Talks between the coal industry and the government have ended in deadlock, with key coal representatives telling the government they cannot accept the industry compensation package on the table and Climate Change Minister Greg Combet sticking to his position.
In the meeting in Canberra yesterday, the coal industry argued for a phased-in approach to the auctioning of emissions permits and the staged inclusion of so-called fugitive emissions (the release of greenhouse gasses during the mining process).
In a submission to the government, the Australian Coal Association argued: “It is perplexing that the government has arrived at variations on its old proposals previously shown to deter investment, reduce Australian competitiveness and destroy Australian jobs in favour of enhanced opportunities for overseas competitors for no environmental gain.”
The car industry, meanwhile, warned that the cost of the current scheme, even after assistance arrangements based on the criteria developed for Kevin Rudd’s carbon pollution reduction scheme, would cost the industry between $30 million and $46 million a year. A failure to offset increased costs would adversely affect the ability of the automotive industry to attract future international investment and to sustain jobs. It could also lead to car-makers increasingly sourcing components from overseas.
The Federal Chamber of Automotive Industries and the Federation of Automotive Product Manufacturers, which represent component makers, said eventual carbon costs could exceed $400m over the next decade, undermining the viability of the industry.
Australian Coal Association president John Pegler told The Australian yesterday: “We need a circuit-breaker on this issue and that could be done if the government accepts that we move forward on emissions trading or carbon pricing in a way that is in concert with major competitors.
“We are really saying: ‘Look, the CPRS as designed and we are seeing a rebirth of it … it really isn’t going to work for this industry and we would think for most other trade-exposed industries’,” Mr Pegler said.
Climate Change Minister Greg Combet said the government was committed to working with the car industry and recognised that the coal industry “is a vital part of our economy”.
“It should be pointed out that under the Carbon Pollution Reduction Scheme, the average carbon cost for methane emissions for each tonne of coal mined was less than 1 per cent of the average selling price of a tonne of coal,” Mr Combet said.
The Australian Industry Greenhouse Network, which represents 90 per cent of emissions, has called for 100 per cent-emissions permits that are allocated to all trade-exposed industries and that there is no reduction in permit allocation until at least 80 per cent of relevant competitors had introduced comparable carbon prices.
