Nationals push for coal to save manufacturing jobs

Nationals MPs are set to reignite a climate row within the Coalition as the Morrison government pledges to work with Joe Biden to reduce emissions.

Nationals senator Matt Canavan, who chairs the party’s backbench policy committee, and his lower house colleagues Barnaby Joyce and David Gillespie at the tunnel entrance of Mandalong mine in NSW last year. Picture: Adam Yip

Nationals MPs are set to reignite a climate row within the Coalition, proposing a manufacturing plan supported by more coal-fired power as the Morrison government pledges to work with Joe Biden to reduce emissions.

The junior Coalition party’s backbench will on Tuesday unveil its manufacturing blueprint, the first to be released by its policy committee, calling for the construction of coal-fired power stations to support manufacturers.

The plan asks the Nationals to commit to an “ambitious but achievable goal” of creating 800,000 jobs within 15 years and pushes for a coal-fired power station in the Hunter.

The demands come as the government faces increasing pressure to adopt a net-zero emissions by 2050 target, and with Energy Minister Angus Taylor agreeing on Monday to a joint working group with the US President’s climate envoy John Kerry to reduce carbon emissions.

With Mr Biden recommitting to the Paris climate change agreement, the government is increasingly shifting its rhetoric on emissions reductions, with Scott Morrison last week ruling out subsiding “any mines”.

The government has also signed on to a flagship initiative of the upcoming Glasgow summit calling for climate risk to be integrated into investment decisions.

The Nationals’ backbench manufacturing plan, released as Coalition MPs prepare for a possible election later this year, says power prices could be reduced with the construction of coal-fired power stations.

“As a recent Australian Energy Market Operator (report stated), Australia will need 6 to 19GW of reliable power to back up renewables over the next 20 years,” it read. “That is in effect around four to 12 coal-fired power stations.”

“Given that the NSW government has recently announced plans to shut 8520 megawatts of coal-fired power, (the federal ­government) should also support a new coal-fired power station in the Hunter Valley.

“It would be better for the ­environment for more Australian coal to be used to manufacture goods in Australia, instead of Australians importing manufactured goods from countries that use lower-quality coals.”

The NSW government’s road map, published in November, ­accounted for four of the state’s five coal-fired power stations being decommissioned by 2035.

The federal Coalition has funded a feasibility study into a coal-fired power station in ­Collinsville after lobbying from Nationals MPs but a growing number of Liberals have warned the government should not support new coal plants.

The Prime Minister has ruled out taking a more ambitious 2030 emissions reduction target or new 2035 target to Glasgow — as ­revealed in The Weekend ­Australian last Saturday — but conceded there was no longer any question about the need to work towards a zero-net emissions ­future.

While some Liberal MPs want Mr Morrison to have a more ambitious climate agenda, the manufacturing blueprint shows the potential for a backlash from ­Nationals colleagues.

Energy policy has divided the Coalition for years, with former prime minister Malcolm Turnbull holding it responsible for his loss of the Liberal Party leadership.

The Biden administration is pushing for stronger emissions reductions efforts ahead of the Glasgow conference. A readout of the call between Mr Taylor and Mr Kerry said they had agreed to a working group on improving research and investment in low-emissions technology.

“Minister Taylor and Secretary Kerry noted the role that breakthroughs in technology will play in reducing global emissions and making net zero achievable,” a statement issued after the call by Mr Taylor’s office reads.

Grattan Institute energy policy analyst Tony Wood said the working group would give Australia a platform to launch target talks and discuss technology development with the Biden administration before Glasgow.

“America and Australia are not that different on energy policy even under the Democrats,” Mr Wood said. “Biden does not ­appear to be moving towards a price on carbon and his climate target is 26 to 28 per cent emissions reduction by 2025, compared to the same Australian target by 2030. It’s not that different structurally. “There will be still pressure on Australia going into Glasgow and if Biden holds a summit on climate action. So opening upon technology development makes sense.”

Matt Canavan. Picture: Toby Zerna

Queensland Nationals senator Matt Canavan, who chairs the party’s backbench policy committee, said the Coalition had ­inherited a renewable energy ­target and “gold plating” of ­transmission networks that had “damaged Australia’s energy competitiveness”.

“We have to date not been able to roll that back,” said Senator Canavan, the former resources minister. “We hope (the plan) opens a debate on the radical action that’s necessarily to rekindle Australian manufacturing.

“Business as usual is not going to reverse the trend in Australia’s manufacturing decline. We have to change course if we want manufacturing jobs to come back to Australia.”

Nationals MPs hope a boost to regional manufacturing will help the party at the next poll after it failed to pick up seats in 2019.

Mr Morrison has made gas a central component of the government’s strategy to reduce emissions and deliver cheaper power but Nationals MPs say gas is unlikely to encourage more manufacturing on its own. The backbenchers want the government to fund the development of new oil reserves to replace the Bass Strait, noting Geoscience Australia estimates there are almost 100 billion barrels of potentially recoverable oil resources.

The Nationals’ plan also suggests a “Buy Australian Act” to force government contracts to set minimum thresholds for procuring Australian content.

Nationals leader Michael McCormack said the manufacturing plan reflected the party’s membership. “The government has a strong record on supporting and building our manufacturing sector and this document aims to provide options for consideration as these policies develop and our economy recovers from the global pandemic,” he said.

The Nationals backbenchers warn it is “not healthy for China to have such a dominant position in so many key global commodities” and are critical of Australia’s manufacturing output declining by 5 per cent in the last decade.

The Coalition has been in power since 2013.

“The rising geopolitical tension in our region has been building over the same period that our manufacturing capacity has been declining. We cannot allow this trend to continue,” the committee’s plan reads.

“Australia will be much better prepared to face further rising tension if the overall position of our manufacturing industry is strong and agile, not just the small part of it devoted to defence manufacturing.

“China accounts for more than half of the world’s production of steel, copper, aluminium and rare earths. It has become increasingly important in the production of machinery and electronic goods. Australia should be part of a global effort to diversify supply chains so that the global trading system can be more resilient.”

Under the Nationals’ plan, the Anti-Dumping Commission would be tasked with investigating subsidies provided by other countries to manufacturing industries in order for Australia to take countervailing action to protect manufacturers at home.