A recently published report has unveiled a stark reality for Australia: the nation is investing over four times more in fossil fuel subsidies compared to renewable energy. This alarming disparity raises critical concerns about the country’s environmental commitments as it prepares to lead negotiations at the upcoming United Nations climate summit, COP31, set to take place from November 9 to 20 in Antalya, Türkiye.
Escalating Fossil Fuel Support
The report, released by WWF-Australia, highlights that the Australian government allocates approximately A$20.1 billion (around £9.9 billion) annually to support fossil fuels, while only A$4.6 billion (about £2.3 billion) is directed towards renewable energy initiatives. This funding includes various forms of assistance such as subsidies, tax concessions, and direct expenditures at both federal and state levels.
This substantial imbalance poses a significant threat to Australia’s aspirations of becoming a global leader in renewable energy. As the country takes on the presidency of COP31—an unusual arrangement where Türkiye hosts the summit while Australia manages negotiations—the report underscores the urgency for a coherent energy strategy that aligns with climate commitments.
A Diverging Path
The report warns that Australia’s dual approach—simultaneously promoting itself as a green superpower while expanding coal and gas production—could lead to severe economic repercussions. According to analysis from Cyan Ventures, the nation could face losses of up to A$70 billion (approximately £34 billion) in fossil fuel export value by 2035 as market demand shifts towards cleaner energy sources.
Rob Law, WWF-Australia’s senior manager for energy transition, articulated the dilemma: “Australia is pulling in two directions at once. We can no longer afford to position ourselves as a renewable energy partner while simultaneously propping up and expanding fossil fuel production. This sends mixed signals to investors, undermines Australia’s credibility as a trade partner, and creates space for others to lead.”
The Environmental Impact
Australia is currently the world’s second-largest exporter of fossil fuel emissions—approximately three times the carbon released within its own borders. Alarmingly, these emissions from exported fossil fuels are largely excluded from the country’s 2035 emissions reduction targets. At the same time, Australia is experiencing one of the fastest domestic transitions to renewable energy globally, with renewables accounting for a record 46.5 per cent of electricity in the National Electricity Market during the first quarter of 2026.
However, the report suggests that demand for Australian coal and gas is already beginning to wane. In 2025, both liquefied natural gas exports and Asian LNG imports saw a decline. Projections indicate that the demand for metallurgical and thermal coal in major markets such as China, Japan, and India could decrease by about 69 per cent by 2050 under current policies. Furthermore, multiple planned LNG import terminals across Asia have been postponed or cancelled, signalling a troubling trend for Australia’s fossil fuel sector.
Calls for a Strategic Shift
While the report paints a stark picture, it also puts forth a clear directive for the Australian government: it must develop a comprehensive plan for the decline of fossil fuels, complete with timelines for transitioning away from thermal coal, metallurgical coal, and gas. There is an urgent need to accelerate the adoption of renewable and electrified energy systems, redirect subsidies, and implement regulations that prevent new coal and gas approvals that contradict transition pathways.
Despite these findings, government officials have defended their position, asserting that the LNG export sector provides essential revenue, job opportunities, and other economic benefits. Industry Minister Tim Ayres, speaking to the Newcastle Herald in May, insisted there is no contradiction in promoting renewable technologies while continuing to support coal exports.
Why it Matters
This report underscores a pivotal moment for Australia as it grapples with the dual challenges of economic dependency on fossil fuels and the pressing need for a sustainable energy future. The government’s current trajectory not only threatens its international credibility at COP31 but also risks leaving the nation behind in the rapidly evolving global green economy. With demand for fossil fuels diminishing, Australia must urgently realign its policies to prioritise renewable energy or face the consequences of falling short in a world increasingly prioritising sustainability.