Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Hansard source

Obviously these were amendments under debate immediately prior to question time and we heard from the minister immediately prior to question time. Unfortunately what we heard from Minister Ludwig was one of those wonderful contri­butions that goes something along the lines of, 'Trust us, we will work it out a little bit later.' This was basically his contribution in a nutshell: 'Yes, we are having discussions. We acknowledge there is a problem that needs to be addressed. We are working to find a way to address it'—the minister suggested it might take about a month to come up with that solution—'but we would be most appreciative if you would pass the bill in the meantime.' Unfortunately the 'Trust us, we'll fix it later' approach to government is something that we have come to be extraordinarily wary of when it comes to this government. We do not think that they can be trusted to sort things out later. Senator Xenophon and the coalition have worked together to put forward amendments to deal with issues particularly faced by the landfill gas sector because we want to know that there is going to be a solution. We also want to know that that solution will be in cast iron terms and acceptable, to make sure that we do not have the type of perverse outcomes that we have talked about previously.

As I highlighted with a prior amendment, this amendment is one that particularly relates to the flow-on effects of the cessation of operation of the New South Wales Greenhouse Gas Abatement Scheme and how the Carbon Farming Initiative provides a capacity to pick up from there when that scheme ceases operation. The GGAS has driven landfill gas collection and CO2 abate­ment from the waste sector quite effectively. The electricity generation projects built under that scheme, as well as under the Commonwealth's Greenhouse Friendly scheme, have been reliant upon income from offset credits. GGAS will cease at the point of a carbon price coming in and we are advised that without that type of credit support a number of these projects have the potential to become quite unviable. That is why we think that it is so important that we make sure that the viability of these projects is guaranteed and that they are secured for the future, wherever they are.

The Carbon Farming Initiative, as proposed by the government, could be a possible solution to this but unfortunately it is currently not. It does not do enough to ensure that those who went in early and did their best to capture emissions and do something constructive with them by generating electricity are not disadvantaged. We do not want to end up with the perverse outcome of having a government implement­ing a scheme that is designed and intended to ensure that we get a growth in emission abatement activities, but instead we risk seeing the possibility that the early mover advantage is lost and they cease those abatement activities. The Carbon Farming Initiative offset credits could and should be used in lieu of the credits that these schemes have previously relied upon. That is what we would hope to achieve out of the amend­ments that Senator Xenophon and the coalition have pursued. GGAS landfill projects are not, of course, specifically identified on the positive list, and a number of them are required to collect some gas, under their EPA licences, for odour control and safety. Under the bill as it is proposed, projects must be on the positive list, or not be required by law, and may have a baseline applied. Industry is concerned that this creates uncertainty, given questions as to how much gas must be collected by law, about whether they may in fact be excluded from the CFI and, if not, what the accepted baseline is that will be applied. We have attempted to address those issues in the amendments that have been put forward. To resolve this, it has been suggested that these landfill gas projects be added, with a standardised baseline to cover off these issues, so that they can continue with some certainty and continue to operate commercially and effectively.

The landfill gas industry is important and it is significant. In 2009, waste in landfills generated total emissions of 15½ million-plus tonnes of CO2 equivalent, of which around 4½ million were recovered. That is a good, positive effect and it shows a baseline around 29 per cent. However, industry is concerned about whether that is a fair or effective indication of common practice, especially because a large proportion of the abatement was due to GGAS and GHF landfill gas projects. Those GGAS landfill gas projects, I am advised, accounted for abatement of around 3.3 million tonnes of CO2 equivalent, or more than 20 per cent of landfill emissions in 2009. It has been estimated that GHF, Greenhouse Friendly, landfill gas projects accounted for abatement of around 700,000 tonnes of CO2 equivalent. So when you take out the GGAS and GHF, Greenhouse Friendly, projects the raw baseline number of existing activity is reduced to below five per cent, on these sums.

The industry concede they do not see that as a realistic baseline and acknowledge that some abatement that would have occurred from these other incentive schemes would have occurred in any event for other reasons. They argue that a 10 per cent national baseline for GGAS landfill projects would be realistic. We have set out some figures in these amendments that set dual standards dealing with the different schemes that have been in operation to date. Given the proven nature of the technology involved here and the activities that are underway, and given of course the reliability of the existing schemes and the manner in which they have been built up—they have been voluntarily entered into and have had significant investments made in them; not unreasonably, as a result of the incentives that were there—it is important to make sure that they are accommodated under the Carbon Farming Initiative. I know the minister gave some assurances that they would be but, as I said before, assurances, promises and 'she'll be right, mate' type commitments do not quite cut it anymore. We want to know that there is an agreement in place that provides certainty for these facilities, whether they are the facilities in Bendigo or Ballarat, the facilities in Tweed shire or Newcastle, or the facility in Launceston—facilities, I am told, that could be jeopardised if we get this wrong. From those landfill sites we would then see increased emissions escaping and have the perverse outcome that in passing this and getting it wrong we have actually increased emissions in parts of the economy. That would make absolutely no sense to anybody. I think everybody in the chamber who has spoken on this to date has agreed that that type of outcome would make no sense. Senator Xenophon and the coalition are attempting to prescribe a solution to ensure that that would not be the case. We think that getting a solution in the legislation in the here and now is the best way to take this forward.

We are pleased that Senator Milne and the Greens have acknowledged that there needs to be a solution and we are pleased that the government have acknowledged that there needs to be a solution. The concern, though, is that the government have to date failed to provide any reassurance to the parliament on what that solution will be and how it will be applied and, importantly, failed to provide reassurance to industry to make sure they are confident in and comfortable about the manner in which this will move ahead.

So I would leave the challenge there for the minister. We would hope to get something far more certain than the words he uttered before question time on this matter. If we do not, we will certainly be persevering with this amendment. Obviously, unless we proceed very quickly through this, he will have at least an extra couple of days to come up with something that provides all parties—and I would trust that Senator Xenophon and the Greens feel likewise—with a lot more confidence that a solution is there than what he has said to date.