In an budget forecast punctuated by fiscal belt tightening, Australia’s fossil fuel sector is set to receive a whopping $47 billion in federal government subsidies over the next four years, a new report has found.

The analysis, released on Thursday by the Australian Conservation Foundation, uses federal budget data confirmed by this week’s mid-year economic and fiscal outlook (MYEFO) to identify and tally government handouts for the production and use of fossil fuels.

Among the biggest are the Fuel Tax Credit scheme ($27.9 billion over four years), concessional rate of excise on aviation fuel ($5.5 billion), accelerated depreciation rules ($1.5 billion) and the removal of the carbon price ($12.5 billion).

Meanwhile, the renewable energy industry remains under a cloud of uncertainty, with renewed federal government attacks on the Renewable Energy Target (RET) coming just a week after Foreign Minister Julie Bishop used it to bolster Australia’s climate credentials in Lima.

According to figures released by the Labor Party today, investment in renewables in Australia has fallen by 70 per cent since the Coalition came to power.

Progress on negotiations for the RET stalled recently when Labor abandoned talks, saying that the Abbott government’s position of a 40 per cent cut to the target was unacceptable.

Labor’s current position on RET, which was today endorsed by peak renweables body the Clean Energy Council, is that a middle ground can be reached that would support both renewables growth and jobs in emissions intensive, trade exposed sectors.

It has called for no changes to the Small-Scale Renewable Energy Scheme; possible exemption of energy intensive sectors from the LRET; minimal changes to the Large-Scale RET; and the locking in of a bipartisan agreement, to provide investment certainty to the renewables sector.

This glaring divide between Australia’s renewables sector – which is languishing in political limbo – and its fossil fuels sector – which is being given multi-billion-dollar incentives to keep polluting – is part of the Abbott government’s “nonsensical approach” to energy, says ACF President Geoff Cousins.

“With one hand the Government encourages pollution by giving the Fuel Tax Credit diesel subsidy to the mining industry and others, then with the other hand it gives out money through so called ‘Direct Action’, which subsidises businesses to reduce emissions,” Cousins said.

“Unfortunately the $47 billion incentive to pollute is much stronger than Direct Action’s $1 billion incentive to reduce pollution.

Cousins points to the Fuel Tax Credit scheme – which allows corporations like Rio Tinto and BHP Billiton to pay virtually no tax on the diesel they use – as the most perverse of the subsidies, given car drivers and small businesses pay nearly 39c in tax for every litre of fuel they buy.

Figures released in this week’s mid-year economic and fiscal outlook (MYEFO) show that of the $4.2 billion extra the government will raise through the indexation of fuel excise, $1.9 billion will be refunded to eligible businesses via the Fuel Tax Credit scheme.

“For a Government that desperately needs to find some Budget savings, cutting fossil fuel handouts that encourage pollution should be obvious,” Cousins said.