Prime Minister Malcolm Turnbull faces an early test at the Paris climate talks over whether he will sign a communique on stamping out subsidies that encourage climate pollution, the Australian Conservation Foundation said today.

Mr Turnbull has reportedly been encouraged by other national leaders to sign a ‘fossil fuel subsidy reform communique’ as part of the international effort to keep the increase in global warming under 2°C.

“If the federal government is serious about tackling climate change – and about letting the market work – it should stop subsidising big polluters to pollute,” said ACF’s economist Matthew Rose.

“Probably the most notorious of Australia’s fossil fuel subsidies is the Fuel Tax Credit scheme, which will cost Australians a staggering $26 billion over the next four years.

“The diesel rebate is notorious because it means while Australian motorists pay 38 cents in tax on every litre of fuel they buy, some of the world’s biggest mining companies, like Glencore Xstrata, BHP Billiton, Peabody, Rio Tinto and Anglo American, pay not a single cent in tax for the diesel they use in their mining operations.”

The Fuel Tax Credit scheme is among the top 20 biggest expenses in the Budget. 

Australia’s Federal Budget allocates more to fuel subsidies than to overseas aid.

Research by ACF earlier this year revealed the five companies that are the biggest coal industry recipients of taxpayer-subsidised diesel through the Fuel Tax Credit scheme and shows simple changes to the scheme would save $15 billion over four years.

“We urge Mr Turnbull to do the right thing by Australian taxpayers and the climate by joining this commitment to phase out senseless fossil fuel subsidies,” Mr Rose said.

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