Upper management of Adbri and Boral have shared concerns that the Federal Government needs to increase protections for local cement manufacturers under the safeguard mechanism, to protect jobs within Australia.
The safeguard mechanism on the 215 highest emitters in Australia have been reported to potentially become a handicap on Australian manufacturers, which would potentially result in the loss of jobs and the transfer of carbon emissions to other markets.
Vik Bansal, chief executive officer of Boral, said a carbon border adjustment would help ensure that local manufacturers could compete with rivals from other countries, who typically do not have an equivalent measure to the Australian safeguard.
Without that, Bansal spoke of a possibility that carbon emissions would instead simply be shifted overseas, as more cement is imported into Australia, due to the lower cost of doing so under the safeguards.
“We need to ensure local manufacturers remain competitive and there’s no carbon leakage or bleed that occurs with importation of materials from countries with lower environmental standards.”
Boral and Adbri are both in the list of 215 companies that have been included in the Federal Government’s safeguard mechanism legislation agreed with the Greens last week.
One of the central clauses of the deal, includes the Labor Government legislating an intent to cut annual emissions from the country’s top 215 polluters from 140 million tonnes to 100 million tonnes by 2030.
The deal additionally includes details to support the transition of industries – which includes cement, steel and aluminium- to decarbonise, with between $600 million to $1 billion promised to aid businesses implement decarbonisation technology.
Cement producer are some of the businesses able to buy carbon offsets to aid in cutting baseline emissions.
Speed was important in bringing in a level playing field so that local cement manufacturers are not disadvantaged, Adbri chief executive Mark Irwin said.
Adbri has four cement plants in Australia and the group’s Birkenhead plant in Adelaide, which employs 300 people and has been in operation since 1914, is considered most at risk with this recent announcement.
“A carbon border adjustment mechanism would preserve manufacturing jobs in Australia and also minimise the risk of carbon leakage,” Irwin said.
“We hope that the government and the opposition can work together to implement a carbon border adjustment mechanism as soon as possible for sectors such as ours.”
Adbri has shown support to the government, through the decision to lift funding for industry transition support to $1 billion.
“While we appreciate the passage of the safeguard mechanism, we’re also urging the government to move with pace on its review into a carbon border adjustment mechanism,” Bansal said.
“This will ensure a level playing field for domestic manufacturers who are committed to decarbonisation.”