Four Dollars for Fossil Fuels. One for Renewables.
- Gregory Andrews
- 1 day ago
- 3 min read
How often do we hear that renewable energy survives only because of government subsidies. Well the facts tell a very different story.
A new report by WWF-Australia has found that Australia's Federal and state governments provide around four times more financial support to fossil fuels than to renewables. They put a total of $14.9 billion into fossil fuel subsidies in 2024-25, compared with $3.5 billion for renewable energy and energy storage.
Think about that for a moment. The fuels driving climate change, worsening bushfires, bleaching our reefs and placing Australia's extraordinary wildlife under increasing pressure are receiving the lion's share of taxpayer support. Meanwhile, the industries building the clean energy system of the future are left competing for what remains.
Whenever stronger climate policies are proposed, opponents like to argue that governments should "let the market decide." But there is no free market when governments are heavily underwriting one side of the equation. Tax concessions, fuel tax credits, royalty arrangements, infrastructure spending and other government support reduce the cost of producing coal, oil and gas. These subsidies distort investment decisions, and make fossil fuels appear cheaper than they really are while slowing investment in cleaner alternatives. If Australia genuinely believed in market competition, we'd stop stacking the deck.
Paying Twice
Australians are effectively paying twice. First, we subsidise fossil fuel production through our taxes. Then we pay again through the impacts of climate change:
more intense bushfires;
longer droughts;
destructive floods;
rising insurance premiums;
damage to agriculture;
declining biodiversity;
increasing health costs from heatwaves and pollution.
These aren't theoretical future costs. They're arriving now. As a former Threatened Species Commissioner, I've seen first-hand how climate change is becoming one of the greatest threats to Australia's unique wildlife. Habitat loss is accelerating. Species are already under pressure from land clearing, invasive species and changed fire regimes are now being pushed even closer to extinction.
Renewables Are an Investment
Critics often describe renewable energy support as a cost. That's the wrong way to think about it. Renewable energy is infrastructure. Every new wind farm, solar farm, battery, pumped hydro project and transmission line builds an energy system that has no fuel costs. Once constructed, sunshine and wind are free.
Coal and gas, on the other hand, require Australians to constantly keep paying for fuel - forever. The faster we electrify transport, homes and industry using renewable energy, the less exposed Australians are to volatile international coal, oil and gas prices. That isn't just climate policy. It's good economic policy.
Time to Stop Subsidising Yesterday
Australia has some of the world's best solar and wind resources. We have world-leading engineers. We have abundant critical minerals. We have the skills to become a renewable energy superpower. What we lack is policy consistency.
If governments continue directing billions towards fossil fuels while claiming to be serious about achieving net zero, investors receive mixed signals and the transition becomes slower, more expensive and more politically difficult. Imagine what even a fraction of those fossil fuel subsidies could achieve if redirected towards:
household electrification;
community batteries;
transmission infrastructure;
electric vehicle charging;
clean manufacturing;
biodiversity restoration; and
support for regional communities managing the energy transition.
The Bottom Line
Australia's energy transition isn't being held back by technology. It isn't being held back by economics. It's being held back by political choices. Every dollar spent subsidising fossil fuels is a dollar not invested in the cleaner, safer and more prosperous Australia we know is possible. If we're serious about tackling climate change, protecting biodiversity and building a competitive economy, the first step is obvious. Stop paying to make the problem worse.
