Greens warn the government that a fight is looming over energy policy

The Greens are threatening to use their power to overturn the rules of the government’s key climate policy, the so-called safeguard mechanism, unless it is overhauled to remove fossil fuel projects from the scheme.

“Labor wants to let coal and gas buy their way out of Australia’s climate policy and the Greens want to stop new coal and gas,” Greens leader Adam Bandt is expected to say in a speech at Smart Energy Council conference on Monday.

Adam Bandt is threatening the government over climate reforms.

Alex Ellinghausen

“The government is likely to need the Greens’ backing in the Senate for the safeguard rules, which are a disallowable instrument, and to pass the enabling legislation currently before the parliament.

“So there will be a fight over new coal and gas this year. Labor wants to open new coal and gas mines. The Greens want to stop them.”

The safeguard mechanism is the government’s key emissions reduction instrument.

The Greens argue that fossil fuel facilities should not be included in it because their presence would force up the price for other industries, and it would allow them to “buy” their way out of making genuine reductions.

The mechanism requires Australia’s largest greenhouse gas emitters to keep emissions below a set limit. They would then have to pay a fee to offset each tonne of greenhouse gasses they emit over that limit.

Over time the limit would drop and the cost per tonne increase.

A spokesperson for Climate Change and Energy Minister Chris Bowen said any new projects would have to meet onerous requirements, including rigorous environmental checks under relevant Commonwealth, state and territory laws.

“The government’s safeguard mechanism reforms are carefully designed so that all large facilities, whether they are existing or new, are required to reduce their emissions,” the spokesperson said.

“New coal and gas projects covered by the policy will be required to keep their emissions below their baseline from their first year in operation and their baselines will reduce over time, on a path to net zero emissions by 2050.

“Without our reforms, Australia would create 205 million tonnes more emissions to 2030, equivalent to two-thirds of the emissions of Australian cars over the same period.”

The conference will also hear Australia is at risk of being left behind in a global clean technology race that has broken out between Europe, the United States, China and Japan, with trillions being pumped into new clean technology.

In August, the United States passed its inflation reduction act, pumping $US370 billion into clean tech.

In response the European Union, which has accused the US of using the act to subsidise new industries, unveiled a wide-ranging “green industrial plan” during financial talks in Davos earlier this month.

Its plan would increase subsidies and cut red tape for new clean tech industries.

“To keep European industry attractive, there is a need to be competitive with offers and incentives that are currently available outside the European Union,” said European Commission president Ursula von der Leyen.

“We need aggressive attempts to attract our industrial capacities away from China and elsewhere.”

A group to be launched at Monday’s conference, the Climate Capital Forum, is calling for the government to rapidly refocus and ramp up support for bodies such as the Future Fund, the Australian Renewable Energy Agency and the Clean Energy Finance Corporation or risk the nation being left behind.

“The biggest issue Australia is going to face is we exported $200 billion of fossil fuels last year, and when the world delivers on the climate science that $200 billion is going to go close to zero very quickly,” said Tim Buckley, an energy analyst with Forum, whose members include companies and organisations including the Smart Energy Council, Clean Energy Finance and Rewiring Australia.

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