Environmental group within Labor pushing for industry to pay more tax for using fossil fuels in a move that would send household bills soaring

By NICHOLAS COMINO, POLITICAL REPORTER, AUSTRALIA Published: 11:56, 23 July 2026 | Updated: 11:56, 23 July 2026 A campaign within Labor to end fossil fuel tax credits over environmental concerns could further raise the already soaring cost of living for millions of Australians. Delegates at the party's national conference in Adelaide on Thursday backed an amendment from the Labor Environment Action Network (LEAN) to ensure 'all policies, including taxation' support Australia's transition to net zero. The debate centred on Fuel Tax Credits - which refund the excise paid on diesel used away from public roads by industries like agriculture, construction, mining, fishing, forestry and tourism - the scrapping of which would drive up the cost of production. The revised platform states Labor will 'ensure that all policies, including taxation, work together to provide appropriate incentives and remove disincentives for orderly decarbonisation'. While conference delegates on Thursday stopped short of endorsing direct changes to the Fuel Tax Credits system, the amendment sharpened concerns among farming, mining and construction groups that tax concessions could be scrapped by Labor. Labor Bennelong MP Jerome Laxale, who backed the amendment, made clear supporters viewed taxation policy as one lever to drive emissions reductions. 'Our new platform should scream that Labor are serious about climate action and that no-one who reads it should be surprised when we use our time in government to deliver,' Mr Laxale told The Australian. The push follows a broader campaign from LEAN to cap diesel fuel rebate claims at $50 million per company and redirect the savings into a decarbonisation fund. Jerome Laxale (left) backed a motion to align tax policy with Labor's net-zero goals On its website, the group says: 'Capping the diesel fuel rebate at $50 million per company and creating a Decarbonisation Fund is a fairer, faster, smarter path to Australia's 2035 targets and net zero.' 'It closes a loophole that rewards pollution, and instead channels billions into clean energy solutions.' LEAN argues reforming the scheme would help align government policy with emissions reduction goals while accelerating investment in clean energy projects. Although activists failed to secure support for a cap or abolition of Fuel Tax Credits at the conference, industry groups say the proposal's prominence demonstrates the issue is unlikely to disappear. In a joint statement, the Fuel Tax Credit Alliance, representing the National Farmers' Federation, Master Builders Australia, the Minerals Council of Australia and other industry bodies, welcomed the conference outcome while warning against future attempts to revisit the concession. 'Today's decision by Labor's National Conference in Adelaide to reject the activist push to cap or remove Fuel Tax Credits is a victory for regional Australia, local jobs and businesses that keep Australia moving,' the alliance said. The group rejected claims that Fuel Tax Credits amount to a subsidy, arguing the scheme simply ensures businesses operating off public roads are not charged a tax designed to fund road infrastructure. 'Fuel Tax Credits are not linked to decarbonisation, as they provide fair treatment for businesses that use fuel off public roads,' the statement said. The motion was supported by the Labor Environment Actiion Network LEAN (pictured)  'Regional industries including farming, mining, construction, fishing, forestry and tourism rely on diesel to operate machinery, vessels and equipment in places where they do not use, or benefit from, the road infrastructure which fuel excise was designed to fund.' The alliance warned that any future attempt to cap or scrap the scheme would have consequences beyond the industries directly affected. 'Capping or removing Fuel Tax Credits would hit regional and trade-exposed industries with higher costs and increase the cost of living for every Australian,' it said. Minerals Council chief executive Tania Constable said the conference had reached the right outcome but stressed the issue remained important to regional industries. 'This is a sensible outcome, because the last thing our industries need is higher costs which would threaten their survival,' Ms Constable said. National Farmers' Federation chief executive Michael Guerin said the rebate reflected a basic principle of tax fairness. 'The diesel fuel rebate recognises vehicles that aren't on the road. Agriculture is an important element of that,' he said. The Fuel Tax Credit Alliance welcomed the move but warned it could put the industry at risk  Master Builders Australia chief executive Denita Wawn warned that any reduction in the credit would eventually flow through supply chains and into the price of housing. 'Builders and their suppliers rely on fuel and diesel-powered equipment on construction sites every day,' Ms Wawn said. 'The industry cannot afford additional costs that would flow through the supply chain and ultimately add to the cost of building new homes.'