Government will push back on carbon ‘sabre rattling’: Angus Taylor

Australia will fight any foreign move to impose policy on us via a carbon border tax, Angus Taylor says. | WATCH the interview

The government is “dead against” potential carbon border taxes being imposed by the US and Europe on Australian exports, Energy and Emissions Reduction Minister Angus Taylor says, defending Australia’s reluctance to commit to a net zero emissions target by 2050.

The US and Europe are weighing whether to impose a carbon border tax on climate laggards, a move that could potentially hurt Australia.

“We’re dead against that,” Mr Taylor told The Australian’s Ticky Fullerton in a live Q&A event for subscribers.

A similar border scheme is also being considered by US President Joe Biden, posing another threat to Australia.

While “the Americans have been less enthusiastic about that idea”, Mr Taylor said, “a carbon tax that is being imposed from one country to another is effectively a tax being imposed by another government. That is not something that is in line with any principle”.

“It’s not our policy and it’s not something we agree with. There’ll be lots of sabre rattling on these issues but this is certainly not Australian government policy. We don’t accept the idea that one government in another country should impose their policies on us.”

President Biden has committed the US to a target of a 50 to 52 per cent carbon emissions cut compared with 2005 – double the size of Australia’s target. Japan, one of Australia’s big trading partners, will now aim for a 46 per cent cut by the end of this decade, well up on its previous 26 per cent goal.

‘We don’t accept the idea that one government in another country should impose their policies on us.’

Australia said it may even beat the net zero target before 2050, but through a technology-led approach rather than through taxes or increasing power bills for consumers.

“We want to get to net zero and we want to get there as soon as possible, preferably before 2050,” Mr Taylor said.

“There’s no ambiguity about that. What we’re not going to do, that other countries may choose to do, is raise the cost of energy, raise the cost of electricity for middle Australia. That is the danger if you move too aggressively without a plan then the default is to impose a tax.”

“We have met and beaten our Kyoto targets. We have outperformed all of those countries including Japan, Germany and many others. We’ll continue to deliver on this.”

Price rise warning

Mr Taylor warned of a risk of complacency in the national power grid, saying the right balance must be struck between the market’s coal base and a fast moving transition to renewables or prices could rise.

“We will see prices go up and we will see loss of reliability,” if the right settings are not found, he said.

“If we don’t manage these things, we know what happens.”

Victoria and South Australia were the most at risk states given their high renewable ambitions and loss of coal plants exiting the grid.

Mr Taylor also said he would weigh the response from the private sector before the government will decide whether to proceed with Snowy Hydro’s controversial gas power plant planned for NSW’s Hunter Valley.

The Morrison government gave companies a deadline of April 30 to deliver an extra 1000 megawatts of dispatchable power over fears that NSW could struggle once AGL Energy’s giant Liddell coal plant closes in the 2022-23 summer. If the private sector fails to step up, the government-owned Snowy will build a 650MW gas plant at Kurri Kurri to fill the gap.

“We’ve been very clear. We will make sure we have the right balance between intermittent and the dispatchable generation is a crucial issue and we’ll said we’ll intervene when we need to,” Mr Taylor said.

“In the short term we have to replace Liddell. We think it is crucial to have enough generation.”

“We’re not going to risk the same thing happening in NSW that happened once Hazelwood closed in Victoria. We’ll get 1000MW but the question is how and we’ll make a decision on that. There’s no ambiguity – but I’m not going to speculate what we’re going to see.”

EnergyAustralia is close to sanctioning a 300MW Tallawarra B gas plant but there is uncertainty if billionaire Andrew Forrest will proceed with the Port Kembla gas plant which would help meet the 1000MW.

“We’ll evaluate the options as they come in. Obviously time is of the essence here – we have to have these projects up and running. We’re not going to see a repeat of Hazelwood, where we saw a doubling of the wholesale price,” Mr Taylor said.