Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I'm speaking on the Safeguard Mechanism (Crediting) Amendment Bill 2022, and I do so as the representative of some of the people who have the most to lose from poor climate change policy and the most to gain from climate change policy's success when we get it right.

It's first worth going through what the bill does. The bill updates the objectives of the National Greenhouse and Energy Reporting Act 2007 to ensure net aggregate safeguard baselines decline, increasing industry and investor confidence to take action. It allows for the creation of a new unit type called the safeguard mechanism credits. It deals with matters like the issuance, transfer and ownership of the credits from facilities which beat their baselines. Through its use of credits, the bill will create an incentive for facilities to reduce their emissions if they have cost-effective opportunities. By doing so it will help to deliver Australia's climate change targets at lowest cost. The bill also allows rules to be made about interactions between the safeguard mechanism and the Emissions Reduction Fund. In this way it will support the integrity of both the safeguard mechanism and Australian carbon credit units.

The bill, in essence, is about certainty. It'll provide certainty for emitters so that they can plan for the future with a fuller and more stable understanding of their emissions obligations. It'll provide certainty for investors across the broader market, who will know that Australia is once again serious about climate change and that we're pursuing our climate targets at the lowest possible cost. It'll provide certainty for people who go to work every day in our large industrial facilities, and it's on their behalf in particular that I have taken an interest in this bill. Nobody should need any reminding of the importance of the steel industry to Wollongong and the Illawarra region, but I'm going to do it anyway.

From my back balcony at home, I look north across Lake Illawarra and see the stacks and smoke of BlueScope's Port Kembla steelworks. It's the biggest integrated steelworks in Australia and it's my constant reminder of the heritage of the region that I represent. Generations of men and women have made their living at Port Kembla and made a life in the Illawarra. Steel is at the centre of how the rest of Australia sees us, and it's not too much to say that this is central to how we see ourselves.

Right now, there are 3,000 people in the Illawarra who make their living directly from BlueScope's Port Kembla steelworks. That's a big number on its own but it's even bigger when you consider that there are thousands and thousands more who rely on it—suppliers, contractors, service providers and other local businesses—who get a share of the income that the steelworks brings to our region.

I'll also remind the House that steel remains a crucial strategic industry for Australia as we move into a global net zero economy. If we're going to build wind farms, transmission lines and other technology vital to our energy future we need steel. End of story. If you lost the Port Kembla steelworks, then thousands of people in the Illawarra would lose their jobs. With that, Australia would lose all its steelmaking know-how and experience.

Clearly, climate change is a great challenge to the steelmaking industry. BlueScope are the largest industrial carbon emitter in New South Wales. But between the financial year of 2012 and financial year 2022, over that 10-year period, the Port Kembla steelworks reduced its scope 1 emissions by 18 per cent. According to data from the World Steel Association, the Port Kembla steelworks ranks in the best-performing quartile for emissions efficiency of the 65 blast furnace and basic oxygen furnace facilities surveyed globally.

This all paints a picture of a steelmaking process that is carbon emission competitive, by global standards, but it has a way to go if it's going to play its part in reducing its carbon emissions. BlueScope are up to the challenge. They've announced a goal of absolute net zero missions by 2050 for all of its global operations. That overarching goal is supported by two interim emissions intensity targets for 2030. The first is a 30 per cent reduction in greenhouse gas emissions intensity for their non-steelmaking activities. The second is a 12 per cent reduction in greenhouse gas emissions intensity for their global steelmaking operations.

What does this all tell me? It tells me that BlueScope gets it, that they want to do the right thing. They are well aware of their role in our emissions reduction program. They're at the table, in good faith, working to find a way through to a lower emissions future. And the government is sitting across the table discussing these issues and listening. This is the real business of government, listening to understand the challenges and then finding a way through them, with reason and with calm. That's what my colleague the Minister for Climate Change and Energy has done, day in, day out, since the government was elected, and he's done it in a way that those opposite repeatedly showed themselves incapable of doing over the previous eight years.

The opposition's campaign against the bill treats us all like idiots. The bill concludes a process that they started. It was their energy minister, who is now the shadow Treasurer, who proposed it, and they continued it when they accepted the recommendations of the expert panel in 2020. There are things in this bill for which they allocated funding in their very last budget, not 12 months ago. But now they'll oppose it as part of their relentless substitute campaign, their relentless campaign to substitute rhetoric for reality.

People say that the politics of climate change has moved away from the politicians. But let me put this another way: the people have moved away from the coalition and its politics on climate change. The Australian people said so—resoundingly—in May last year. So long as the coalition go on television and talk about the lessons learned from the last election but then come in here and ignore those very same lessons, the people of Australia are going to continue to mark them down.

There is a message here for the Greens as well. Our objective is to decarbonise our economy, not to de-industrialise it. The technology for zero emissions steelmaking does not yet exist. There is hope. Emerging techniques on trial in Sweden and Germany are being piloted, with enormous government subsidies. They're about 10 years away from the large-scale commercial operations that would be necessary. This tells us that, to take the path to decarbonising steel, a credible plan will require a balance of reductions and offsets. Relying heavily on one or the other will undermine our national effort or impose unsustainable cost. The balance is everything. I note the comments of Dr Kerry Schott, who chaired the Energy Security Board from 2018 to 2021. She told the ABC this morning, and repeated the message at the National Press Club later today:

It would be a great shame … it would be really awful if the safeguard mechanism didn't get up.

She's dead right.

We know the board of BlueScope are carefully considering the application of the safeguard mechanism as they approach approval for the blast furnace relining, and it's important that they do so. Our message is clear: we want Australia to be in the steelmaking game and we want BlueScope to be at the forefront of steel manufacturing. Both the Prime Minister and the Minister for Climate Change and Energy have met with BlueScope, and I thank them for that. They have shown a sincere and persistent concern for the issues that have been raised with them. They show an absolute understanding of the people that I represent in this place and that the member for Cunningham represents in this place, and it's founded on an understanding of how important it is for this industry to continue and how important it is to our part of the world.

The design proposed in this bill has a mechanism to adjust baseline decline for trade exposed industries such as steel, and it will offer additional funding support through the Powering the Regions Fund. The bill will also set up a review looking into the risks of carbon leakage for industries such as steel. That review would look at the need for a carbon border adjustment mechanism to complement the safeguard reforms and to help industries like steel and cement. This is important. It will ensure that we support the decarbonisation of critical industries, of which steel is undoubtedly one. The bill sets us on two paths at the same time. One is the path to net zero emissions by 2050; the other is the path to a sustainable, viable, reliable and long-lasting steel industry and manufacturing sector, based in electorates like mine but serving all of Australia. I commend the bill to the House.

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