Al-anwar Newspaper English news in Australia
Major emitters have cast serious doubt on a key element of the Albanese government’s strategy to slash carbon pollution, warning the plan is open to exploitation and will force operations to shut.
Mining and manufacturing companies covered by the “safeguard mechanism” – which is a limit on greenhouse gas output that Labor wants to dramatically tighten – also say they can’t reduce their footprint at anything like the recommended pace because affordable technology isn’t yet available.
The safeguard mechanism covers 215 industrial facilities producing at least 100,000 tonnes of CO2-equivalent emissions each annually. Combined they account for 28 per cent of Australia’s greenhouse gas pollution.
The mechanism was established by the federal Coalition in 2016, with limits for each facility. Under the former government, total emissions of safeguard facilities did not have to go down from a collective 137 million tonnes.
Prime Minister Anthony Albanese wants to cut that figure by five million tonnes a year to 2030 as part of its promise to reduce the nation’s carbon pollution by 43 per cent by the end of the decade.
That requires an average decline of 3.5-6 per cent for safeguard facilities, according to an Albanese government consultation paper on reforming the mechanism.
Yesterday while touring a childcare centre in Adelaide, Mr Albanese defended his decision not to attend the 2022 United Nations Climate Change Conference.
“I can’t be in all places at once,” Mr Albanese told reporters.
“And I am sure that if I was going people would be saying why aren’t I attending Parliament.
“I have a very busy schedule of Parliament then the international conferences then back to Parliament.”
Miner Glencore – which has 15 facilities covered by the safeguard and employs 17,350 people directly and indirectly – responded to the consultation by warning that some of the 215 will have to “close as a result of these policy reforms.
“We think that it is important that government is open and transparent on this point,” the Glencore submission, sent in September, said. The submission also noted the company paid $2.9 billion in taxes and royalties last year.
Mining and aluminium refining company Alcoa, which has nine sites in the mechanism, called for a slower initial rate of emissions reduction – about half the pace nominated in the consultation paper.
“To avoid carbon leakage to other jurisdictions with low or no carbon costs, a soft start is proposed for the declining baseline scheme until at least 2030, when decarbonisation technology is ready for broad adoption and lower carbon-intensive electricity is available,” Alcoa said in its submission, also sent in September. Aluminium is a major component of solar panels.
“Instead of a linear decline, delivering a 26 per cent reduction in safeguard emissions by 2029-30 … a soft start could have a decline of 10-15 per cent to 2029-30,” said Alcoa. Its submission noted it employs 4500 Australians and paid $255 million in taxes in 2021.
Steel producer BlueScope, which has two facilities governed by the mechanism, said: “The indicative decline rate for safeguard facilities of 3.5 to 6.0 per cent per year proposed in the consultation paper is not a decline rate that BlueScope’s covered facilities could currently achieve economically and with current technologies in the period to 2030.”
BlueScope is preparing to build components for wind turbines in a first for NSW. Its submission said it employs 6700 people in Australia, including 3500 at the Port Kembla steelworks.
Paper and packaging maker Opal, which has one facility under the safeguard, said: “We do not currently see a feasible pathway to achieve a step change reduction in our … emissions intensity, which is predominantly driven by the combustion of natural gas, before 2030.”
By contrast, submissions from Sydney teal independent MP Zali Steggall and activist lobby group GetUp! argued for emissions decline rates of seven per cent.
The Minerals Council of Australia told the consultation process that “the proposed changes to the safeguard mechanism make the market attractive to speculators because unlike other carbon markets, the safeguard mechanism has no upside price risk controls.”
The council said its modelling showed a looming shortage of “Australian carbon credit units”, which are used as offsets under the mechanism. Financial speculators could buy up carbon credit units, the council said.
“Speculators stand to make considerable financial gains at the expense of safeguard mechanism facilities, negatively impacting competitiveness and potentially leading to leakage” of emissions to other countries, the council said.
In response to detailed questions about the submissions, Climate Change and Energy Minister Chris Bowen’s office said it believed no facility would close as a result of the reform, adding that it is “recommended by the business community, including the Business Council of Australia and Australian Industry Group.”
