Federal election 2022: Labor urged to clear the air on climate policy

The oil and gas industries have urged Labor to provide ‘absolute clarity’ on how they will be impacted by its climate change policy.

Resources companies are concerned about the lack of consultation before Labor formed its climate change policy

The oil and gas industries have urged Labor to provide “absolute clarity” on how they will be impacted by its climate change policy, as big energy users raise concerns about the proposal to strengthen the safeguard mechanism.

A spokesman for the Australian Petroleum Production and Exploration Association – which represents Woodside, Shell, Santos, BP and BHP – warned any unintended policy consequences could “reduce competitiveness and negatively impact investment”.

“Labor’s policy from last year states it provides tailored treatment for emissions-intensive, trade-exposed industries based on the principle of comparative impact – ensuring exporters remain competitive,” the spokesman said.

“We would expect that treatment to apply to all trade-exposed industries, including the oil and gas sector, to retain our competitive global position and continue to power Australia’s and our region’s economy.”

Energy Users Association of Australia chief executive Andrew Richards said its members were concerned by aspects of Labor’s safeguard mechanism plan.

“We have spoken about the ALP plan with members and while there is some concern – how fast do we need to get there, what if technology isn’t ready, what access to offsets will I have and what is the projected price – many are waiting to form a view until more detail becomes available, most likely post-election,” Mr Richards said.

The group – with members including big industrial users Qenos, Incitec Pivot and Brickworks – said its members had been preparing for changes although there were fears around the costs of compliance.

The Australian has spoken to resources companies who are concerned about the lack of consultation Labor had ahead of forming its policy, with business figures unsure about what its practical implications would be.

The Business Council of Australia entered the election debate on Wednesday and rejected Scott Morrison’s claim that Labor’s proposal amounted to a “sneaky carbon tax”.

The BCA defended Labor’s plan to strengthen the safeguard mechanism, forcing 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 on 2005 levels by 2030.

The Prime Minister said Labor’s policy was a “carbon tax” as big industrial users would be forced to pay money on carbon credits if they could not meet Labor’s more aggressive baselines.

But the BCA said Labor’s proposed changes to the safeguard mechanism could offer the “right incentive to drive investment, deliver more jobs and meet our net-zero commitments”.

“The concrete, bipartisan commitment to net-zero emissions was a critical step towards giving businesses the certainty they need to make investments, create new jobs, keep Australia an energy superpower and deliver affordable, reliable and secure energy,” the BCA posted on Twitter.

The companies 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 will be impacted by an Albanese government.

Companies will work with the Clean Energy Regulator to drive down emissions, with the plan tailored to each facility.

Opposition energy spokesman Chris Bowen said no coal mining jobs would be at risk under the policy, as he accused the Coalition of running a “lazy” and “toxic” scare campaign.

“This is a sensible framework which business has asked for, the Business Council of Australia and the Australian Industry Group suggested to help our biggest emitters reduce their emissions over time to get to net zero by 2050,” Mr Bowen told the ABC.