Uncertainty still surrounds the government’s planned safeguard mechanism, with a key crossbench senator indicating he still has concerns with the scheme.
Ahead of the release of a parliamentary inquiry report into the safeguard mechanism, independent senator David Pocock said limits needed to be placed on heavy industries offsetting their emissions.
The government’s proposed mechanism would see the emissions of the biggest 215 polluters capped.
Companies that breach the limit would be forced to buy carbon offset credits or trade their emissions with other firms.
While Senator Pocock said he was not totally against the safeguard mechanism, he wanted to see further changes to ensure the scheme’s success.
“As it stands, we will join Kazakhstan as the only two countries in the world that allow 100 per cent of emissions to be offset using carbon credits,” he told ABC Radio.
“I’m not approaching this with red lines, I want to make sure that this policy is as good as it can be that it will deliver the reductions that we need.”
In order for the mechanism legislation to pass the upper house, the government will need the support of the Greens plus two crossbenchers.
The concerns over the mechanism coincide with new modelling released that show the emissions budget was at risk of blowing out.
The modelling carried out by the firm RepuTex for the Climate Council and Australian Conservation Foundation showed emissions from 16 new coal and gas projects would be about 25 per cent of what the mechanism would aim to reduce.
While companies would be required to reduce emissions by 4.9 per cent each year until 2030 under the mechanism, modelling has shown declines of 8.9 per cent may be needed by the end of the decade to keep within the emissions budget.
The Climate Council’s head of advocacy Jennifer Rayner said the modelling showed further work was needed to be done to fine tune the mechanism.
“If we don’t get the settings right, new coal and gas will eat a large and growing share of the safeguard mechanism’s emissions budget in the years ahead,” Dr Rayner said.
“Worse, if the production of coal and gas is even a little higher than the government has predicted, this risks blowing the carbon budget entirely.”
Dr Rayner said the projections were carried out before a possible 100 further fossil fuel projects under development were taken into account.
“Either this would mean Australia fails to meet out 2030 emissions reduction target, or existing facilities would have to cut their emissions by far more to make up the gap. There’s only two ways this can go.”
Senator Pocock said a key concern of the mechanism was that industries such as steel, aluminium and cement would be placed in the same category as fossil fuels.
“We’re designing it in a way that those steel, aluminium and cement are going to have to be competing with potentially new fossil fuel projects, new gas projects that are going to want to offset their emissions,” he said.
“While in in principle, this is something that we need, we’ve got to get this right.”
– AAP
