The Labor Environment Action Network, the ALP’s most influential environmental wing, has launched a high-stakes campaign to strip major mining companies of billions of dollars in fuel tax credits.
The proposal targets a scheme forecast to cost the federal budget $10.8 billion this financial year, rising to $13 billion by 2028-29.
LEAN argues that the current rebate serves as a "fossil fuel subsidy" that disincentivises the transition to cleaner technologies.
The grassroots push, which is gaining traction among several Labor MPs and the ACTU, advocates for a $50 million annual cap on claims for the 15 largest corporate users.
Under this "carrot and stick" model—also supported by Andrew Forrest’s Fortescue—miners could only exceed the cap if the additional funds are reinvested directly into electrification and decarbonisation initiatives.
Any unclaimed revenue would be diverted into a national fund to help the broader resources sector reach net-zero targets.
While Prime Minister Anthony Albanese has previously committed to maintaining the status quo, the government faces a mounting $57 billion budget hole and pressure from the Greens, who favor abolishing the credits entirely for fossil fuel firms.
The Minerals Council of Australia has already vowed to fight the changes, warning that any reduction would essentially function as a "stealth mining tax."