The component figures sit on the public record, scattered across primary documents. The Fuel Tax Credit appears as a budget outlay in the Treasury Tax Expenditures and Insights Statement04 and as a forward-year line in Budget Paper 1, Statement 4 (Revenue) of the 2025-26 Federal Budget12. Industry-share data appears in the Australian Taxation Office's annual Excise and Fuel Scheme statistics05. State-level support measures appear separately in eight state and territory budget papers. The Australia Institute's annual Fossil Fuel Subsidies in Australia series is the standard narrow-definition aggregator: it sums those primary inputs into a single comparable yearly federal+state figure, with a consistent methodology applied year over year so the trajectory is comparable. The 2026 report (Grudnoff and Campbell, 12 March 2026) puts the per-minute equivalent at $31,020 (from $16.3 billion divided by the 525,600 minutes in a financial year)01. VERIFIED Broader-definition aggregators including the OECD Inventory of Support Measures for Fossil Fuels14 and the IMF Fossil Fuel Subsidies series produce different totals from the same underlying activity, principally by pricing in implicit environmental costs the Australian narrow-definition figure does not.

The trajectory across recent years is the through-line:

Sources: Australia Institute 2024 report for the 2022-23 baseline and the 2023-24 figure03; the 2025 report for 2024-2502; the 2026 report for 2025-26 and the year-on-year growth rate01. Cumulative growth across the three years is approximately 47%.

The $16.3 billion figure is the federal-plus-state aggregate. What sits beneath it, with each component sourced to its own primary document:

The federal Fuel Tax Credit alone is two-thirds of the total. The aviation excise concession is the second-largest line and the only other single item over a billion dollars. The state-side measures are dominated by Queensland (Brigalow gas peaking plant + coal-rail concession) and Western Australia (Griffin Coal Financial Assistance Agreement). Numbers are rounded; per-component figures are read from the Australia Institute's compilation of the underlying Treasury, ATO, federal-portfolio-budget and state-budget primary sources.

This is a sister piece to article 01 of this publication. The Petroleum Resource Rent Tax does not bite on Australia's LNG export industry because the deduction stack absorbs the headline rate; the Fuel Tax Credit is the public-side transfer that flows in the opposite direction. The same companies, on opposite sides of the public ledger.

The Fuel Tax Credit and the classification dispute

The Fuel Tax Credit Scheme is established under the Fuel Tax Act 2006 (Cth)10. VERIFIED Division 41 of that Act sets out the entitlement: an entity that acquires, manufactures, or imports taxable fuel for use in carrying on its enterprise is entitled to a fuel tax credit for that fuel (s. 41-5). The fuel tax that the credit refunds is the excise levied on diesel and other fuels under the Excise Tariff Act 1921 (Cth), with rates indexed twice a year on 1 February and 1 August by section 6A of that Act11. The pair of Acts is the legal architecture: one imposes excise on diesel; the other refunds it for off-road and on-site business use.

The original logic of the refund is defensible. Fuel excise was designed as a road-user charge, and businesses using diesel in equipment that does not drive on roads were paying a road tax on fuel they were not using on roads. The Fuel Tax Act preserves the road-user-charge component: subsection 43-10(3) reduces the credit by the amount of the road user charge to the extent the fuel is used for travel on a public road10. The off-road business-use case is the case the credit is paying out for. Nobody disputes the logic of the correction.

The dispute is over what the correction has become.

The FTC accounts for $10.8 billion of the $16.3 billion total in 2025-26, or about 66% of all Australian fossil fuel subsidies in any given year on the Australia Institute's series01. The forward-year figure of $10.8 billion appears as a line item in Budget Paper 1, Statement 4 (Revenue) of the 2025-26 Federal Budget12. VERIFIED The growth profile of the FTC line on its own is informative:

The 2024-25 figure of $10.2 billion is the prior-year actual reported in the Treasury Tax Expenditures and Insights Statement 2025-2604; the 2025-26 figure of $10.8 billion is the forward-year line in Budget Paper 1, Statement 4 (Revenue), 2025-2612. Cumulative cost of the Fuel Tax Credit from FY1990-91 to FY2024-25, inflation-adjusted, is approximately $212.8 billion08. ESTIMATED

The Australian government's position on whether this is a subsidy is consistent and longstanding. Treasury reports the Fuel Tax Credit as a budget outlay, not a tax expenditure04. The most direct on-record statement of the classification position came from Rob Heferen, then Executive Director of Treasury's Revenue Group, before the Senate Economics Legislation Committee Estimates hearing on 5 June 2014: the fuel tax credits are "an outlay; it is not a tax expenditure", and "the departure from the base is not a tax expenditure. It is not a subsidy"13. VERIFIED The Parliamentary Library's standard reference on the question, a 2012 FlagPost by Richard Webb, reaches the same conclusion07. Together these are the canonical citations underpinning government and industry communication on the question.

Three international bodies disagree.

The OECD's Inventory of Support Measures for Fossil Fuels classifies the Australian Fuel Tax Credit as fossil fuel support. In its 2024 Inventory, the OECD records Australian government support of approximately AUD 12.4 billion for 2021, of which approximately AUD 10.7 billion (around 86%) is tax expenditure with the FTC as the principal component14. ESTIMATED The OECD's calendar-2021 number uses a methodology that differs from the Australia Institute's narrow-definition fiscal-year series, which reports approximately AUD 11.6 billion for FY2021-22. The International Energy Agency includes the FTC in its Australian fossil fuel subsidy reporting. The International Institute for Sustainable Development reaches the same conclusion in its country-level analysis. The Australia Institute's May 2024 review of the dispute reports that the FTC also meets the World Trade Organization's working definition of a subsidy, namely "government revenue that is otherwise due is foregone or not collected (such as fiscal incentives such as tax credits)"08. VERIFIED

The classification dispute is not academic. A line item Treasury classifies as a tax design feature does not appear on the ledger of items the government can choose to change. A line item the OECD classifies as a fossil fuel subsidy does. The classification is itself the political instrument. Both major Australian political parties have maintained the FTC at full scale across every recent budget. Neither has proposed reducing the mining sector's share. The Parliamentary Budget Office's 2025 election costing of an end to subsidies for the coal mining, oil and gas industries bundles the Fuel Tax Credit alongside other related concessions (accelerated asset depreciation and exploration-related deductions), with the bundle assessed at multi-billion-dollar scale06. VERIFIED

The directional point is the publication's two-article thesis in a single comparison. In the most recent fiscal year for which both numbers are settled actuals, the public paid out roughly six and a half times more in Fuel Tax Credits to the petroleum and mining industries than it collected in Petroleum Resource Rent Tax from the same activities:

Named beneficiaries

The Australian Taxation Office's Taxation Statistics, in the excise and fuel scheme tables, breaks Fuel Tax Credit claims down by industry sector05. The mining industry takes approximately 47% of all FTC claims paid. VERIFIED The Australia Institute's reading of the most recent published ATO Table 4 (FY2023-24) puts coal mining's claim at $1.376 billion in that year, marginally above the entire agriculture, forestry and fishing sector's combined claim01.

Mining sector total and coal-mining figures sourced from TAI 2026 (Figure 6), which reads the per-industry-segment data off ATO Excise and Fuel Scheme Statistics Table 4 for FY2023-240105. Agriculture, forestry, and fishing combined claim is approximate from the same ATO table family.

The original design assumed farms and small manufacturers. What it primarily funds now is diesel engines on iron ore and coal operations.

Per-corporate-group beneficiary figures are derived from Climate Energy Finance's analysis of Australian Taxation Office Corporate Tax Transparency data. The September 2023 CEF report by Tim Buckley projects mining-sector Fuel Tax Credits at a cumulative $37 billion across FY24 to FY30, and proposes a per-corporate-group cap of $50 million per year, with claims above the cap conditional on reinvestment in decarbonisation09. ESTIMATED

These per-company figures are sourced from Climate Energy Finance's analysis of ATO Corporate Tax Transparency disclosures and are reported here at the same confidence level CEF assigns to them09. ESTIMATED The ATO does not publish a single consolidated table of FTC claims by corporate group; estimates are derived from cross-referencing Tax Transparency XLSX disclosures with the ATO Excise and Fuel Scheme tables. Hancock Prospecting (Roy Hill iron ore) and Mineralogy (Palmer iron ore and nickel) appear in Australia Institute commentary on top FTC claimants without disaggregated per-company dollar figures and are not given a number here.

Two cross-references to article 01 of this publication. First, the LNG operators that paid zero PRRT in FY2022-23 also claim Fuel Tax Credits on their extraction operations. The receipts the public collects from these projects are zero on the resource-rent side and negative on the input-tax side. Second, the Treasury Laws Amendment (Tax Accountability and Fairness) Act 2024 introduced a 90% deductions cap on PRRT but left the Fuel Tax Credit untouched. The reforms that have moved on the resource-rent side have not moved on the rebate side. The two policy levers are travelling in opposite directions.

"Fossil fuel subsidies harm the budget and make climate change worse."

Rod Campbell, Research Director, The Australia Institute, on the release of Fossil Fuel Subsidies in Australia 2026, 12 March 2026.

Norway and the absent sovereign wealth fund

Norway produces oil and gas at a volume that places it among the world's mid-tier petroleum exporters, somewhat below Australia on natural-gas exports specifically and somewhat above on oil. It taxes petroleum profits at a combined marginal rate of 78%, comprising the standard 22% corporate income tax and a 71.8% special petroleum tax, with ordinary corporate tax deductible from the special-tax base15. VERIFIED

By statute, every krone of Norway's net petroleum revenue flows into the Government Pension Fund Global, the country's sovereign wealth fund. As of 31 December 2025 the fund's value exceeds NOK 20 trillion, approximately AUD 2.1 to 2.2 trillion at end-2025 exchange rates, making it the world's largest single-country sovereign wealth fund16. VERIFIED

Australia is, by total volume of LNG and coal export, a comparable resource exporter. The Petroleum Resource Rent Tax raises approximately $1.4 billion per year on average across recent years, of which essentially none comes from the LNG export projects that dominate the public debate (see article 01 of this publication for the per-project breakdown). Australia has not established a dedicated resource-revenue sovereign wealth fund comparable to Norway's. The Future Fund, with assets of approximately AUD 230 billion, was seeded from the 2006 Telstra privatisation proceeds and budget surpluses, not from resource revenues.

The Norway comparison is not a counsel of perfection. Norway made a series of deliberate policy choices over four decades. Australia made different choices. The sovereign wealth fund is the compounded result of those choices. While Australia has committed $72.7 billion in forward fossil fuel subsidy estimates over the budget forwards period01, VERIFIED Norway has been collecting about two thirds of its petroleum revenue for the public account.

These are not comparable approaches to the same resource endowment. They are opposite ones.

What this means

A reader could conclude that the Fuel Tax Credit is broken policy. The Treasury position, the Parliamentary Library FlagPost, and the cross-party budget record together support a narrower and more useful conclusion: the Fuel Tax Credit is not broken. It is operating exactly as it was drafted to operate. The policy question is not whether the rebate works as designed. The policy question is whether the design that worked for farms in the 1970s should still apply at the same rate to the largest mining corporations in the world in 2026.

The reform options that appear in the serious policy literature are three. First, a sector-specific cap on the FTC, holding the rebate in place for agriculture and small business while tapering it for the mining sector; Climate Energy Finance proposes a per-corporate-group cap of $50 million per year with reinvestment conditions on claims above the cap09. Second, the PRRT deduction-stack reform covered in detail in article 01 of this publication. Third, a point-of-export levy on LNG, also covered in article 01. Each is a separate instrument with separate constitutional and political characteristics; none is mutually exclusive of the others.

The forward estimates ($72.7 billion in committed multi-year fossil fuel support01) sit against the Disaster Ready Fund (the successor to the Emergency Response Fund, restructured under the Albanese government in 2023), which had a standing balance of $5.1 billion in September 2025 per the Australia Institute's reading of the Department of Finance disclosure01. The methodology gap matters (the first is a multi-year cumulative flow, the second is a standing fund balance) and so does the directional point: total planned fossil fuel subsidies are approximately fourteen times larger than the entire balance of the fund Australia maintains for responding to the disasters those subsidies make more frequent and more severe01. VERIFIED

Whether the Australian government will reform any of this is a separate question. The figure is on the public record. The classification is a choice. The choice has been made.