Opinion: Net zero a strange energy policy in a strange land

Why must Australia act like an energy weakling when it has every right to be a world energy superpower, writes Matt Canavan.

When Captain Cook’s Endeavour arrived in Australia, the crew encountered a strange land full of weird wildlife and landscapes. Some thought kangaroos, with joeys in their pouches, were two-headed monsters.

Similarly, modern-day visitors to our shores are gobsmacked by our bizarre energy policies. Renowned energy author Robert Bryce recently visited Australia and remarked that “Australia is an energy superpower but it is acting like an energy weakling”.

Take, for example, the unnecessary and self-inflicted crisis that is engulfing the more than 8000 people who work in our smelters and refineries, and the others that rely on them for work or business.

Tens of thousands of Australian jobs are at risk because Australia now unnecessarily pays some of the highest electricity prices in the world, and we sit back and let other countries ignore their climate commitments while we dutifully and naively do as we are told.

Under the Anthony Albanese government a carbon tax has been imposed on our smelters and refineries. Large Australian factories are required by law to reduce their carbon emissions to “net zero” by 2050.

To do that the companies buy carbon credits at a current cost of $36 per tonne.

At that carbon price, our metals industry is facing a $6.6bn bill to decarbonise. But the liability could be much higher if ANZ is right and carbon prices rise to $70 per tonne soon.

While the government imposes this cost on our manufacturing sector, it is handing out billions to subsidise them in a sometimes futile attempt to keep them alive.

Last year, the government announced $7bn to help save our critical minerals industry, this year it announced $2bn to help save the Whyalla steelworks and this week it indicated there would be an announcement of more government support for a struggling zinc refinery in Hobart and a lead smelter in Port Pirie.

The subsidies will probably end up costing more than the carbon tax so why don’t we just remove the tax and save taxpayers a whole lot of money?

It is not like our carbon tax is doing anything to help the environment. Since the world allegedly signed up to net zero three years ago, carbon emissions have increased by 1.7bn tonnes to hit new records.

In those three years, coalmining in China, India, Indonesia and Mongolia has increased by 1.2bn tonnes per year.

Captain James Cook’s crew encountered a strange land when they charted Australia’s east coast.

To put that in context, the once-controversial Adani Carmichael coal mine produces about 10m tonnes a year. So China, India, Indonesia and Mongolia have opened the equivalent of 1200 Adanis in just three years!

The net zero joke is on us.

That increased coal mining has had a real impact on Australian jobs. Indonesia, backed by Chinese finance, has opened around 20 coal-fired power stations in three years to fuel an enormous expansion in their nickel refining capacity.

Before this, Australia’s future nickel prospects looked bright because most electric vehicles use batteries that contain nickel. So BHP decided that it needed to produce “green” nickel as electric car consumers would apparently not want anything else.

Turns out BHP was wrong. Despite Indonesia’s nickel ores not being as good quality as Australia’s, their lower-cost, coal-fuelled energy supplies undercut our production. Sadly, Australia’s nickel industry has all but closed and 10,000 Australians have lost their jobs.

The nickel industry was one that the Albanese government hoped to save with its $6bn critical minerals package last year. All to no avail.

The new Indonesian president has said that he wants to repeat Indonesia’s aggressive, Chinese-financed, coal-based industrial strategy with copper, lithium and aluminium – all important Australian industries.

These industries don’t just provide thousands of jobs, they have historically been at the heart of Australian innovation. Mount Isa Mines was once the biggest company in Australia because it sold ideas (like the IsaKidd and ISASMELT technologies) not rocks. The copper industry of Mount Isa and Townsville is now at risk of shutting.

Refining our minerals also creates way more wealth for Australia than just selling the rocks. Bauxite sells for $100 per tonne but if you turn it into alumina you get $800 per tonne and if you smelt it into aluminium you get $4000 per tonne.

It was not just Australia’s wildlife that looked strange to the first settlers. Some described eucalyptus trees as unwelcoming and unlike any proper tree.

It turned out that this harsh and alien landscape hid gold and other valuable minerals.

The discovery and refining of these minerals built Australia’s biggest companies and our wealth.

But if we maintain our absurd net zero policies, that wealth won’t be developed and Australia will be much poorer.

Matt Canavan is an LNP senator for Queensland

Originally published as Opinion: Net zero a strange energy policy in a strange land