Federal fossil supports grows to $10.5 in FY22 as own party rules ARENA changes illegal


ARENA changes disallowed

Commonwealth Minister for Energy and Emissions Reductions Angus Taylor’s attempts to change the remit of the Australian Renewable Energy Agency (ARENA) to allow it to fund fossil fuel and carbon capture and storage technologies was on Monday disallowed by a committee led by a member of his own party.

The standing committee led by the (now outgoing) Liberal Concetta Fierravanti-Wells found the agency, as the name suggests, exists to fund renewable energy projects exclusively. 

This is the second time Taylor’s proposed changes have been blocked, with the senate knocking them back in June last year after Labor, the Greens and independent senators Rex Patrick, Stirling Griff and Jacqui Lambie all voted against them.

Angus Taylor announces the environmental approval for the Hunter Power Project gas generator.

Image: Angus Taylor

“It’s a wonderful win for the renewable energy industry,” Wayne Smith, the Smart Energy Council’s government relations manager said.

With the federal budget set to be released tonight, Smith questioned what impact the ruling could have. His colleague, Smart Energy Council CEO John Grimes, claimed the Morrison government has “acted as if” the changes were law, announcing a list of fossil and carbon capture projects it would fund via ARENA. “Presumably those things are not going to happen,” he said.

The Morrison government has said it will continue to try to pass the changes to expand ARENA’s funding scope.

Federal fossil fuel subsidies accelerate

Tellingly, thinktank the Australia Institute released analysis on the same day which found the Morrison government had last year increased its already enormous subsidies for fossil fuels.

In total, Australian taxpayers forked out $11.6 billion in fossil fuel subsidies in 2021-22, the equivalent to $22,139 per minute. Of this, $10.5 billion came from the federal government, over 90%. 

Those subsidies went up 12% in 2021-2022, compared with the previous year, amounting to an additional $1.3 billion following the Black Summer bushfires. Fossil fuels subsidies now amount to more than 56 times the budget of the National Recovery and Resilience Agency.

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, which was $4.8 billion in December 2021.

The largest subsidy came via the federal Fuel Tax Credits Scheme.

“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,” Rod Campbell, Research Director at the Australia Institute, said.

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