The Australia Institute reported the latest fossil fuel industry subsidy numbers in April this year. Fossil fuel subsidies cost Australians a staggering $10.3 billion in 2020-21. Meaning that every minute of every day $19,686 was effectively given to coal, oil and gas companies and major users of fossil fuels by Australian Tax payers. Rod Campbell, Research Director at The Australia Institute:
“COAL, OIL AND GAS COMPANIES IN AUSTRALIA GIVE THE IMPRESSION THAT THEY ARE MAJOR CONTRIBUTORS TO THE AUSTRALIAN ECONOMY, BUT OUR RESEARCH SHOWS THAT THEY ARE MAJOR RECIPIENTS OF GOVERNMENT FUNDS.
THE MAJOR SUBSIDIES ARE COMMONWEALTH TAX BREAKS THAT MEAN THE LARGEST USERS OF FOSSIL FUELS GET A REFUND WORTH $7.8 BILLION ON A TAX THAT THE REST OF THE COMMUNITY HAS TO PAY."
The impact of subsidized fossil fuels is a kind devil's deal many of us are party to. Without the subsidies, petrol would be more expensive, meaning that anything that uses petrol would be more expensive. Pretty much everything.
But it's not just petrol and transport. Fossil fuels make a pile of other products that many of us are trying to get out of our lives. And the big one is plastic. The thing is that most virgin plastic is made from fossil fuels and it's price has a direct relationship to subsidies.
A great example of the fossil fuel subsidy problem occured during COVID, when we weren't going anywhere and demand for oil and gas dropped significantly. The demand drop had the effect of making fossil fuel products even cheaper. Somewhat ironically, this made companies like Coca-Cola and other corporates committed to using recycled plastics a good friend. As the price of plastic tanked up to 40% and may smaller companies switched to virgin, they stayed the course and kept plastic recyclers afloat.
Chemicals that are common to many household cleaning products and laundry products are also big fossil fuel users. It seems they might literally be under attack. Unilever has committed to eliminate virgin fossil fuels as a feedstock for the chemicals in its cleaning and laundry products - Omo, Surf and Sunlight. The move is part of its Clean Future strategy and they have recently announced a partnership with Arzeda, a bioproducts developer, to use enzymes in the cleaning products, to break down stains made from fat, oils and protein chains on laundry and surfaces.
This isn't going to be good for coal mines if the trend continues.
The truth that we all need to face is that while we persist with travel, all over the world, it is subsidized fossil fuels that get us there. The reality is that even the most enthusiastic first world consumer, diligently recycling and eating less meat, is often the first to get on a plane and skip off to see some giraffes in Africa.
This is good for coal mines and we need to own it if we want it to change.
Image: Unsplash Terren Hurst