Paid to pollute | Environment Victoria

Donate Now

Paid to pollute

Fossil fuel subsidies are one of the biggest barriers to fighting climate change. So we're leading a sustained national campaign to end fossil fuel subsidies in Australia.






What is a fossil fuel subsidy? 

A fossil fuel subsidy is any government action that lowers the cost of fossil fuel energy (coal, petroleum or gas) production or consumption or raises the price received by energy producers.

The government subsidies essentially make fossil fuels cheaper than they would otherwise be, leading to a greater use of fossil fuels than would occur with a level playing field. Fossil fuel subsidies therefore represent a significant barrier to action on climate change, both internationally and in Australia. According to Fatih Birol, Chief Economist at the International Energy Agency (IEA), eliminating these subsidies would provide half the carbon emissions savings required to keep climate change below 2 degrees. 

In its World Energy Outlook 2012, the IEA called for the phase out of fossil fuel subsidies globally concluding that “in 2011, fossil-fuel consumption subsidies worldwide are estimated to have totalled $523 billion, $111 billion higher than in 2010. By comparison, financial support to renewable energy amounted to $88 billion in 2011.”1  

An important next step for action on climate change is to stop paying companies to pollute. With the demise of the carbon price costing the government billions in lost revenue and the possible introduction of the Emissions Reduction Fund, the Federal Government has a great opportunity to plug a hole in the budget while simultaneously providing emissions reductions at zero cost to the government.

Highlighted below are four of the largest fossil fuel subsidies that should be targeted for removal in the 2014-15 Federal Budget. Cutting just these Big 4 subsidies would deliver budget savings of around $10 billion per year, while cutting other smaller federal subsidies could deliver a further $1 billion annually. Other fossil fuel subsidies also exist at the state level.

Big polluters like to argue that the measures we’re saying are subsidies are not actually subsidies. Unfortunately for them, the World Trade Organisation agrees with us.


#endfossilfuelsubsidies" data-url="//" class="twitter-share-button" href="">Share it on Twitter >


The Big 4: Australia’s most expensive, wasteful and polluting fossil fuel subsidies

1. Paying the fuel bill for big mining companies – around $2 billion a year

The average Australian pays 38 cents of tax per litre of fuel. But big mining companies operating in Australia pay just 6c a litre. Instead of paying their fair share, they get a massive tax refund costing the Australian taxpayer around $2 billion a year. 2

2. Subsiding cheaper fuel for airlines – $5 billion over four years


Australian taxpayers are funding cheap fuel for big airline companies like Qantas and Virgin. If these companies paid their own way it would literally save us billions3, and the airlines would have more incentive to be more fuel efficient, meaning less pollution.

3. Special tax treatment for big oil, coal and gas projects – more than $2 billion over the next four years


The coal, oil and gas sectors get special treatment under Australia’s tax system allowing them to depreciate their assets like drilling rigs and pipelines over a much shorter period than they are actually in use. Detailed analysis by the Australian Conservation Foundation found that this legal tax dodge for big oil, gas and coal projects is costing the rest of us billions, and it’s growing. 4

Thanks to the Paid to Pollute campaign, the Federal Government reduced this loophole at the budget in May 2013, saving Australian taxpayers $1.1 billion over the next four years, but there is still another $1 billion being lost to big polluters.


4. Handouts to Australia’s dirtiest power stations - $1 billion in 2013-14

The carbon price is an important reform that is starting the transition to a cleaner Australian economy.

However one part of the carbon price package represented a massive payday for polluters. Under the Energy Security Fund, Australia’s dirtiest power stations have been receiving around $1 billion in assistance annually.5 These payments should be scrapped to allow the carbon price to send a clear signal to companies to reduce their pollution.


Take actionDonate













1. International Energy Agency, World Energy Outlook 2012, p.69

2. ANAO Audit Report No.49 2010-11, Fuel Tax Credits Scheme, p.73.
3. Commonwealth of Australia, Treasury, Tax Expenditures Statement 2013, January 2014, p.153.
4. Australian Conservation Foundation, September 2011. Drill now, Pay Later: The growing cost of tax breaks for the oil and gas industry in Australia.
5. Value of Free Carbon Units to be issued by the Clean Energy Regulator under the Coal-fired Generation Assistance Program.



The Issue of Mine Rehabilitation Heats up in the Latrobe Valley - WIN News

23 Oct 2014


Check out the Win News story on Mine Rehabilitation in the Latrobe Valley. Featuring our Safe Climate campaigner Dr Nicholas Aberle!




Farmers question campaign to fence Victorian rivers

28 April 2014

A campaign to fence Victoria's 17,000km of public riverside land has been questioned by the Victorian Farmers Federation, who said fencing should not be mandatory.

As part of the '...


Latrobe Valley brown coal plant mothballed

30 July 2014
Tom Arup, SMH


The Energy Brix brown coal power plant and briquette factory in the Latrobe Valley will be mothballed, with up 70 jobs to be made redundant as a result.

The almost 60-...


Coal-fired power station to close in Latrobe Valley, despite $50 million federal bailout

30 July 2014
Rhiana Witson, ABC

A brown coal-fired power station and briquette factory in Victoria's Latrobe Valley will close next month, two years after receiving a $...


Carbon tax repeal reaction

21 July 2014
Farrah Plummer, Latrobe Valley Express

THE Latrobe Valley's brown-coal power stations have been labelled the "biggest beneficiaries" following the repeal of the carbon tax.

Yallourn, Hazelwood and Loy...


Company scraps $230m wave power project off Victorian coast

17 July 2014

A proposed multi-million dollar wave power project off the south-western Victorian coast has been scrapped.

The company behind the plan, Ocean Power Technologies, has told US...


Ocean Power Technologies scrap wave-power project near Portland

17 July 2014
Nick Toscano, The Age

A multimillion-dollar renewable energy project expected to generate hundreds of jobs in Victoria's south-west has been dumped after the company declared it was...


Australia dumps carbon price, as repeal passes Senate

17 July 2014
Sophie Vorrath, Renew Economy

The Abbott government’s quest to abolish Australia’s carbon pricing scheme and unravel its renewable energy support mechanisms is finally complete,...


New eco hub in Frankston to raise profile of the environment

25 June 2014
Christian Tatman, Frankston Standard Leader

ENVIRONMENT Victoria has opened a new hub in Frankston to promote discussion of the environment.

Community organiser Jane Stabb said...


Frankston: Environment Victoria to launch Enviro Hub

2 June 2014
Peninsula Weekly

With the November state election looming, the soaring costs of living is set to be a key issue in Frankston.

And the focus would be on decreasing home heating bills...


From Twitter Twitter


Missed opportunities on Direct Action

posted by nicholas.aberle on Thursday, 30 October, 2014 - 00:00

Last night the Abbott government announced that it had reached a deal with Clive Palmer to legislate its ‘direct action’ policy. So four months after the repeal of the carbon price, it looks like we’ll again have a climate policy. The question is: is it any good?



VEET granted a stay of execution

posted by Mark on Thursday, 23 October, 2014 - 11:48

If you had a program that was reducing household energy costs, cutting greenhouse emissions and creating jobs, you’d think any government would be keen to keep it, right?

Wrong. The Napthine government announced in May 2014 that it would wind up the successful Victorian Energy...


Introducing our new Campaigns Director, Alex White

posted by markwakeham on Monday, 1 September, 2014 - 18:24

Our new Campaigns Director, Alex White, starts today. Here's what he has to say about why he came to Environment Victoria.

Back in 2012, I spent three months working on the Obama campaign in Boston and New Hampshire. The locals, as well as being bemused by my hard-to-understand...


100 Days countdown: The hot environment issues this election.

posted by Mark on Thursday, 21 August, 2014 - 18:04

On 29 November Victorians will head to the polls to cast judgement on the Napthine Government. With just 100 days to go until polling day Environment Victoria CEO Mark Wakeham takes a looks at the hot environment issues this state election.

The Baillieu-led Coalition took office in...


Victorian govt failing workers in traditional and emerging industries

posted by Mark on Tuesday, 5 August, 2014 - 17:31

Last Friday the pot lines at Alcoa’s Point Henry aluminium smelter near Geelong were switched off. In coming months up to 800 workers will be seeking new employment. On Wednesday the owners of the Energy Brix power station and briquette factory near Morwell, built in 1949, announced that...


From Flickr Flickr

Nothing to see here. Keep on moving...

  Environment Victoria's 2014 Election Campaign Wrap For over two years, volunteers with Environment Victoria (perhaps you are one of them!) worked deeply in four key marginal seats to talk with voters about climate change and the environment.  Our mission was to put the environment and...

Thanks to the generous contributions of our amazing supporters, our new billboard is live on the Nepean Highway, Bentleigh - gateway to four electorates crucial to this state election. Every day this month, it'll be seen by 100,000 people. Four out of five Victorians support clean, renewable...

Our Community Counts Rally - Jane Stabb's speech On Sunday 6 July, 25,000 Victorians braved the cold yesterday to speak out against a Budget that cuts key programs for our climate and environment, while continuing to support big polluters. Environment Victoria's Community Organiser Jane Stabb...

Frankston Enviro Hub Grand Opening On Thursday 5 June, Environment Victoria launched the Frankston Enviro Hub - our brand new 2014 State Election HQ. The Enviro Hub is a place where local groups can get together and share ideas and where people can wander in for information to find out how they...

Quick, clean energy jobs for Victoria With jobs looming as a major state election issue, and growing concerns about the social and environmental cost of fossil fuels, what are the options for quickly boosting employment in Victoria in the renewable energy industry? What sort of jobs could be...

Hazelwood fire update from Morwell On 25 February Environment Victoria's Acting CEO Mark Wakeham visited Morwell to meet with concerned residents affected by the Hazelwood coal mine fire. This update was filmed outside homes just 600m from the burning coal pit. Hazelwood power station can be seen...

  (function(d, s, id) (document, 'script', 'facebook-jssdk'));Help us build a force to Reclaim Victoria's Environment! Environment Victoria has an amazing community of volunteers working together to Reclaim Victoria's Environment. Want to become a part of it? In this election year we'll need...

  (function(d, s, id) (document, 'script', 'facebook-jssdk'));Help us build a force to Reclaim Victoria's Environment! Environment Victoria has an amazing community of volunteers working together to Reclaim Victoria's Environment. Want to become a part of it? We'll need all the help we can...

Nothing to see here. Keep on moving...

More Green Action people like you:

Nothing to see here. Keep on moving...

© 2015 Environment Victoria