The Albanese government's approval of new coal mining projects is facing a backlash, with a recent report revealing a potential windfall for coal companies through diesel subsidies. The Labor government's decision to greenlight these developments could result in a staggering $6.2 billion in taxpayer refunds for coal companies, according to an analysis by the activist group Lock the Gate. This figure highlights the potential financial burden on the public purse and the environmental implications of continued coal mining.
The report's findings come as a surprise, especially given the government's internal campaign to wind back fuel tax credits for multinational miners. Over 300 Labor branches have joined the call to cap the scheme, which refunds miners, farmers, and other industries for the excise tax on petrol and diesel. The scheme is projected to cost the budget a staggering $47 billion over the next four years, with coalmine operators receiving over $1 billion annually.
The analysis by Energy & Resource Insights, a consultancy linked to the climate advocacy organization Sunrise Project, focused on 45 proposed coal mining developments in New South Wales and Queensland. Of these, 22 had environmental impact statements detailing expected diesel consumption. The consultancy estimated that coal companies could receive $6.2 billion in rebates on 11.6 billion litres of diesel used over their operational lives, with one expansion alone, Glencore and Yancoal's Hunter Valley operations, potentially reaping $1.7 billion.
The implications of this are far-reaching. Lock the Gate's acting national coordinator, Georgina Woods, argues that the fuel tax credits scheme is effectively rewarding coal companies for using diesel, reducing the incentive to transition to cleaner vehicles. This subsidy, she claims, is better spent on mitigating the costs of climate change, which are already burdening households and businesses. The pollution from mining and burning coal is contributing to rising disaster costs across the country, with potential annual damage bills reaching over $40 billion in the next 25 years.
The scheme's impact on the environment and public finances is a cause for concern. Mining vehicles consume a significant portion of Australia's diesel, and the fuel tax credit scheme provides a financial incentive for coal companies to continue using diesel, despite its environmental impact. This raises questions about the government's commitment to decarbonization and the effectiveness of the safeguard mechanism, which aims to encourage the use of cleaner technology.
The situation is further complicated by the actions of companies like BHP, which have been purchasing diesel trucks for their Pilbara mines despite internal documents acknowledging the misalignment with decarbonization goals. BHP received an estimated $622 million in fuel tax credits in the 2025 financial year, highlighting the potential for abuse of the system.
The push to cap the fuel tax credit scheme at $50 million per company, as proposed by the Labor Environment Action Network (Lean), has gained support from Labor branches. This proposal targets big miners while excluding farmers and small businesses. However, the government remains steadfast in its current position, with Resources Minister Madeleine King insisting that no changes are being considered.
The Albanese government's approval of coal developments since its election in 2022 adds to the controversy. With the potential for billions in taxpayer subsidies to coal companies, the government's stance on fuel tax credits, and the environmental impact of these projects, the debate over the future of coal mining in Australia continues to rage.
