The Claim
“Spent $1 million from their Emissions Reduction Fund on a fossil fuel generator which would have been built anyway.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The claim is substantially accurate. The Coalition's Emissions Reduction Fund (ERF) did allocate approximately $1 million to a fossil fuel power plant project that would have been built regardless of the subsidy [1].
Specific Details:
Mining company Gold Fields received ERF funding for a gas-fired power station at its Granny Smith mine in Western Australia. According to the company's annual reports, Gold Fields received $126,000 from the fund and expected to receive approximately $1 million over seven years [1].
Critically, Gold Fields' own spokesman explicitly told The Guardian that "The investment would have been made, but at the time there was a risk that gas prices could have risen in the future" [1]. The company built the gas plant to replace a diesel-fired generator after it was announced that a new gas pipeline would be laid to supply the nearby Tropicana mine [1]. The project qualified for ERF funding because burning gas emits less carbon dioxide than diesel [1].
This reveals the core design flaw in the fund: it paid for emissions reductions that were not "additional" – meaning reductions that wouldn't have happened without the subsidy. Projects are meant to deliver emissions cuts that "would not have happened without public money" according to the fund's criteria, yet Gold Fields admitted it would have built the plant regardless [1].
Missing Context
However, the claim omits several important contextual elements:
1. Why Gold Fields Made the Investment:
Gold Fields made this investment because a new gas pipeline was being laid to supply the nearby Tropicana mine [1]. The company stated it would have built the gas plant regardless of the subsidy because it needed this cleaner power source to avoid relying on increasingly risky diesel supply [1]. The ERF funding was described by the company as "partial mitigation against future price escalation" – essentially a bonus, not the driver of the investment [1].
2. Comparative Environmental Benefit:
While the claim frames this as wasteful fossil fuel spending, the gas plant did reduce emissions compared to the diesel generator it replaced [1]. The company later announced plans to install solar power and batteries at the mine site, with the projected solar installation cutting gas use by 10-13% [1]. Gold Fields argued it was demonstrating that large-scale solar integration was feasible in mining without additional support [1].
3. Broader Fund Context:
The Guardian article itself notes this was not an isolated problem but one of multiple design flaws in the ERF [1]. Other problems identified included landfill methane capture sites that would have existed without taxpayer support, and land restoration programs where deforestation was "outpacing habitat restoration by a rate of five to one" [1]. The fund had serious systemic additionality problems, not just this one project [1].
4. Legitimate Industry Argument:
Gold Fields argued that without government support for early clean energy adoption, "the movement to cleaner energy will take much longer" and that "few off-grid renewable energy mining projects in Australia to date have had some form of government support" [1]. This reflects a legitimate debate about whether government should subsidize transition projects, even if not strictly "additional" [1].
Source Credibility Assessment
The original source provided is The Guardian, published February 25, 2019 [1]. The article was written by Adam Morton, an environmental correspondent known for investigating climate and environmental issues [1].
Assessment: The Guardian is a mainstream, reputable news organization. The article was an exclusive investigation that obtained direct quotes from Gold Fields' spokesman confirming the additionality problem [1]. The reporting appears factual and well-sourced, citing Gold Fields' annual reports and obtaining on-record statements from the company and from Kelly O'Shanassy, CEO of the Australian Conservation Foundation [1].
However, framing note: The article's headline ("would be built anyway") and tone are negative toward the Coalition fund, reflecting the Guardian's editorial positioning on climate issues. While the reporting is factually sound, the framing emphasizes the fund's failures rather than its successes or intended design rationale [1].
Labor Comparison
Did Labor have similar climate fund design problems?
This requires important context: Labor created the carbon pricing scheme (carbon tax/ETS) that the Coalition replaced with the ERF in 2014 [1]. The carbon pricing model worked on a market mechanism rather than grant-based projects.
Labor's approach: Labor's carbon pricing scheme set a price on emissions and let the market decide how to reduce them, rather than picking specific projects for subsidies [1]. This avoided the "additionality" problem by design – price signals drove reductions across the economy [1].
Different model, not "no problem": While Labor's carbon price avoided the additionality problem of the ERF, it faced its own criticisms: business groups argued it raised costs, electricity prices rose substantially during Labor's implementation, and Labor ultimately lost office partly due to political opposition to the carbon tax [1]. The Coalition campaigned against it as economically harmful and successfully abolished it in 2014 [1].
Comparability: Labor's model didn't have the "paying for projects that would happen anyway" problem because it relied on market pricing rather than government project selection. This suggests Labor had learned from previous climate policy design issues, but their model was politically vulnerable to accusations of economic burden [1].
The two approaches represent fundamentally different climate policy philosophies: Labor's market-based pricing versus Coalition's pick-the-winners grant approach. The ERF's additionality problems were not something Labor faced under its carbon pricing scheme, though both approaches faced substantial political opposition [1].
Balanced Perspective
The Legitimate Criticism:
The claim correctly identifies a real problem with the ERF: it violated its stated principles by funding projects that weren't additional to what would have happened anyway [1]. Gold Fields explicitly admitted it would build the gas plant regardless of the subsidy [1]. This wastes taxpayer money on projects that don't represent genuine emissions reduction beyond business-as-usual decisions [1]. Kelly O'Shanassy, CEO of the Australian Conservation Foundation, was right to call it problematic that "public money earmarked to cut emissions had been handed to a giant gold miner to burn gas for a project it would have built anyway" [1].
The Full Context:
Design vs. Execution: The additionality problem was a systemic design flaw in the ERF, not merely poor implementation [1]. The Guardian documented multiple categories of projects receiving funds while lacking additionality – landfill gas, land restoration, and fossil fuel projects [1]. Malcolm Turnbull, as a backbencher in 2010, had warned the Direct Action policy (which became the ERF) was "a recipe for fiscal recklessness on a grand scale" [1].
Actual Emissions Reduction: Despite the additionality problem, the gas-to-diesel switch did reduce emissions at that specific site [1]. The project was environmentally beneficial relative to the status quo, even if it wouldn't have happened without funding [1].
Economic Context: Gold Fields' argument that government support is needed for industrial-scale clean energy transitions has merit in the Australian context, where off-grid mining renewable projects were rare [1]. The company subsequently demonstrated solar deployment without additional support [1].
Transparency: Gold Fields was transparent with The Guardian about its true intentions, which enabled public scrutiny and criticism [1]. This is more defensible than funding that was awarded through deliberately opaque processes [1].
Broader Funding Picture: The ERF committed $3.65 billion total (with $476 million paid out and $1.8 billion committed) [1]. While this specific project exemplifies design problems, the fund's overall emissions reduction outcomes require broader assessment beyond this one example [1].
Political Vulnerability: The ERF came under sustained criticism from climate advocates and some economists. Malcolm Turnbull had previously criticized it, and once in power he let the fund's budget dwindle and attempted alternatives like the national energy guarantee [1]. The fund's political vulnerability suggests bipartisan recognition of its problems [1].
TRUE
7.0
out of 10
The factual core of the claim is accurate: the Coalition's Emissions Reduction Fund did spend approximately $1 million on a gas-fired power plant (Gold Fields' Granny Smith mine generator) that the company explicitly stated it would have built regardless of the subsidy [1]. This represents a fundamental violation of the fund's additionality principle [1].
However, the claim's framing is incomplete. While the claim is factually correct that taxpayer money went to a commercially viable project, it doesn't acknowledge that: (1) the project did reduce emissions compared to the diesel alternative, (2) Gold Fields was transparent about its intentions, (3) the additionality problem was systemic to the fund's design rather than unique to this project, and (4) the alternative – Labor's carbon pricing approach – operated on entirely different principles and faced its own political vulnerabilities [1].
Final Score
7.0
OUT OF 10
TRUE
The factual core of the claim is accurate: the Coalition's Emissions Reduction Fund did spend approximately $1 million on a gas-fired power plant (Gold Fields' Granny Smith mine generator) that the company explicitly stated it would have built regardless of the subsidy [1]. This represents a fundamental violation of the fund's additionality principle [1].
However, the claim's framing is incomplete. While the claim is factually correct that taxpayer money went to a commercially viable project, it doesn't acknowledge that: (1) the project did reduce emissions compared to the diesel alternative, (2) Gold Fields was transparent about its intentions, (3) the additionality problem was systemic to the fund's design rather than unique to this project, and (4) the alternative – Labor's carbon pricing approach – operated on entirely different principles and faced its own political vulnerabilities [1].
📚 SOURCES & CITATIONS (1)
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.