Anthony Albanese says Australian nickel producers will ultimately have a competitive advantage because they are less emissions intensive, but the Opposition says the prime minister is “kidding himself” and should consider exempting the miners from the government’s climate change safeguard mechanism.

While the government has Treasury working up a plan for production tax credits to help BHP and others compete with Indonesia, which is undercutting the world nickel market, Mr Albanese cautioned no final decision had been made, and other options were also under consideration.