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TMEC seeks assurance Tasmania will not be harmed by Federal decarbonisation policies

Monday May 2, 2022

The Tasmanian Minerals, Manufacturing and Energy Council (TMEC) has amongst its members major industrials and employers who are exposed to the nation’s decarbonisation legislation. Understanding the consequences of the policies of both major parties needs to be considered in light this sector accounts for nearly 65% of Tasmania’s exports.

TMEC member companies are amongst the lowest greenhouse gas emitters globally by virtue of the renewable energy used in Tasmanian mining, mineral processing, and manufacturing. Further to this, TMEC is supportive of goals to further decarbonise these industries. Tasmania has businesses in this sector who are busily solving the technical issues which will enable an even lower carbon footprint.

When there is debate, it is mostly with the options available today or what is speculated will be available to decarbonise.

TMEC’s CEO, Ray Mostogl said, “It would be safe to say 90 percent plus of the population want to see carbon emissions reduce, but probably only a very small percentage of the population understand the intricacies and interrelationships in decarbonising an economy and preserving all other elements of today’s society”. Ray went on to say, “The details within the Federal Government policies are critical as any unintended consequences could wipe out a substantial part of Tasmania’s economy. Given we are today one of the lowest carbon jurisdictions in the world, to be harmed by poor carbon policy would be absolute madness”.

The current Commonwealth legislation has a “Safeguard Mechanism” in place to monitor emissions from all entities which exceed a specified threshold of CO2-e (carbon dioxide equivalence) emissions per year. Under this scheme, the Federal Liberal Government forecast a 30% reduction by 2030. Federal Labor modelling forecasts a 43% reduction by 2030. These are interim objectives on the pathway to net-zero by 2050.

What is behind this difference?

Which additional interstate emitters will show they have moved from coal-fired electricity to renewable electricity?

Which additional emitters are indicating the current chemical reduction processes, typical of most mineral processing will have new technology and this emits less greenhouse gas or zero greenhouse gas?

Will the nation move to electric, or hydrogen-powered transport faster?

Federal Labor have given TMEC assurance its forecasts of business closures because of decarbonisation is no different to the current Governments projections of decarbonisation related business closures eg. coal-based power stations closing.

Labor’s policy, which incorporates recommendations from some business groups, suggests a business-by-business visit by the Regulator will potentially identify further opportunities amongst the emitters above the same threshold.

Labor’s policy does indicate this process will consider what is technically available to the business as well as 1 May 2022 whether it is trade exposed. This undertaking suggests the policy will not change the international competitiveness of an exporter. This seems sensible and effectively replicates the decision-making process boards and businesses are faced with today.

Both parties indicate funding will be available to apply decarbonisation technologies when they become commercially viable.

TMEC’s CEO said, “Assuming the Liberals are retaining the scheme as it is, and Labor has additional processes, but which replicate the internal process in use today, where is Labor’s extra 13% in reduced emissions coming from?

Particularly given the claim no additional businesses will close because of being unable to afford the new technology when it becomes available”. Ray went on to say, “TMEC is seeking assurances from both major parties their respective policies will not be the cause for why any of Tasmania’s major industrials may close during the next term of Parliament”.