Fortescue lobbies against fossil fuel subsidy that earned it A$308m last year

Australian mining firm discusses advocacy in third annual transition plan

Fortescue has revealed that it is lobbying against a fossil fuel subsidy from which it earns hundreds of millions of dollars.  

In its latest climate transition plan, the Australian miner gives a detailed explanation of its efforts to change policies that make decarbonisation harder. 

One such policy is the Australian government’s Diesel Fuel Tax Credit (DFTC), which Fortescue benefits from financially. 

“We claimed A$308 million in diesel fuel tax credits in FY25 relating to our consumption of more than 600 ML of diesel at a rate of A$0.51 per litre,” the firm said. 

“Based on [government] guidance, this rate is expected to rise to A$0.59 per litre by FY31.”  

The lion’s share of Fortescue’s direct emissions come from diesel consumption in its Australian mines. 

It said it was “prioritising the electrification of our heavy mining equipment to achieve significant early decarbonisation” but that support for fossil fuels through policies like DFTC “outweigh the financial incentives to decarbonise”. 

“Decarbonisation project viability hinges on government action to remove barriers and level the playing field with fossil fuels,” the company wrote elsewhere in the report. 

“In some cases, such as the DFTC in Australia, policies actively incentivise fossil fuel use. Fortescue challenges these policies and advocates for change.”

It explained that it had commissioned analysis “to demonstrate the adverse impact on investment created by these skewed incentives, and advanced policy recommendations for reforms that could drive decarbonisation of heavy industry whilst avoiding any unintended consequences for small and medium enterprises”. 

“We engaged with key government departments to make the case for reform, an effort that continues.”

SBTi validation still on hold

Last year, Fortescue announced it was “pausing” efforts to get its climate targets validated by the Science Based Targets Initiative until the body’s revised corporate net-zero standard was finalised. 

In its update, it said it had been “actively engaging” with SBTi since, but validation is still on hold.