1. Gas and coal extraction alone cause over 17% of Australia’s domestic emissions (not counting emissions from burning these fuels)
54% of emissions under the Safeguard Mechanism (SGM), which purely measures Scope 1 emissions produced at each facility, relate to gas and coal facilities. Emissions covered by the SGM represented 31% of Australia’s total (in 2023/24). Therefore, gas and coal extraction emissions, excluding burning the fuel (either domestically or in export markets), represented over 17% of Australia domestic emissions. This also excludes emissions associated with domestic transport (pipelines/coal trains) and externally generated electricity supplying gas and coal facilities. Graph below prepared from SGM data published by the Clean Energy Regulator.
Source: SGM data published by the Clean Energy Regulator
82% of gas extracted in Australia is exported (75%) or used by the gas industry for export LNG production (7%). Approximately 70% of coal mined in Australia is exported (thermal and metallurgical). Accordingly, around 13% of Australia’s domestic emissions are solely related to the extraction of fossil fuels for export.
2. Climate pollution from fossil fuels cannot be neutralised or offset using carbon credits
Parents for Climate recently reached a settlement in its greenwashing action with Energy Australia regarding its “Go Neutral” energy plans, which it claimed resulted in carbon neutral electricity and gas due to the use of carbon offset credits. In its public apology, the energy giant admitted “offsets do not prevent or undo the harms caused by burning fossil fuels.” It has withdrawn the Go Neutral products.
This is in line with the European Union directive, which bans the use of carbon neutral claims made using offset credits and calls into question the operation of the Safeguard Mechanism, which permits 100% use of offsets to meet mandated emissions reductions.
For comparison, the European Union’s equivalent of the Safeguard Mechanism, the Emissions Trading System (EU ETS), only permits the use of credits created within the System by companies that emit less than their allocation. The equivalent here would be to only permit the use of Safeguard Mechanism Credits (SMCs) for facilities that emit more than their baseline (instead of allowing Australian Carbon Credit Units, or ACCUs).
3. Gas and coal extraction delivers 2.5% of total government revenues, or <$20 billion on export receipts of $115 billion
This includes State/Territory & Federal coal/gas royalties (which are not a tax, but a “cost of goods sold” imposed by governments for the right to extract minerals owned by the Crown) of about $7 billion; the Petroleum Resources Rent Tax (PRRT), about $1 billion. Analysis of FY20 data by Paul Burke in the Australian Journal of Agricultural and Resource Economics. Company tax for the sector is estimated at $8-12 billion per annum. The Minerals Council of Australia noted that the entire sector including iron ore, gold and other minerals plus gas and coal paid $24.1 billion in FY20.
4. LNG replaces more renewables than coal in export markets
A 2024 LNG Export Study published by the US Department of Energy examined claims by the oil and gas industry there that increasing gas production would displace coal in regions such as Asia. It found that for any reduction in coal use, the corresponding fall in renewable energy would be nearly double. Modelling work found that in scenarios where the US increased its gas production, coal consumption decreased by 13%, renewable energy production decreased by 25%. Graph below from the linked study.
Source: U.S. Department of Energy - LNGUpdate_AppendixA_Dec2024.pdf
5. LNG produces more climate pollution than coal due to fugitive losses and the enormous energy required to liquify gas
A peer-reviewed study by Professor Robert Howarth at Cornell University, found American LNG, at least, was 33% worse than coal when it came to emissions, predominantly due to fugitive methane emissions (which is also significant issue with Australian gas extraction).
The Australian gas export industry uses an additional nearly 10% of whatever gas is exported to process and liquify the gas, as shown in the flow diagram below from the Department of Climate Change, Energy, the Environment & Water. “Gas own use” at 435 petajoules (PJ) was 9.6% of LNG exports (4,541 PJ) and the largest domestic user of gas - larger than gas power generation (387 PJ).
Source: DCCEEW (2024) Australian Energy Statistics, Tables A and F and internal sources
6. Japan profitably re-exports 30-50% of the Australian gas it imports
According to the Institute for Energy Economics and Financial Analysis (IEEFA), “in 2024, Japan on-sold at least 600 PJ of Australian LNG to overseas markets, and potentially 800PJ, more than Eastern Australia’s annual domestic gas consumption. Japanese resales are likely driving more than A$1 billion in profits for Japanese companies, raising questions about Japan’s interests in Australia’s energy policies.”
7. Gas and coal extraction directly employs under 0.5% of Australia’s total workforce
Around 45,000 in coal (equivalent to the headcount of ANZ bank) and 22,000 in gas (less than the headcount of NAB). Allowing for indirect and supporting jobs such as rail freight, port operations, engineering & construction, equipment & services, parts manufacturing, etc, a typical ratio of 3.5 indirect workers per direct yields a total sector-dependent workforce of around 301,500, or 2% of Australia’s total workforce. There are more teachers in Australia.
8. The total annual subsidies to the fossil fuel industry is around $14 billion pa
This is according to the forward estimates. However, if you strip away the fuel excise credits and it’s about half that.
References
- Safeguard Mechanism 2023/24 data spreadsheet and national greenhouse accounts.
- https://onlinelibrary.wiley.com/doi/10.1111/1467-8489.12503
- https://australiainstitute.org.au/wp-content/uploads/2025/03/P1669-Fossil-fuel-subsidies-2025-Web.pdf
- https://reneweconomy.com.au/woodsides-claim-that-gas-displaces-coal-not-borne-out-by-evidence-instead-it-displaces-renewables/amp/
- https://www.afr.com/world/asia/japan-ramps-up-regional-reselling-of-australian-gas-20250519-p5m0d4
- https://www.abc.net.au/news/2024-10-19/gas-emissions-worse-than-coal-study-finds/104481570