fuel, making it cheaper for major industries, including the fossil fuel mining industry, to continue using diesel and petrol. Spending on this scheme outstrips nearly all of our social services including disability assistance, child care, and aged care. However there are also a multitude of ways in which the government provides financial assistance to the fossil fuel industry through upgrading fossil fuel industry infrastructure like roads, ports, and railway lines; funding fossil fuel exploration; and owning and operating mines, gas fields and power stations. Examples of federal spending include the $173 million infrastructure project to support road upgrades for the gas industry to access the Beetaloo Basin in the Northern territory, and $15 million to Beetaloo Energy Australia for gas exploration under the guise of ‘research and development’ - however there is also significant spending by every state government in Australia. The most recent federal budget also includes a $10 million refinery feasibility study and $4.9 million in exploration support for offshore gas. Reform has proved both feasible and beneficial in the international arena. Indonesia’s phased removal of petrol and diesel subsidies in 2014-15 delivered USD $15 billion in fiscal savings.More recently, Italy began reforming fuel duties in 2024, bringing around €1.1 billion over five years for public transport investment. At the multilateral level, a coalition of over 48 WTO Member States has committed to advancing fossil fuel subsidy reform. These examples show reform is both politically achievable and economically advantageous. To align with net zero commitments and limit warming warning to 1.5°C, the IEA Net Zero by 2050 report makes it clear a rapid phase-out of these subsidies is required. Redirecting these subsidies towards renewable energy, low‑emission technologies, and climate resilience would accelerate Australia’s transition to a net‑zero economy while reducing fiscal risk and emissions. Why is this important?
Desired outcomes
Who to contact:
Resources
Email example: If you need some help getting started with your email, here is an example. Please don’t copy it exactly - personalise it and tailor it to the MP you are writing to. In addition, when writing to a Minister or Shadow Minister, start by saying that you’re writing to them in their role as Minister for xxxx, otherwise they will probably just forward your email to your local MP. |
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[MP name] [Member for …. or Minister for ….] Dear … [personal statement - who you are and why you care] I am writing to urge you and your government to immediately end all fossil fuel subsidies, tax breaks, and research incentives. These funds would be far better spent supporting renewable energy and accelerating Australia’s transition to net zero. 2026 analysis shows us that Australian federal and state governments will provide an estimated A$16.3 billion in fossil fuel subsidies in 2025–26. Continuing to prop up fossil fuels locks in emissions, exposes Australians to volatile energy prices, and undermines climate targets. Given what Australia and the world stand to lose from climate change, this is inexcusable. I therefore ask: Will you end all fossil fuel industry subsidies, including grants, tax breaks, project support and research and development tax credits? Will you redirect these investments to renewable energy and research that will help Australia reach net zero? I look forward to your response. Sincerely, Name Address Phone (Note: your contact details are required if you want a reply) |
2. Call your MP or Minister's office
This is a way to respond instantly to an issue and only takes a couple of minutes.
Here is a suggested script to get you started:
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Hi, my name is ….. and I’m a voter in [your electorate]. I’d like to speak to …..[name of MP] (Staffer will probably say: I’m sorry they’re not available, can I take a message?) Yes, thank you! Would you please tell them...
And ask them to ….
Thank you! |
3. Visit your MP
Nothing beats a face-to-face conversation. Email your MP’s electorate office to ask for a meeting and follow up with a phone call a few days later. Get help on how to do this under the Democracy and Governance heading on our Climate briefings webpage.
(Last updated July 2026)
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