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AWU members at Qenos under pressure as energy costs set to double in 2023

November 24, 2022

Qenos is Australia’s the only polyethylene and polymer maker. If you see or use plastic such as bottles or cling wrap in your home, chances are it was made by Qenos workers.

It is a big employer, with more than 700 workers in its Melbourne and Sydney plants, and directly contributes more than $1 billion a year to the Australian economy.

But that is all under a cloud now, with its yearly gas bill recently soaring to $70 million and news that it will go to about $150 million next year.

Qenos says its competition comes from gas-rich nations in the Middle East, plus the US Gulf Coast and Asia, where they have an abundance of competitively priced energy.

CEO Stephen Bell says that because of this Qenos can’t pass the cost on as its customers would just jump ship to cheaper overseas competitors.

“We can’t absorb those sorts of cost increases and we have to find a way to to get more competitive energy into the business,” Mr Bell said.

AWU National Secretary Dan Walton says that without the Federal Government forcing resources companies to keep some cheap gas and coal exclusively for Australian use, hundreds of Australian manufacturers like Qenos could go to the wall.

“In Australia right now regardless of the resources that we’ve got in the ground under our feet, we’re still playing paying these ridiculous global prices, and manufacturers like Qenos say they will not be able to continue to operate,” Mr Walton says.

“These resources – gas and coal – belong to the Australian public and should be available to Australian businesses and households, not just a handful of multinational companies making obscene profits by exporting them.

“If we don’t tackle energy prices here have no mistake: tens of thousands of good quality, hard-working, manufacturing workers are going to be out of a job.”

Mr Walton said the situation at Qenos was being mirrored around the nation, with news that well know Aussie companies such as Snack Brands (which makes Cheezels, CCs, Kettle and Thins chips) and Solaris Paper (which makes Sorbent toilet paper) are facing similar, soaring energy bills.

“The situation is critical,” he says. “The Albanese Government knows change is needed, but this change needs to happen within weeks.

“This is not a 2023 or 2024 problem, this is a crisis that is happening now, because a lot of these manufacturers will not survive if their power bills continue to rise this way.”

The AWU has put five simple steps to the Government that, without legislation, would provide immediate relief to manufacturers and households.

They include a gas price cap enforced by the Australian Competition & Consumer Commission, in the same way it sets a maximum price for retail electricity, and putting the code of conduct “in the hands of the ACCC, taking it from a toothless paper tiger to an enforceable set of rules to rein in cartel conduct by the gas industry”.

The AWU also recommends inserting a price trigger into the Australian Domestic Gas Security Mechanism (the “gas trigger”) so that exporters must divert more product to the domestic market when a price point is reached. At the moment it must only guarantee adequate supply.

And it suggests cracking down on gas exporters “who game loopholes in the heads of agreement by only making short-term offers for uncontracted gas, and instead of ensuring that offers are long enough to give confidence to manufacturers”.

The issue was highlighted by AWU delegates representing workers from a range of energy-dependant industries who went to Canberra recently to tell the Government how the energy crisis is affecting their employers and putting their jobs at risk.

All their employers are at risk of closing if they are can’t to get affordable long-term energy contracts.

Mr Walton said delegation was well received and the message was getting through to those in power, but the AWU was pushing for an outcome by end of this year.


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