New lower emission limits for Australia’s biggest polluters

Australia’s biggest 215 polluters will have to meet lower emissions targets in coming years, while farmers warn that lucrative carbon farming could take over prime farm land.

LABOR’S decarbonisation program kicked into gear this week with a suite of reforms, including a carbon price cap on large industrial polluters that aims to reduce carbon emissions by 200 million tonnes by 2030.

The headline act of the package is a revamp of the so-called ‘safeguard mechanism’ that will be applied to about 215 of Australia’s biggest polluters whose facilities are responsible for almost a third of the nation’s emissions.

However, a farmers lobby group has warned that if the price of carbon and renewables becomes too lucrative it could impact food supply should producers switch land use.

Under the government’s position paper, released yesterday by Climate Change Minister Chris Bowen, the 215 polluters will need to start cutting emissions from July 1 by an average of 4.9 per cent per year to help the Albanese government reach its 43 per cent emissions reduction target by 2030 target and net-zero by 2050.

It is the most significant regulation of emissions at federal level since the Coalition tore down the Gillard government’s carbon price legislation nine years ago.

Under the current plan, the government said facilities would be given site-specific emissions intensity limits based on their circumstances and these baselines would “be set at international best practice but adapted for an Australian context”.

Mr Bowen said the price cap would be set at $75 a tonne, effectively to provide tailor-made solutions and time for business to adjust to lower-carbon settings.

New industrial pollution limits announced for Australia Picture: Getty Images

The underlying aim of the mechanism is to deliver about 205 million tonnes of abatement between 2023 and 2030 from industrial polluters in the oil and gas, manufacturing, mining, transport and waste industries.

The government’s plan, which requires new legislation and likely Senate support from the Greens and independent senator David Pocock, would see a move towards an industry baseline after 2030.

However, there will be no limit placed on the use of carbon offsets that companies can use to reach their targets.

The government also promised an initial $600 million out of the $1.9 billion powering the regions fund to help trade-exposed polluting businesses decarbonise.

Farmers for Climate Action strategy director Cambell Klose said while the organisation welcomed many aspects of the government’s changes, it was concerned about unlimited credits and land use.

“Allowing companies to use unlimited carbon credits to ‘offset’ their emissions fails to reduce carbon emissions, and could see a perverse outcome of carbon crops taking over too much food producing land if the price of carbon credits rises steeply,” he said.

Meanwhile, the findings of the Chubb review of the integrity of Australian Carbon Credit Units and Australia’s carbon crediting framework has concluded that the nation’s carbon crediting framework is sound and reducing emissions.

The long-awaited review, led by former Chief Scientist Professor Ian Chubb, also found abatements resulting from projects under the Scheme were not overstated.

However, it did recommend several improvements around transparency, co-benefits and integrity.

Integrity of the Scheme is seen as particularly important in driving investment in ACCUs and carbon framing projects.

Many carbon reduction projects were being held in abeyance until the findings were handed down.

Meanwhile, the National Farmers’ Federation broadly supports the reviews recommendations but raised some concerns about missing farmer representation and support.