Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

It is obvious that Senator Abetz did not actually read the Senate committee report on this. What is interesting is that some of the large aluminium sectors in their annual reports do not even note the impact of the government’s legislation in terms of their operations. I did not hear Senator Abetz name the aluminium smelters that are going to close down around the country. I have not heard them say they will close down. Of course they are rushing around here wanting more, but they are not saying that.

The 2008 annual report from ALCOA this year makes only general comments relating to the risks posed by climate change regulations and does not foreshadow facility closures or job losses in Australia. That is a funny thing, Senator Abetz—if ALCOA were so worried about it, why didn’t they mention it in their annual report? Why didn’t they threaten to shut down around Australia? Rio Tinto Alcan’s annual report for 2008, published early in 2009, noted that production had fallen by 450,000 tonnes per annum, attributable largely to the impact of the economic downturn. Despite this, the report contained the following assessment by Mr Tom Albanese, chief executive:

The fundamentals of the aluminium industry nevertheless remain strong. Higher energy costs are raising the aluminium cost curve, particularly in China, to the advantage of lower cost producers like Rio Tinto Alcan.

Dr Liu did explain when that report was made that Mr Albanese was referring to Rio Tinto Alcan’s global operations, which include Canadian assets using hydropower, not specifically to their Australian operations.

The point I was making that Senator Abetz clearly did not understand—unlike, I am sure, the minister because she has followed this debate—was on the issue of the wholesale pool price. Senator Abetz clearly does not understand that issue. I note that ROAM Consulting said:

Increasing REC generation will depress pool prices below base case levels … the reduction in pool prices will be offset by the cost of RECs to the retailers (due to the necessity of meeting the expanded MRET—

or mandatory renewable energy target. So here you have ROAM Consulting saying increasing renewable energy will depress pool prices. As I indicated, the Business Council of Australia said:

Although retail prices are higher under the RET scheme (due to the obligation on retailers to surrender RECs), wholesale prices are lower, as … renewable generators typically have low marginal costs, and also because they receive a REC revenue “subsidy” that lowers the revenue they require from the energy market to justify their investment.

I am really keen to know from the minister why these industries are trade exposed and with which countries. In view of the fact that all these places have renewable energy targets, I want to know why we are exempting them when in the future their competitive advantage depends on having a large baseload supply of renewables. I also want to know, Minister, why you would want to give them a windfall gain and, if you would not, whether you will support the amendment to say that they must not get a windfall gain as a result of these exemptions if the pool prices fall in the way that is expected. If you believe they will not get a windfall gain then there is no problem with you voting for it—it is not going to happen, apparently. I will be very interested to hear what the minister has to say, particularly on the pool price issue.