Published On: December 6th, 2023
At COP28 in the United Arab Emirates, the Albanese government signed onto the Clean Energy Transition Partnership, committing to phase out international public finance for fossil fuel projects within 12 months. This marks a formalisation of the government’s pledge to stop supporting coal, oil, and gas expansion abroad through bodies like Export Finance Australia.
While activists praised this as “a long overdue step” towards reducing fossil fuel financing globally, it also renewed calls to examine the billions provided annually to Australia’s local fossil fuel production through domestic subsidies. Between 2009 and 2020, Australia spent $1.7 billion on overseas fossil fuel developments, compared to just $20 million on renewables.
Fossil Fuel Subsidies Australia 2023
The announcement prompted questions about whether Australia would follow this offshore decision by reconsidering its sizable local fossil fuel subsidies. How much does Australia spend on fossil fuel subsidies? According to the Australian Conservation Foundation, last year’s federal budget allocated over $50 billion for the fossil fuel industry over the next four years. This includes $41 billion for a fuel tax rebate for off-road vehicles. With “Australia and finance for fossil fuels” still flowing thick and fast domestically, environmental groups are urging the government to match its international climate leadership with actions at home.
Australia Fossil Fuel Industry and Controversies
The commitment to terminate international coal and gas financing demonstrates Australia is “being taken seriously on climate change,” according to Climate Change and Energy Minister Chris Bowen.
However, many Australian climate activists argue that aligning Australia’s domestic fossil fuel policy with this position. They add that continuing to underwrite fossil fuels at home undermines global efforts to transition away from these sources. As climate talks in the Emirates aim to strengthen global emissions reduction commitments, there is mounting pressure on the Albanese government to end billions in annual fossil fuel subsidies and cease approving projects like Woodside’s proposed Burrup hub.
The Albanese administration has said fossil fuel phase-outs could be achieved through adequately constructed language at COP28. However, China and Africa continued expressing discomfort with using the term “phase out.”
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