More than 300 Labor branches, along with unions, climate campaigners, and mining billionaire Andrew Forrest, have called on the Albanese government to cap the fuel tax credit scheme for coal companies. This demand follows an analysis by Lock the Gate, which estimates coal companies could receive an additional $6.2 billion in taxpayer refunds if the government approves half of the mine developments currently up for approval. Resources Minister Madeleine King stated the existing regime would remain in place.

"We're not considering any changes. We're simply not," King said.

The fuel tax credit scheme refunds miners, farmers, and other industries the 52.6 cents per liter excise applied to petrol and diesel. The scheme is available to companies using fuel in vehicles on private roads or in machinery, while households and most businesses typically pay the full excise. More than $1 billion a year goes to coalmine operators under the scheme.

Lock the Gate's acting national coordinator, Georgina Woods, said: "The fuel tax credits scheme was rewarding coal companies with billions of dollars for using diesel, reducing the incentive to shift to clean vehicles to cut emissions. It meant companies were effectively claiming a public subsidy to expand coal mining and the money would be much better spent on easing the costs of climate change. Households are struggling with rising energy bills and insurance costs, and that will worsen as the climate crisis escalates. Pollution from mining and burning coal is fuelling rising disaster costs across each state and territory and the annual damage bills from increased flood, bushfire, storm, cyclone and hailstorms could reach over $40bn in the next 25 years."

Energy & Resource Insights, a consultancy created by the Sunrise Project, identified 45 proposed coal mining developments in New South Wales and Queensland. Of these, 22 had environmental impact statements detailing expected diesel consumption. The consultancy estimated coal companies could receive $6.2 billion in rebates on 11.6 billion liters of diesel over the operational lives of these projects. One specific expansion, Glencore and Yancoal's Hunter Valley operations, could receive $1.7 billion in rebates.

Approximately 320 Labor branches have supported a push by the Labor Environment Action Network to limit the rebate to $50 million per company. This proposed cap aims to target large mining companies while excluding farmers and small businesses. The Labor Environment Action Network seeks to amend Labor's national policy platform to commit the government to removing disincentives for decarbonization. Labor MP Jerome Laxale has publicly supported the campaign.

Mining vehicles account for about 35% of the diesel used in Australia, with approximately 15% of all diesel consumption occurring at coalmines. Since its election in 2022, the Albanese government has approved 15 coal developments, primarily mine expansions. The Minerals Council of Australia stated the scheme prevents businesses from paying a tax they do not owe, and described it as critical to the competitiveness of various regional businesses reliant on diesel, including the minerals industry, agriculture, and tourism. BHP received an estimated $622 million in fuel tax credits in the 2025 financial year.