Senate debates
Monday, 30 November 2009
Carbon Pollution Reduction Scheme Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 [No. 2]; Australian Climate Change Regulatory Authority Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Customs) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — Excise) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (Charges — General) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009 [No. 2]; Excise Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Customs Tariff Amendment (Carbon Pollution Reduction Scheme) Bill 2009 [No. 2]; Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009 [No. 2]
In Committee
9:30 pm
Julian McGauran (Victoria, National Party) Share this | Hansard source
On this issue, I would like to raise the concern of the aluminium industry from my state of Victoria. I believe it is relevant. I certainly hope the minister does not give me short shrift like she gave Senator Joyce. In regard to the aluminium industry of Victoria, the government scheme purports to assist large energy users of over 2,000 gigawatts per hour of electricity. It provides certificates for large energy users whose energy source emits up to one tonne of CO2 per megawatt hour—very technical. That is the default electricity allocation.
However, the scheme affects the viability of the aluminium industry in a unique way. For the record, as the minister and the advisers would well know, the Victorian aluminium industry depends on the coal fired power generators. The industry just eats electricity. It is probably the largest user of brown coal generators in Australia—located in the Latrobe Valley—using 1.25 to 1.6 CO2 megawatts per hour. Therefore, the aluminium industry is adversely affected by the one tonne default electricity allocation factor, known as the EAF. This disadvantage is known to the government, I believe, and the government have therefore, under the existing contracts—the ones already in place—made an exception. But what concerns the industry is that, once those contracts run out, there will be no certainty. They will have to pay over and above the one tonne CO2 MWH, megawatts per hour—the benchmark, if you like, to keep it simple. They will have to pay anything over that. That will be passed on to them by the brown coal fired generators from the Latrobe Valley—0.25 to 0.6 CO2 megawatts per hour will be passed on to them.
This is in my state of Victoria, where Alcoa have aluminium plants at Geelong and Portland, essential to the economies of both regional towns, providing employment by the thousands. They have calculated that that will affect their bottom line by $40 million. If that is the result, that will be unsustainable for Victoria’s largest exporter, Alcoa, and yet they cannot get certainty from the government. So my question to the minister is: what certainty can you provide the industry once the current contracts run out?
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