Australian fossil fuel subsidies surge to $11.6 billion in 2021-22


Fossil fuel subsidies cost Australians a staggering $11.6 billion in 2021-22, an increase of $1.3 billion in the last year, according to new Australia Institute research.

The total value of future fossil fuel subsidies already committed in Federal, state and territory budgets is $55.3 billion – more than 10 times the balance of Australia’s Emergency Response Fund ($4.8 billion in Dec 2021), while $11.6 billion is 56 times the budget of the National Recovery and Resilience Agency.

Key Findings

  • Fossil fuel subsidies cost $11.6 billion in 2021-22 across all federal, state and territory governments, equivalent to $22,139 per minute.
  • This marks a $1.3 billion (12%) increase on the 2020-21 total of $10.3 billion. States and territories actually reduced subsidies by $214 million but this was outweighed by a $1.4 billion increase from the Federal Government.
  • The total value already committed in federal, state and territory budgets is $55.3 billion, which is 11 times the balance of Australia’s Emergency Response Fund ($4.8 billion in Dec 2021), while $11.6 billion in 2021-22 is 56 times the budget of the National Recovery and Resilience Agency.
  • Fossil fuel subsidies cost the Federal Government $10.5 billion in 2021-22, $1.4 billion more than 2020-21.
  • These subsidies cost the Federal Government more than it spent on public schools in the same year ($9.7 billion).
  • The largest subsidy is the federal Fuel Tax Credits Scheme, at $8.07 billion, which exceeds the $7.5 billion spent on the Australian Army.
  • Tax credits aside, Federal Government fossil fuel subsidies increased four-fold to $1.16 billion, from $266 million in 2020-21.

“It is perverse that Australian governments continue to subsidise fossil fuel production and consumption while communities across the country are bearing the costs of disasters exacerbated by fossil fuel use,” said Rod Campbell, Research Director at the Australia Institute.

“This is bad economics and even worse climate policy. We are witnessing Australia’s flood-stricken communities trying to pick up the pieces while fossil fuel interests are cashing in the tune of over $22,000 a minute.

“Worse still, these subsidies are growing and show no sign of slowing down. It is the Federal Government driving increases in fossil fuel subsidies, with $6.7 billion worth of new measures committed since the 2019 election.

“The big increases are not hidden, but are central government policies such as the ‘gas-fired recovery’ and more money for ever-failing technologies like carbon capture and storage.

“It is long past time for these irresponsible budget measures to be reversed and these resources directed to combating climate change and preparing Australians for its consequences,” Mr Campbell said.

Examples of fossil fuel subsidies in federal, state and territory budgets:


  • Building the Kurri Kurri Gas-fired power station ($200 million).
  • Concessional finance for Olive Downs coal mine ($175 million).
  • Road construction for fracking in the Northern Territory ($173 million).
  • Capital investment in Hunter Valley coal railway network ($161 million).


  • $50 million to upgrade rail lines given “interest in developing substantial coal deposits in the Northern Galilee Basin”.
  • $50 million for the Meandu coal mine that feeds state-owned coal-fired power stations.
  • $72.5 million allocated to upgrading Callide and Kogan Creek coal-fired power stations.

Northern Territory

  • $2.8 billion committed to gas purchases for loss-making Power and Water Corporation.
  • $720 million committed to gas transport.
  • A $400 million ship lift partly to service the oil and gas industry.

Western Australia

  • $571 million has been allocated to building or upgrading gas and coal-fired power stations, with $59.5 million to be spent in 2021-22.
  • Another $500,000 to Chevron’s Gorgon CCS project, which has already received $60 million from the Federal Government and has never operated to approval requirements.
  • State-owned port authorities allocated $31 million in 2021-22 and $179 million in capital works that at least partly benefit the oil and gas sector.


  • Brown coal to hydrogen project received $13 million in state funding in 2021-22, part of $100 million committed from Victorian and Federal Governments.
  • $66 million for the program that oversees the CarbonNet CCS project, still not operational 12 years after its establishment.

New South Wales

  • $26 million for abandoned mine rehabilitation including coal mines in the Lower Hunter.
  • The Coal Innovation Fund spent $9.9 million in 2021-22 and has a balance of $70 million.

South Australia

  • $19 million in the 2021-22 budget to upgrade an oil jetty largely used by Santos, part of a total estimated cost of $57 million.


No fossil fuel subsidies identified.

Australian Capital Territory

No fossil fuel subsidies identified.

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