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The federal government could save $14 billion by capping the fuel tax credit for large mining companies and use the funds to drive the electrification of the sector, think tank Climate Energy Finance says. The fuel tax credit scheme, which allows businesses to claim for tax paid on fuel used to power machinery and heavy vehicles, will cost taxpayers $37 billion by 2030 unless the government sets a limit on how much they can claim, a report by the think tank says. Report co-author Tim Buckley said the tax credit scheme was the nation’s largest fossil fuel subsidy and one of the biggest in the world. Read more

Fossil fuel subsidies in Australia reached $11 billion in 2022-23, extending decades of direct capital transfers and tax concessions to some of Australia’s most polluting industries and making Australia one of the G20’s largest providers of subsidies for fossil fuels. The scale of the impact to our economy is enormous. The FTCS is the largest fossil fuel subsidy in Australia and is the 18th largest government expense program in 2023-24. The federal government estimates the FTCS will cost over $9.5 billion in tax concessions in 2023-24 alone, with the credits largely going to Australia’s bulk commodity and fossil fuel mining firms. Read more

Tim Buckley says we have a ‘once-in-a-generation’ chance to pivot our economy towards industries of the future. Australia imports 29 billion litres of high emissions, inflationary diesel each year, heavily subsidised by the Federal Government, critically undermining Australia’s climate and green manufacturing ambitions. A cap to the fuel rebate scheme would create a tailwind for electrifying Australia’s mining fleet, deploying the best technology to become a world leader in embedded decarbonisation. Read more

Australia could kick start the electric truck era by curbing off-road diesel rebates that go to the mining sector, economic modelling shows. A report to be released by independent think tank Climate Energy Finance on Monday calls for the diesel fuel tax credit (FTC) for the mining sector to be capped at $50 million a year per company.”This is not a revenue grab, we’re trying to encourage them to do the right thing,” co-author Tim Buckley told AAP. He said Australia must deal with the “hyper-inflationary” dependence on imported high-emissions diesel and build onshore manufacturing. Australia needs its biggest companies to be “leaders not laggards” on electrification and emissions reduction, he said. “This is all about them having a policy tailwind to back their own strategy of decarbonisation,” he said. Read more

Tim Buckley has a menu of “no regrets” investments in renewables that NSW Energy Minister Sharpe and the Treasurer Mookhey should consider regardless of Eraring. They include: backing with front-loaded finance and accelerated planning approvals 1200MW of utility scale renewables and 1200MW of distributed (customer-owned) renewables each year until 2030; accelerating the rollout of rooftop solar and batteries in public housing and schools across NSW; accelerating the frequency and ambition of Renewable Energy Zones auctions; cajoling NSW transmission and distribution companies to use tech company Neara to identify existing spare grid capacity for new renewables to be plugged in (it reckons there’s room for 10,000MW); and accelerating electrification for rentals and behind-the-meter batteries. Read more

The New South Wales (NSW) State Government has entered talks with Origin Energy to discuss extending the life of Australia’s largest coal-fired power station. The move comes after the nation’s grid operator flagged concerns of energy shortfalls over the next ten years as it retires 62% of its coal power fleet. Tim Buckley, director at the think tank Climate Energy Finance, was critical of the proposals for the Eraring plant stating: “The idea that a 50-year-old plant can just be extended without serious risk of catastrophic failure is ridiculous.” Read more

What is the real cost to transition? The cost of retaining Eraring for an additional 1-2 years would be $200-$400 per year. Eraring has no long term supply locked in beyond 2025, therefore will pay export price parity for coal supply. Locking in coal infrastructure will slow down the transition to renewables. We need to accelerate the deployment of low cost, zero emissions, replacement capacity, not continue with an unreliable coal clunker. Coal subsidies will crowd out replacement capacity that would otherwise permanently solve the problem. Read more

There are concerns that current construction market pressures could delay the rollout of wind, solar, and battery projects needed to plug supply gaps when Eraring comes offline in 2025. “It’s sensible to look at what alternatives $200-$400m/yr provide for New South Wales citizens,” Tim Buckley. Read more

Energy analyst Tim Buckley contests O’Reilly and AEMO’s views on the ability of Eraring to boost electricity system reliability. “Extending the life of a coal clunker that is one of the oldest power plants in the electricity system is not a way to boost reliability.” Keeping Eraring open will generate around 9 million tonnes of additional CO2 emissions a year — around 2.8% of Australia’s total — and cost $1.2 billion to offset via the purchase of Australian Carbon Credit Units (ACCUs), a recent Nexa Advisory report found. Read more

The NSW government has decided there is a case for extending the life of the nation’s largest coal-fired power station to mitigate our energy risk. But the growing risk for NSW actually lies in relying on one near-moribund plant at Eraring in Lake Macquarie for 16 per cent of power generation. In 2022, forced outages at Australia’s ageing coal power fleet meant coal capacity fell way short of forecasts, crippling the national electricity market. Keeping this increasingly unreliable coal power generator on life support as it enters terminal decline, and paying its operator hundreds of millions in public subsidies to do so, is totally unjustified. Read more

The NSW government will “engage with Origin Energy” on a proposed extension of the life of Australia’s largest black coal-fired power plant. Tim Buckley, from Clean Energy Finance, said providing government subsidies to keep Eraring open could lead to more setbacks for future wind and solar projects. “Every time you extend a coal plant, you delay and defer expenditure on replacement capacity,” he told ABC Radio Sydney. “So these subsidies would be crowding out the replacement capacity that would permanently solve the problem,” he said. Read more

The NSW government has this morning confirmed it will “engage” with Origin Energy to extend operations of the 2.9 GW Eraring power station. The announcement quickly drew criticism, with Climate Energy Finance director, Tim Buckley, calling the move “totally unjustified.” Buckley added public money would be far better spent accelerating the transition. He called on the NSW government to replicate Queensland’s progressive coal export royalty program, adding: “it’s high time the myth of the presumed centrality of end-of-life, expensive, high emissions coal power to energy security was busted.” Read more