Public purse props up fossil fuel industries

GOVERNMENT subsidies to some of Australia's companies are so big they exceed the profits made by those companies.

Government support for the coal industry and coal-fired electricity is so generous that in some cases it has led to the construction of coal-fired power plants when other types of electricity generation would have been cheaper, the report by the Institute for Sustainable Futures at the University of Technology Sydney has found.

Subsidies to fossil fuel energies, worth close to $10 billion, result in a serious market distortion, create an unfair disadvantage to renewable energy, and help increase greenhouse gas pollution, says the report, written by the institute's research principal, Chris Riedy, and commissioned by Greenpeace.


However, over 90 per cent of the subsidies identified in the report would increase greenhouse gas emissions, it says.

Road users benefit most from the subsidies

Fossil fuel subsidies

The aluminium smelting industry has lobbied aggressively against putting a price on greenhouse gas pollution It is estimated to use almost 15 % of Australia's electricity, making it responsible for almost 6 per cent of greenhouse gas emissions.

The annual subsidy for electricity use at the six existing Australian aluminium smelters is at least $210 million, and is likely over $250 million.