Multinational coal, oil and gas corporations are exploiting loopholes in Australia's industrial pollution law to pump out more climate pollution, not less, new Climate Council analysis has found.
The report, Free Ride: How our biggest polluters are dodging their fair share, finds the biggest polluters continuously covered by the Safeguard Mechanism have cut their climate pollution by just 0.4%, falling far short of the 4.9% cut set out in the law. The problem is that corporations are able to buy their way out of their obligations, purchasing as many cheap "offsets" as they like, rather than cutting pollution. Fossil fuel facilities have gone backwards, increasing their climate pollution by 0.2%.
Climate Council CEO Amanda McKenzie said: "We have an industrial pollution law that is meant to drive down pollution and protect the community, but it isn't working. The Government's review of this law must close the loopholes to ensure we cut climate pollution further and faster, and keep communities safer.
"Australians are already paying the price through worsening bushfires, floods and heatwaves, and through their insurance bills and grocery costs. Meanwhile the biggest polluters pocket the profits and dodge their responsibility.
"Millions of Australian families have put solar on their roofs and done their bit to cut climate pollution. Multinational coal, oil and gas corporations should have to do their fair share too, not exploit loopholes to keep polluting."
Climate Councillor Greg Bourne, former BP Australasia President, said: "Offsets were only ever meant to be a last resort, for pollution that genuinely can't be cut yet. Right now they're the first thing multinational coal, oil and gas corporations reach for, and unless our industrial pollution law is tightened, polluters will keep polluting, rather than making real cuts.
"These are some of the most profitable corporations in the country. Having spent decades in the oil and gas industry, I can tell you they have the technology and the means to clean up today. From electrifying their trucks to stopping methane leaks, the solutions are proven, available and often save money.
"Big multinational coal, oil and gas corporations are not going to change without strong rules from the government to protect the community."
The Climate Council is calling on the Government to use its 2026-27 review of the industrial pollution law, formally the Safeguard Mechanism, to:
- Align it with the top end of Australia's 2035 climate target, a 70% cut in climate pollution.
- Phase out offsets over time so they are only used where pollution genuinely cannot yet be cut.
- Set tighter pollution limits for highly-profitable coal, gas and mining corporations with the technology and means to cut climate pollution at the source.
- Require every new, expanded and extended coal and gas project to be responsible for all of its climate pollution from day one.
The report also finds:
- Coal, gas and mining make up 64% of the climate pollution covered by Australia's industrial pollution law.
- Heavy industry and resources are on track to cut their pollution by just 7.6% by 2030, well short of the 19% cut expected across the country as a whole.
- Families are doing their bit: 4.4 million households have rooftop solar and more than 340,000 installed a home battery in the past year, helping renewables supply half the power in our main grid in late 2025. In contrast, the biggest polluters cut their climate pollution by just 0.4%, and coal and gas polluters increased theirs by 0.2% (considering those continuously covered since the 2023 reforms).
- Climate pollution is already driving up the cost of essentials, with insurance premiums up $30 billion over the past decade and grocery bills projected to rise by up to $3,000 a year by 2070.
- Most Australians (62%) support strengthening the law.
