The Australia Institute is attending the First Conference on Transitioning Away from Fossil Fuels, in Santa Marta this week, with a clear brief: cut through the complexity of emissions accounting and politics, and ask a simpler question - how does Australia, and the world, transition away from fossil fuels?
Fri 24 Apr 2026 15.30
AAP Image/Joel Carrett
Australia has been making climate commitments since it signed the Paris Agreement in 2015. In that same decade, its gas exports doubled, and its coal exports grew. This is not a coincidence – it is the result of a climate policy approach that focuses on complex emissions accounting, rather than fossil fuel supply; serving the interests of the industry it was meant to wind down.
The Santa Marta conference offers something different: a space to talk about phasing out supply. Not carbon credits, not dodgy offset frameworks, not domestic emissions accounting that conveniently excludes exported coal and gas.
Instead, straightforward questions: how much fossil fuels are being produced, how much new fossil fuels are being approved, and what it will take to stop their production…and by when?
The Australia Institute’s position going into the conference is built around a four-step plan. Each step is clear, evidence-based, and something the Australian government could begin tomorrow if it chose to.
The most immediate action any government can take in starting a fossil fuel transition is to stop approving new coal and gas projects.
It sounds so jarringly obvious when you say it out loud, because it is.
Australia currently has almost 100 new fossil fuel projects in development. If they proceed, they will lock in billions of tonnes of greenhouse gas emissions annually for decades. The federal government has shown no sign of limiting this pipeline.
In 2025 alone, it approved a 45-year expansion of Australia’s largest gas export terminal, and according to the International Energy Agency (IEA), Australia has the world’s largest pipeline of coal export projects.
The typical industry argument is that stopping Australian fossil fuel projects would just shift production elsewhere. This is also known as the ‘drug dealer’s defence’.
The evidence does not support this.
For example, when community opposition blocked three South Korean-backed coal mines in New South Wales, South Korea did not simply find another supplier; it changed its energy policy, bringing forward its coal phase-out from 2050 to 2040.
Halting supply impacts demand. That is a lesson that Australia’s own experience teaches.
Stopping new approvals is necessary, but not sufficient. Modelling shows that simply halting expansion – without reducing production from existing operations – leaves emissions far above what a 1.5°C pathway requires. To stay within the carbon budget, the rate of decline needs to be faster than what a no-new-projects policy alone would achieve. That means existing mines need closure dates, not just a pause on new ones.
Without legislation specifying when fossil fuel production ends, businesses lack the incentive to plan for it. Between 2010 and 2022, Australia’s oil and gas industry invested $473 billion in expansion. Investment that only makes sense if producers are confident the policy environment will remain permissive – and currently, it is very permissive. A statutory phase-out timeline changes this, and gives workers and communities the certainty they need to plan for a new future
Australia has committed to phasing out fossil fuel subsidies three separate times: at the G20 in 2009, in 2023, and again in 2025. On each occasion, the commitment was made and then quietly set aside.
In 2025–26, fossil fuel subsidies from Australian state and federal governments hit a record high, totalling more than the country spends on its army or its air force.
To demonstrate, here are a few galling figures from an Australia Institute analysis:
$16.3B: Total fossil fuel subsidies in Australia, 2025–26 — up 9.4% on the prior year
$10.8B: Cost of the Fuel Tax Credit Scheme, which largely benefits multinational mining companies
$200B+: Total cost of the Fuel Tax Credit Scheme since 1990
The fossil fuel subsidies rubber really hits the road when you look at the Fuel Tax Credit Scheme (the largest single subsidy) which refunds fuel tax to major industrial users, including coal mining companies receiving over $1 billion a year.
The OECD has specifically called for Australia to reduce or eliminate this scheme. The government’s own budget projections show it growing faster than spending on aged care, childcare, and disability support.
These subsidies are rising because governments expect to produce and use more fossil fuels in future, not less.
They are not a legacy cost – they are forward planning.
Australia is one of the world’s largest fossil fuel exporters and one of the least effective at collecting revenue from that production. As the Senate Select Committee on Gas Taxation heard in the past week, more than half of Australia’s LNG exports attract no royalties, and no petroleum tax.
The Australian Taxation Office has labelled the oil and gas industry “systemic non-payers.”
Australia collects more public revenue from student loan repayments than from gas exporters – and more from nurses, teachers, and beer drinkers than from the gas industry.
The complexity of Australia’s climate policy is not an accident. The more complex the policy, the harder it is for the public to engage — and the easier it is for fossil fuel companies to dominate the debate.
What makes The Australia Institute’s position at Santa Marta distinctive is its insistence on clarity. Australia’s climate policy has long been characterised by elaborate frameworks – offset schemes, emissions intensity baselines, safeguard mechanisms – that are genuinely difficult for the public to evaluate, and that fossil fuel companies, with the resources to master the detail, have proven adept at shaping to their advantage.
The four recommendations brought to Santa Marta are deliberately the opposite of that. They are easy to understand, easy to evaluate, and most importantly, easy to hold governments accountable for. Either you are approving new fossil fuel projects, or you are not. Either subsidies are going up, or they are coming down. Either there is a phase-out date in law, or there isn’t.
None of this is new. Pacific Island leaders have been calling for exactly this since before the Paris Agreement. The 2015 Suva Declaration called for an international moratorium on new fossil fuel extraction, six months before the Paris Agreement was signed.
What is new is the vision and context: a conference where the consensus veto that has shielded fossil fuel-producing nations for thirty years does not apply, and where the question on the table is not whether to transition, but how, and how fast.
Australia (well, at least departmental representatives, Minister Bowen stayed home) is in that room this week.
The big question is what the Australian government delegation does when it gets home.
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Isn’t it peculiar that we get to this week in April and suddenly the impossible seems so inevitable that we start hearing about all the “sensible” compromises? Six months ago, any sort of talk about a gas tax was dismissed as leftie pipe dreams.
One of the world’s most vulnerable nations to climate change has urged Australia to reassess its reliance on fossil fuels and impose a 25 per cent tax on gas exports. Vanuatu’s Minister for Climate Change Adaptation, Ralph Regenvanu, told SBS that Australia should be using the global energy crisis as a catalyst to ramp up its shift to clean energy.
