Australia debates proposed 25% tax on LNG exports

Australia is facing a debate over a proposed 25% levy on liquefied natural gas (LNG) exports. In the 2023/24 period, Australia exported 78% of its extracted natural gas, generating nearly $70 billion in earnings.

Proponents of the levy argue that taxing exports could incentivize companies to sell more gas domestically, potentially increasing local supply and lowering prices. However, industry groups caution that a revenue-based tax—which applies regardless of project profitability—could discourage investment in new or expensive gas projects. Currently, most offshore petroleum projects are taxed via the petroleum resource rent tax (PRRT), which is based on profits after costs.

In August, 70 Australian scientists signed an open letter supporting the levy and calling for increased investment in science and environmental protection, though the tax would only fund those sectors if specifically earmarked by legislation.