Environmental groups have been accused by the oil and gas industry of "subsidising illegal activity and activism".

The government register that provides tax-deductible status for donations to groups like WWF and Greenpeace may have been "subverted" by some groups to channel money into illegal protests, according to the industry.

The APPEA is calling for closer scrutiny of the charitable status of environmental groups. Credit:Jessica Shapiro

Groups that specialise in training protesters to take part in mining blockades are also qualifying for charity status through "affiliation" to groups listed on the register of environmental organisations overseen by the federal Environment Department.

The claims are contained in a submission to the Senate inquiry into the tax-deductible status of environmental groups, which held its first public hearing on Tuesday, by the Australian Petroleum Production & Exploration Association.