Gavin Pearce (Braddon, Liberal Party, Shadow Assistant Minister for Health, Aged Care and Indigenous Health Services) Share this | Link to this | Hansard source

If the recent supply chain disruptions during the COVID-19 pandemic and the evolving geopolitical tensions that we're seeing in the Indo-Pacific region have highlighted anything, it's that sovereign risk associated with the loss of local manufacturing is ever present. Cement production is an important part of that. Cement is, of course, the key ingredient of concrete, and concrete is a critical material that underpins our residential and commercial construction industry. If you're talking about nation-building projects—if you're talking about anything to do with the construction industry—then you're talking about cement and concrete. Concrete is the most consumed human-made material in the world and will continue to be crucial in supporting a modern decarbonised world. Without cement and concrete there would be no dams, no bridges, no wind turbines, no hospitals, no apartment blocks, no offices, no schools—and on and on it goes. Even this place is made of good old concrete.

Lime is also an essential product when it comes to this critical industry. It's used for a number of environmental and industrial applications, including the refinement of critical minerals and as a purifying agent that allows Australians to have clean drinking water. And, of course, lime is an essential part of managing soil pH in our agricultural soils and improving the soil biome in order to grow the nation's food.

Cement and lime are critical to Australia's sovereign capability, but the Safeguard Mechanism (Crediting) Amendment Bill 2022, as it stands, is putting those sectors in jeopardy. What makes the Australian cement and lime industry unique is that 100 per cent of what's manufactured in Australia is used in Australia. But it's also an import-competitive industry. This means that our cement industry directly competes with imported goods. This is basic Business 101, but it's obviously beyond the Albanese government. For the cement and lime sector to remain competitive, to remain viable, the cost of manufacturing domestic clinker cement and lime cannot be higher than the landed imported price. This means that this legislation, which is proposing a mechanism that imposes a cost on domestic manufacturing that is not imposed on the imported product, is going to create an incentive for the production of cement and lime offshore. Let's be clear: in putting forward this legislation, the Albanese government is saying that it wants to shut down our local cement and lime production to support overseas companies and to force us to rely on imported materials.

I cannot believe what I'm seeing in this bill. It's not as if the cement sector isn't moving towards decarbonisation all by itself. Since 1990, the emissions arising from the cement sector have been reduced, by the industry itself, by 25 per cent. That's a fantastic achievement, and we should be celebrating it, not demonising it. Despite cement and lime being classified as one of the most difficult-to-abate sectors, the industry is 100 per cent committed to decarbonising its products by 2050. However, the number of decarbonisation pathways available during the next decade presents the real challenge for this industry. This is because the technologies required are currently not viable in Australia.

Around two-thirds of cement scope 1 emissions—that is, emissions that are sourced from their own and direct control—cannot be addressed until technology such as carbon capture, use and storage, hydrogen and oxyfuelling become viable technologies in Australia, along with the associated infrastructure and transport requirements. So, to me, the solution is to support the industry not demonise it to the extent that this bill does. Unlike Labor, we in the opposition know that we have to be right behind our industries, and cement is certainly one industry that has our back. They have our confidence.

We'll continue to invest in this crucial sector over the next two decades. These technologies will support the cement industry to fully decarbonise that over time. It's a win-win: a win for the environment and our need to decarbonise the industry and secure the future of cement and lime, like our Railton plant, on the north-west coast of Tasmania, and its continuance for the next 100 years. What the sector needs from government is long-term assurity, over-the-horizon market indicators. But, again, 'Business 101'—they're not seeing it in this bill.

For the cement industry to invest significant capital in new processing technologies as well as supply chain components, there must be surety that that market will supply and return a dividend to that investment, and we're not seeing it. This bill before us right now is not doing what's intended. The unintended consequences of this are going to fall at the feet of the cement and lime industry.

Fundamental to each investment decision the industry makes is the degree of certainty associated with key elements such as demand and relevant regulatory settings. The safeguard mechanism must clearly define how domestic production will not be disadvantaged relative to imported product. Only then will the sector have the certainty required to underpin ongoing capital expenditure in what will be required in order to decarbonise the industry.

In conclusion, it is in all our interests to better this, when it comes to reducing emissions. We need to be proactive and aggressive when tackling the challenge of climate change in Australia but we also need to recognise that Australia doesn't live in a bubble. This is a global issue that requires a global response. There is no doubt that Australian industry is onboard to play its part. There's no question in my mind that our large emitters clearly understand the significant responsibility they carry in decarbonising their products in their industries, if we are to meet our emissions reduction benchmarks. But globally they must also be on a level playing field.

Addressing carbon leakage is critical for Australian cement manufacturers and this is not addressed at all in this bill. Australian manufacturing is one of the most trade exposed sectors. Over 40 per cent of clinker is used to produce cement, and that's imported product. Up to 10 per cent of that cement is now being imported already, so we're seeing the signs. The end the nigh. This bill is eroding the international competitiveness of Australian cement and lime facilities, and if Labor continues down this path it is likely that domestic production will, increasingly, be replaced by lower cost imported product with a higher emissions profile. Great Australian companies will close down and we will receive our cement from high-emissions-producing overseas companies.

That's why I'm opposing this bill and that's why the coalition will strongly oppose this bill.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support this Safeguard Mechanism (Crediting) Amendment Bill 2022, and I'd urge all colleagues in this place to support this bill, because this is very important. It is important that we meet our emissions reduction targets, and this safeguard mechanism is central to that policy. Labor made a commitment in opposition, during the campaign, that we would reduce emissions and have targets, and that's what we're doing. We were committed to this. We listened to the electorates. Certainly in the last 10 years, I've heard loud and clear from my electorate that people want a commitment to reduce emissions for the safeguarding of this planet.

We have an absolute duty as members of this parliament, and I've said it many times, to commit to it and to give to the next generation a clean environment that will sustain them for generations to come. I don't want to be asked by my grandchildren in years to come, 'You were in parliament, what did you do about it?' Each and every one of us are going to have to live with that question if we do nothing at this point. So it's a very important bill. I'd urge everyone to support it. I'd urge everyone to think carefully about it and to see that this is so important for the next generation of Australians.

The message was loud and clear from the electorates. We heard it during the campaign. I certainly heard it in my electorate. One of the No. 1 issues was that they wanted reform in this area. It was very unfortunate that for 10 years we saw a government that had umpteen policies in this particular area and none actually came to fruition.

The safeguard reforms are expected to save about 205 million tonnes of emissions in the period to 2030. That's equivalent to, say, two-thirds of Australian cars being off the road in the same period. The naysayers may say, 'Two-thirds of cars off Australian roads? What about other nations that aren't doing anything?' We are one of the highest emitters per capita, in the world, of carbon. If we don't show the way, why would others want to join, when they can point the finger at us and say, 'We are very low emitters. We have a high population. If you're not doing anything as one of the highest emitters in the world, why should we join?' That is why it's so important that Australia takes action on climate change and does deliver on its targets and shows the way for other nations the join.

In the last 10 years there were bills before this House that didn't go through because of a particular minor party that decided to stifle them. Nearly 10 years ago exactly, to the day, there was a policy in place by the then-Labor government that would have seen a reduction of carbon over those last 10 years. We would have seen a reduction in emissions. We absolutely missed the boat because some people wanted it all their way or no way.

I hope that the Greens, this time, see the reality of this and know that we have to start somewhere. It is so important that they jump onboard and support this bill. Because of their actions 10 years ago, there's been no movement in this area. Because of their actions in not passing the bill 10 years ago, we have seen an increase in emissions. That cannot be a good thing for the planet. So I urge people in this place to think carefully about this bill and their responsibility in reducing emissions.

We've seen support for taking action on climate change. We've seen students go out marching in the streets over the last four or five years. What they were marching about—when you think about those children, some were as young as 12. Sure, climate change was an issue but they wanted leadership. They wanted to see some leadership from those people around the world that run governments, especially here in Australia, and by us sitting back and doing nothing we showed no leadership. They were crying out for leadership because it's their future. It's their future that is in jeopardy, not ours.

I can't urge people enough to think about this policy that will make a change. After a decade of delay, a decade of denial and dysfunction, all the opposition have to offer is this half-baked scare campaign that's made up of the same old talking points that we've been hearing for the last 10 years. In fact, I truly believe that most of them still deny that climate change exists. Most of them are still deniers. You have to ask yourself, in a world where we've had the greatest scientific research done by people who are not political and have no Left, Right or whatever—Callithumpians. These are people who look at the science, and that's all you have to look at.

Have a look at the United States, where Joe Biden has brought in the IRA policy, which is an uncapped system assisting firms and companies to go to renewables—billions and billions of dollars. You've got to say the United States is not exactly the bastion of left-wing politics. It's the bastion of capitalism. Most companies around Australia know that their future is in renewables. It was only last week that we were in WA and we went to Fortescue Future Industries. They're spending millions of dollars on research. They were telling us the future is in renewables. If that were not the case, you wouldn't see million-dollar companies, including multinationals, pouring so much money into renewables, trying to find as quickly as possible the quickest solution to not burning coal and emitting gases. They wouldn't be doing it. They have shareholders. They have people who pay money to buy parts in their company. Just thinking of that, you've got to work out in your mind what's best for this nation. Multinational companies know what's in their best interests, and that's why they're developing new safeguard mechanisms that they're putting in place to ensure that they do transition to renewables.

It is a race. It is an absolute race, in the development of the high technology, as to who is going to develop things first, because I've got to tell you the next massive export for this nation will be renewables, whether it be hydrogen or cables, like the ones for which Suncorp and other businesses are working on models right now as we speak. Around the world it is a race to see who can develop more quickly than their competitors. We want this nation to be an exporting superpower in renewables. We want this nation to be one of the first—to be right there at the ground level going upwards when the world does transition, and it's not far off.

This safeguard mechanism covers around 215 large industrial facilities, accounting for around 28 per cent of Australia's emissions. Emissions from covered sectors are among the fastest-growing across the economy and are projected to overtake emissions from the electricity sector without policy action. That's why we require this policy action today. We have to take the politics out of this area. It is one of the most serious things that we are facing as a government, as a nation and internationally. The more we play politics with climate change, the worse it will get. Time is running out, and that's why I urge those opposite and those on the crossbenches to think carefully when they vote on this bill and to support this bill.

The government released the proposed safeguard reforms on 10 January 2023 to impose requirements comparable to the commitments and actions of other countries at the sectoral and whole-of-economy levels. Our reforms would see Australia's largest industrial emitters make a proportionate contribution to meeting our 2030 target by reducing facility baselines by 4.9 per cent each year between 2024 and 2030. That means, on average, safeguard facilities reduce their emissions at the same rate as the rest of Australia's economy so we can meet our targets in 2030. We're committed to reducing national emissions to 43 per cent below 2005 levels by 2030. This government made this commitment and we are going to stick to it—and to net-zero emissions by 2050. These targets are realistic. They're achievable with this mechanism in place. It will take deliberate and sustained effort to meet them, and that's what this bill is all about. Every sector must play a role in this area. The government's Powering Australia plan commits to building on the existing safeguard mechanism to reduce industrial sector emissions. The safeguard mechanism provides a well-established legislative framework that places emissions limits on large industrial facilities. I urge all to support this bill.

Debate adjourned.