Australia faces a critical crossroads in its energy policy, with a new report highlighting that government support for fossil fuels is more than four times greater than that for renewable energy sources. As the nation prepares to take the lead in upcoming negotiations at the United Nations Climate Summit, COP31, experts warn that this dual approach could jeopardise Australia’s financial future in the global energy market.
Disparity in Funding
According to the report by WWF-Australia, the Australian government allocates approximately A$20.1 billion (around £9.9 billion) annually to fossil fuel industries, compared to a mere A$4.6 billion (approximately £2.3 billion) for renewables. This funding disparity includes various forms of financial support such as subsidies, tax breaks, and direct investments at both federal and state levels.
This imbalance raises concerns about Australia’s ability to genuinely position itself as a green superpower while simultaneously maintaining a robust fossil fuel sector. The analysis cautions that the country risks losing up to A$70 billion (about £34 billion) in fossil fuel export revenues by 2035 as demand in Asia increasingly shifts towards renewable energy sources.
Leadership in Climate Talks
Australia’s role as the presidency holder at COP31, set to take place from November 9-20 in Antalya, Türkiye, adds another layer of urgency to these findings. In a unique arrangement, Türkiye hosts the conference but Australia manages the negotiations, draft texts, and the summit’s cover decision. This leadership role was secured after a competitive selection process, during which Australia positioned itself as a voice for Pacific island nations vulnerable to climate change.
Chris Bowen, Australia’s Minister for Climate Change and Energy, is set to lead these discussions. He will face the challenge of reconciling Australia’s substantial fossil fuel commitments with its ambitions for a greener future.
Competing Interests
The report argues that Australia’s approach—what it terms a ‘hedge’—is neither neutral nor wise, as both fossil fuels and renewable energy vie for the same capital and policy attention. Rob Law, senior manager for energy transition at WWF-Australia, remarked, “We can no longer afford to position ourselves as a renewable energy partner while simultaneously propping up and expanding fossil fuel production.” This mixed messaging could undermine Australia’s credibility on the global stage and diminish its attractiveness as a trade partner.
Australia remains the second-largest exporter of fossil fuel emissions globally, contributing significantly to carbon pollution through the combustion of its coal and gas overseas. Notably, these exported emissions are excluded from national reduction targets for 2035. Despite this, Australia’s domestic energy transition is advancing rapidly, with renewables accounting for a record 46.5 per cent of electricity in the National Electricity Market in the first quarter of 2026.
The Future of Energy
The report also highlights a concerning trend: demand for Australian coal and gas is already weakening. Both liquefied natural gas exports and Asian LNG imports experienced a decline in 2025, and projections suggest a significant drop in demand for metallurgical and thermal coal in key markets like China, Japan, and India over the coming decades. Several planned LNG import terminals in Asia have been put on hold or cancelled altogether.
With the highest production and liquefaction costs among major exporters, Australian LNG is at risk of losing market share to cheaper alternatives from the United States and Qatar, particularly as global demand shifts towards more sustainable energy sources.
A Call for Change
The WWF report urges the Australian government to adopt a proactive approach by establishing clear timelines for phasing out thermal coal, metallurgical coal, and gas production. It advocates for a redirection of subsidies and public financing towards accelerating the transition to renewable energy and electrified systems. Additionally, it suggests implementing a rule to prevent new coal and gas approvals that do not align with these transition pathways.
While government officials have defended the current strategy, asserting that the LNG export sector has generated significant revenue and employment, critics argue that this dual focus is imprudent. Tim Ayres, the Industry Minister, claims there is no contradiction in pursuing renewable energy advantages while supporting coal exports, but this perspective is increasingly being challenged.
Why it Matters
The findings of this report highlight a pivotal moment for Australia as it grapples with its energy future. The stark contrast in government support for fossil fuels versus renewable energy raises critical questions about the nation’s credibility and competitiveness in a rapidly evolving global market. As the world shifts towards greener alternatives, Australia risks being left behind if it does not recalibrate its energy policies. The decisions made in the lead-up to and during COP31 could have lasting ramifications not only for the country’s economy but also for its standing in the fight against climate change.