Mining companies in Australia used almost 8 billion litres of diesel in 2023–24, a quarter of Australia’s total, 3.5 times more than agriculture, and more than all of the country’s 2.9 million dual-cab utes combined. This paper proposes that eliminating diesel subsidies for mining would encourage electrifying mining equipment, improving Australia’s fuel security and budget balance while reducing greenhouse gas emissions.

Key points

• Diesel use in mining has tripled in the last 20 years and is expected to increase into the future.
• Recent reports on BHP shelving plans to electrify its Pilbara mining fleet highlight how slow the mining industry has been to reduce its diesel use.
• Mining companies have little incentive to electrify because their diesel use is subsidised by the Fuel Tax Credits Scheme and they can use unlimited carbon offsets to comply with environmental requirements.
• The Fuel Tax Credits Scheme costs taxpayers over $10 billion per year.