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AWU calls for heavy industry’s energy providers to be included in safeguard mechanism

February 8, 2023

Australian heavy industries could collapse if conservation and clean-energy groups have their way and block fossil fuel companies from accessing carbon offsets under Labor’s tougher safeguard mechanism, according to the AWU.

The safeguard mechanism is part of a federal plan that will force the nation’s 215 biggest-emitting facilities to slash pollution by nearly 5 per cent each year to 2030.

It sits alongside other schemes including the Emissions Reduction Fund, which buys carbon credits and encourages projects that will remove or cut carbon.

Carbon credits can also be purchased by the facilities captured under the safeguard mechanism to help them meet their emissions reduction obligations.

In a joint submission to a Senate inquiry into Labor’s safeguard mechanism amendments, the Australian Workers’ Union (AWU) and Mining and Energy Union (MEU) say the mechanism must include these carbon credit unit offsets, and safeguard credits for fossil fuel industries to help their transition and avoid carbon leakage.


AWU National Secretary Dan Walton said commentary suggesting fossil fuel projects should be excluded from the use of carbon offsets or otherwise treated differently from safeguard facilities was misguided.

Greens leader Adam Bandt wants all new coal and gas projects scrapped in return for his support in the Senate, while the Australian Conservation Foundation says coal and gas facilities should not have access to carbon credits and be excluded from a $600 million fund supporting their low-emissions transition.

“They are failing to recognise that Australian coal and natural gas have a role to play in the world’s transition to lower emissions,” Mr Walton said.

“With alternative steelmaking technologies still yet to reach commercial availability, Australian metallurgical coal will remain essential globally for decades to come.

“And for countries transitioning from gas to coal power, gas turbines produce roughly a third of the equivalent in brown-coal generation.”

Mr Walton said the updated safeguard mechanism, due to start in July, was the most significant energy policy imposed on heavy industry since the now-repealed carbon pricing mechanism.

The safeguard mechanism would have a significant impact on industrial facilities that underpin regional economies.

“Australia’s heavy industries continue to provide good pay and conditions to thousands of people across the country, and our members are keen to play a role in supporting Australia through the energy transition,” Mr Walton said.

“A successful transition of Australia’s industrial sector also has the opportunity to place Australia as a clean-energy superpower, creating new job opportunities for coal workers and across the broader economy.

“By contrast, a poor transition that fails to consider Australia’s international competitiveness could see our industries collapse.”


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