Greenpeace has released a report that estimates total energy and transport subsidies in Australia at between A$9.3 billion and A$10.1 billion during 2005-06. The 83-page report (Energy and Transport Subsidies in Australia) finds that the vast majority of these subsidies, 96%, have supported fossil fuel consumption, while the remaining 4% went to renewable energy and energy efficiency.

The report, authored by Chris Riedy, a researcher at the Institute for Sustainable Futures, focuses on domestic financial subsidies to energy and transport, and in some cases discusses economic structural incentives that are not strictly subsidies, such as incentives resulting from the design of the taxation system. It finds that road users are currently the greatest beneficiaries from fossil fuel subsidies in Australia: 74% of fossil fules subsides went to transport. Meanwhile, the largest overall subsidy calculated by Greenpeace came from the failure of governments to capture sufficient revenue from the road network to cover the maintenence costs. In 2005-06, the cost of providing the road network was A$4.7 billion more than the revenue received from road users.

Greenpeace also estimates the impact that the removal of the identified subsidies would have on energy prices. In the electricity sector, for example, it is estimated that subsidy removal would increase electricity prices by about 0.5 cents per kilowatt hour or 3.9%. In the transport sector, it is calculated that the identified subsidies reduce the price of petrol by about 0.38 cents per litre. With petrol prices in Australia at around A$1.20 per litre, Greenpeace maintains that removing price distortions would make certain alternative fuels competitive with petroleum on cost.