The Federal Government recently began negotiations with the Federal Opposition on renewable energy policy, proposing that the Renewable Energy Target (RET) be lowered to represent a “real 20 per cent” of electricity production in Australia.
While a 20 per cent target had been the initial intent from the original bipartisan negotiations, declines in electricity use have meant that the current legislated RET of 41,000 gigawatt hours by 2020 actually represents a larger proportion of electricity production – 27 per cent, according to Federal Minister for Industry Ian Macfarlane.
In a media address, Macfarlane indicated that the lowered RET would be in the range of 26,000 to 28,000 gigawatt hours, adding that all energy intensive trade exposed industries as currently defined in the legislation – including cement – would be exempt.
Cement Concrete Aggregates Australia (CCAA) CEO Ken Slattery told Quarry that the CCAA regarded the Federal Government’s proposal as a “sensible move”.
“The real issue around the RET is that it’s a very expensive way to minimise carbon emissions. Estimates we’ve seen from the Business Council of Australia are in the order of $100 per tonne, which is about four times what the old carbon tax was before its repeal,” he explained.
“Currently, no other country that’s importing or has the potential to import cement into Australia is paying this sort of cost around renewable energy. This creates a competitive problem where Australian cement products have a financial burden that imports don’t. If this legislation is passed, it will provide a more level playing field while also helping to avoid future increases in cost imposts on domestically produced products.”
The Opposition was less supportive of the Federal Government’s proposal, with Shadow Treasurer Chris Bowen stating at a press conference, “A 40 per cent cut in the RET – which is what would be a 20 per cent real RET in the language of the [Federal] Government – is completely unacceptable to the Labor Party and we will not agree to it.”
Bowen did indicate, however, that the Opposition was happy to engage constructively with the Federal Government to reach an agreement.
Macfarlane said he was unsure how long the negotiations would take but stated that the new RET legislation was not expected to come into effect until next year.