AdBri cautious on Labor’s proposal for climate safeguard mechanism

Building materials supplier AdBri said it was cautious on Labor’s proposal to strengthen the safeguard mechanism aimed at reducing emissions.

Building materials supplier AdBri says it wants a level playing field with international rivals when it comes to reducing emissions. Picture: Naomi Jellicoe

Building materials supplier AdBri said it was cautious on Labor’s proposal to strengthen the safeguard mechanism aimed at reducing emissions, warning it wants a level playing field with overseas competitors, even as it hiked its own targets for meeting pollution cuts.

Labor’s plan would force the 215 biggest industrial emitters to reduce their carbon footprint more steeply, so an Albanese government could lower Australia’s emissions by 43 per cent of 2005 levels by 2030.

AdBri, one of Australia‘s biggest cement manufacturers, said it was watching Labor’s scheme closely.

“The devil is in the detail on this stuff,” AdBri chief executive Nick Miller said. “We’re obviously very aware of the Labour Party safeguard mechanism and the key issue there for us is understanding what caps they are going to put in place.”

It’s expected that companies like AdBri, that control the 215 industrial facilities that comply with the safeguard mechanism, will have to wait until after the election to find out exactly how their business would be affected by an Albanese government.

The Energy Users Association of Australia last week said members had been preparing for changes although there were fears around the costs of compliance, while the oil and gas sector has urged Labor to provide “absolute clarity” on how its signature climate change policy would affect the sector.

AdBri said the construction materials sector would need plenty of consultation over any changes and wanted a level playing field with its international rivals.

“This is going to require a lot of consultation and collaboration with industry, because any safeguard mechanism needs to be reflective of the degree of difficulty of abatement of emissions. And the cement and steel industries are both in the hard to abate sector. So the caps and how those caps come down on an annualised basis need to be very carefully thought through so that you don’t stifle investment in the sector,” Mr Miller said on Monday, after releasing AdBri’s roadmap to net zero emissions by 2050 report.

AdBri CEO Nick Miller has laid out 2030 targets as part of a plan to hit net zero emissions by mid-century. Picture: Britta Campion

“We’ve all seen the criticality of domestic manufacturing, through the last two years for essential services into Australia, given supply chain disruption globally. And as a domestic manufacturer, all we want to have is a level playing field with importers globally.”

AdBri laid out a series of 2030 targets for the first time, including a 20 per cent reduction in cement emissions intensity compared with a 2020 baseline; plus a 10 per cent cut in lime emissions intensity, while sourcing all of its energy needs from renewables by the end of this decade.

Elements of its plan were questioned by shareholders. A target for emissions from its customers and suppliers, known as Scope 3, will not be set until it has held further talks with those businesses while its decarbonisation “levers” for the period 2030 through 2050 rely on breakthrough technologies for 88 per cent of the overall pollution reduction.

AdBri, which is working with tech developer Calix on projects like capturing carbon during the limestone heating process, said technologies could include carbon capture and storage, and both zero emissions process heat and heavy vehicle solutions, which it can roll out across its operations.

The company has made a 32 per cent reduction in its greenhouse gas emissions since 2010 and received backing on Monday from Climate Action 100+, a global investor group that controls $US68tn in assets.

“The new commitments represent a significant step forward in providing investors the clarity and commitments they have been calling for while recognising uncertainties in the pathway to decarbonise cement and lime,” said Laura Hillis from Climate Action 100+.

“Investors will continue to engage with the company to ensure these new commitments are met, to seek further information on the company’s post 2030 pathway and to call for additional disclosure in line with TCFD and other best practice guidance and standards.”

A damning report in November slammed boards of climate-exposed companies including AdBri for not taking climate risks seriously, although the nation’s cement and concrete industry and a major aluminium producer have pledged to deliver net zero carbon cement and concrete to Australian society by 2050.

AdBri closed down 1.4 per cent at $2.90.

Originally published as AdBri cautious on Labor’s proposal for climate safeguard mechanism