The transition assistance levels contained in the Federal Government’s green paper for emissions-intensive, trade-exposed industries are inadequate and inefficient (EITE), Queensland Resources Council chief executive Michael Roche said.
“The assistance measures currently proposed in the Federal Government’s green paper don’t properly take account of the fact that EITE industries are price takers and cannot pass on costs,” Roche said.
“Australia will have a carbon price before any of our major competitors, so operating margins in Australia will come under pressure.
“That is why industry is seeking transition assistance.
“If margins get too thin, operations become unsustainable.”
The QRC recently commissioned a report into emissions trading by consultants ACIL-Tasman which was last week presented to Prime Minister Kevin Rudd, Climate Change Minister Penny Wong and other senior Cabinet Ministers.
According to the QRC, the report drew on up to date financial data and ‘real world’ emissions trading scenarios provided by QRC member companies.
“The mining, smelting and refining operations that contributed to this study are representative of industries that generated around $36 billion of Queensland’s gross state product in 2007-08,” Roche said.
“This is the best picture we have so far of how emissions trading might affect Queensland’s exporters.”
If Australia is to go ahead with an emissions trading scheme before the rest of the world, it needs to be streamlined and its assistance proposals refined in order for it to work better for Queensland mining industries, Roche said.
“We must get this transition assistance right if we are to avoid a drift of energy-intensive industries to countries anticipated to have lower obligations under a global emissions trading scheme,” he said
“Simplicity is the key in helping Queensland industries stay competitive while the rest of the world considers its response to a global emissions trading regime.
“In the QRC’s view, the revised scheme is both better targeted and more efficient, economically and environmentally.”