NGOs back Andrew Forrest call to dump diesel rebate in favour of green hydrogen

Conservation groups have thrown their support behind calls by iron ore billionaire and green hydrogen evangelist Andrew Forrest to dump the $8 billion a year diesel rebate scheme, and put the money towards support for green hydrogen.

Forrest has reportedly been lobbying both the federal Coalition government and the Labor opposition to dump the diesel rebate scheme, which is one of the main subsidies for the fossil fuel industry in Australia.

Forrest’s listed iron ore company Fortescue Metals is one of the biggest beneficiaries of the rebate of the fuel excise, receiving around $300 million a year – most of it used in huge trucks that ferry ore to the processing plant and on trains.

Part of Forrest’s green hydrogen plans include converting the Fortescue truck fleet to fuel cell vehicles, and he has already boasted how his team achieved the conversion of the world’s largest haul truck to date in just 100 days. He also wants his first ship to be powered by green ammonia within 12 months.

According to The Australian newspaper, Forrest is asking that the diesel rebate – available to miners and farmers who their vehicles off grid, and to diesel used in power plants on remote sites – be rescinded by 2025. Smaller businesses and farmers would still have access.

He is pointing out that fuel cell trucks can be powered by wind and solar plants located at or near major mining centres, avoiding not just high costs and pollution, but also the security issues around fossil fuel imports and supply logistics.

The move was welcomed by the Australian Conservation Foundation which notes that the cost of the rebate is expected to rise to $8.9 billion by 2024, with much of it going to Australia’s biggest mining companies, including BHP Billiton and Rio Tinto as well as Fortescue and Gina Rinehart’s Roy Hill Mining.

“While most Australians pay around 40 cents in tax for every litre of fuel they buy at a servo, big mining companies like BHP Billiton and Rio Tinto get a complete refund on diesel taxes under this scheme,” said Matt Rose, the head of ACF’s economy and democracy program manager.

“At the Glasgow COP nearly 200 countries, including Australia, committed to speed up the end of fossil fuel subsidies.

“The time is right to remove costly government handouts that prop up a fossil fuel-based economy and invest this money in helping small and medium sized companies access technology that doesn’t require polluting diesel fuel to drive and power their businesses.”