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

I move:

That the Energy Efficiency Opportunities Amendment Regulations 2009 (No. 1), as contained in Select Legislative Instrument 2009 No. 119 and made under the Energy Efficiency Opportunities Act 2006, be disallowed.

The reason I am moving this motion is that, when this exemption was first granted, neither the government nor the coalition explained why it was necessary, and in fact why it continued, or why the Labor government now would continue the exemption. For the benefit of the Senate, the Energy Efficiency Opportunities Act 2006 established the Energy Efficiency Opportunities Program. It required energy efficiency opportunities to be assessed in companies that used in excess of 0.5 petajoules of energy and that they had to report on the energy efficiency opportunities they identified.

At the time I pointed out that the big problem here was that they only had to identify the opportunities and they did not actually have to implement any of the opportunities they identified. At the time I moved to say that the energy efficiency opportunities that they identified had to be implemented and implemented in a phased in way so that those that could show returns within two years be implemented immediately and phased in over a period of time.

I also moved that the threshold of 0.5 petajoules should be lowered over time so as to increase the number of companies that were required to report. However, the government and the coalition both opposed both the implementation of the energy efficiency opportunities so identified and opposed the increase, if you like, in the ability to capture companies and require them to report on their energy efficiency opportunities. But at the time, as I indicated, the Howard government of the day decided to exempt those companies whose main activities were in electricity generation, electricity and gas transmission or electricity and gas distribution from the act under section 7. That become operational once the regulations were struck in 2006.

There has never been anything substantive, in the explanatory material accompanying the then bill or in the parliamentary debate, about the rationale for the exemption. In the explanatory statement to the 2006 regulations there was this comment: ‘The exemption is intended to allow a review to be undertaken of how energy efficiency be most effectively be improved in these sectors.’ So in 2006 they were exempted, pending a review about how these sectors might contribute to energy efficiency. It appears to me that zero, zilch, nothing was done. This was simply the polluters turning up to the Howard government and saying, ‘We want to be exempted from having to identify energy efficiency opportunities in our sector.’ That exemption has applied from 2006 to 2009. Where is the substantive review that was supposed to have occurred?

In November 2008 the Commonwealth Department of Resources, Energy and Tourism issued a short consultation paper on the future of the exemption. Relevantly, the paper stated:

Energy is used in many ways within the sub-sectors of the stationary energy supply industry. Therefore, the potential for increased efficiency will vary; and this means that the costs and benefits of potentially bringing the industry into the EEO program will need to be analysed at the sub-sector level. Different approaches may be appropriate for different sub-sectors. To facilitate this sub-sector analysis, the Department is seeking submissions from stakeholders on the future of the exemption, and whether EEO or some other approach to improving energy efficiency would be most appropriate for the sector as a whole or the various sub-sectors.

According to the consultation paper, because the stationary energy sector consists of many different activities—as in generation, transmission and distribution—it is not efficient to apply the same standard blindly across the sector. The consultation paper also suggests that the costs embedded in existing infrastructure make it difficult to retrofit energy efficiency measures, especially since down time is not an option. It goes on to say that different approaches will need to be employed.

But the point that I make here is this: who did they consult with? Surprise, surprise: when you have a look at who they consulted with, it is the Australian Pipeline Industry, the Energy Networks Association, the Energy Supply Association, Ergon Energy, Horizon Power, United Energy Distribution, Verve Energy and so on. They consulted the stakeholders—the very people who had benefited from the exemption for three years and who wanted their exemption to continue. The effect of the current regulations is to extend their exemption—to maintain the status quo—for four years beyond the current expiry date, until the end of June 2013. So from 2006 to June 2013, these big energy generators, transmitters et cetera are exempted from even having to identify the energy efficiency opportunities that may be available in these businesses. That is extraordinary, and there is no rationale for it.

What did the government say after its consultation with the people who have benefited from the exemption, who surprisingly said that they wanted the exemption to continue? These are the very people who are crying poor and running round the country saying that things cannot be done in relation to climate change. But what they know can be done is to get an exemption from having to even identify—not implement, just identify—energy efficiency opportunities. There is a thought: in moving to a low-carbon economy, these big energy generators might be asked to do their bit in even identifying energy efficiency opportunities. But that has not happened.

There is also mention of the Generator Efficiency Standards program, which is a voluntary program for electricity generators under the Greenhouse Challenge program. The government stated that because the Generator Efficiency Standards program and the Energy Efficiency Opportunities program had some complementary they were looked at under the Wilkins review. But the review’s recommendations were pending at that time, so it is not clear whether it was felt that the generators were excluded because of an overlap. There is nothing clear about this at all except that the industries concerned were desperate to stay exempted and the government gave into them.

The review papers, foreshadowed at that time, of the 2006 regulations seem to have been there as an original rationale. But that review, as I indicated, did not ever take place in that three-year period. There was rushed consultation at the end of last year and—surprise, surprise—they want to continue their exemption. The government is trying to suggest that, because there have been various developments in climate change policy since then, including the proposed Carbon Pollution Reduction Scheme, there might be significant additional considerations for the future of the exemption. But they had no prominence back in 2006 when the regulations were enacted and, whilst that remains the sentiment in the current regulations, the fact of the matter is that the introduction of the Carbon Pollution Reduction Scheme and all the considerations for business apply to all businesses, not just these ones. So why should you exempt a small sector from having to go through this measure when you have got other companies having to comply with the Energy Efficiency Opportunities Act and also having to prepare for the coming in of the Carbon Pollution Reduction Scheme?

I am very keen for the government to explain to me why nothing was done between 2006 and November last year. Where is the review? Why was it not undertaken? Why in this review was the stakeholder consultation limited just to the people who got the exemption? Why is it that they need to have the exemption continued for them because of the Carbon Pollution Reduction Scheme, but for other businesses that are forced to comply with the Energy Efficiency Opportunities Act it does not seem to matter that they have the same obligations pending under the CPRS.

Of course, the submissions received from the people who currently have the exemption strongly supported the continuation of the current exemption. The review that was carried out—the small one that I mentioned—examined industry sectors and looked at how they are affected by a broader climate change policy and market and regulatory environments. The argument is that an extension of the exemption will allow time for broader climate change measures to be implemented—over another four years of this exemption, I might add—and that evidence of encouraging energy efficiency improvement in the energy supply industry might become available in that time. Really, there is no justification whatsoever for this continued exemption from the Energy Efficiency Opportunities Act.

Let me reiterate what this would do. It is asking these companies who are involved in these particular sectors—as I indicated, the electricity generation, electricity and gas transmission and electricity and gas distribution sectors—to identify the energy efficiency opportunities that they may be able to see in their operations. They are not being asked to implement them. I think that is wrong; nevertheless, they are not being asked to. All they are being asked to do is identify them, and they are saying, ‘No, we don’t want to do that.’ These are the companies that run around with their social responsibility notices in their annual reports. These are the ones who say: ‘Yes, we must have action on climate change, but not us. We must be exempted because it’s all too difficult for us, but other people should do it—yes, that’s a very good idea.’ There is no justification for this. In a world that has to address climate change, a world in which we need to bring down our greenhouse gas emissions, a world in which we know that energy efficiency is the low hanging fruit—that is the area where you can make big changes first—why would you exempt these sectors from having to identify the energy efficiency opportunities?

I will be very interested to hear from the government, firstly, their excuse for why it took until November last year for the idea of a review to be just abandoned and whether that was just an excuse in the first place to get them the exemption and then forget about it; secondly, when they had their consultation, why it was so narrow a consultation, referring only to the people who benefited from the exemption; and, thirdly, with this exemption, what the government intend to do to get this sector to do something about energy efficiency. There is nothing in any program that the government have got to drive energy efficiency in these sectors. What is the policy lever that the government are going to apply?

The community is getting pretty sick of the fact that the big polluters in Australia are exempted, sandbagged, by the government. They were under the renewable energy target and they have been exempted from having to buy renewable energy. Now we are exempting them from even identifying energy efficiency. At the same time, we will have the Minister for Climate Change and Water and the Prime Minister out there telling everybody that energy efficiency is something that should be encouraged, even though we know that the biggest difference is the scale of opportunity. The potential for savings is massive with these huge energy users, generators and distributors. In fact, the Energetics report said that the savings equivalent in this energy efficiency opportunities legislation as it currently stands—the potential for the ones that have been identified—are 4.7 million tonnes of CO2 per year, which is equivalent to the annual emissions produced by nearly 700,000 average residential homes or just over a million passenger vehicles. This is already identified under this scheme, not by these ones who have been exempted but by others. So you have got a situation where the companies that had to report under energy efficiency have the potential to reduce greenhouse gases by 4.7 million tonnes, but they are not doing it because they are not required to do it, even though it has been identified that they could if they were made to. Then you have got this whole other big sector exempted altogether from even having to identify the energy efficiency opportunities.

I am looking forward to the government giving me the rationale for why we should continue to reward the polluters. There is a principle of polluter pays; there is a principle that energy efficiency is the low-hanging fruit. There have been years since 2006 to address this sector, and it has not happened. There is no proposal that it be addressed until 2013, and global emissions have to peak and come down by 2015. I am looking forward to hearing the government and the coalition explain to me why these companies need to continue to be exempted when there has been no rationale for it whatsoever presented by the government or the coalition when it was in government, which was when the exemption that is now being extended by the Labor government was first introduced.