One of Australia’s largest manufacturers, BlueScope Steel, has backed a proposal for a low emissions target (LET) as the best way to balance the objectives of affordable and reliable energy that meets emissions reduction targets.
BlueScope chief executive, Paul O’Malley, said the LET was a better option than an emissions intensity scheme (EIS) which would shut down coal power stations more quickly.
The intervention comes ahead of Australia’s chief scientist, Alan Finkel, delivering a report on Friday expected to propose a LET to indirectly put a price on emissions by mandating a certain proportion of electricity come from low-emission sources.
Bill Shorten has written to the prime minister offering to consider supporting the idea but the former prime minister, Tony Abbott, has warned it would be a “big mistake” for the government to adopt a LET which knocked out new high-efficiency coal-fired power stations.
O’Malley said that power prices in Australia had gone “up and up and up” in the last decade because coal power stations such as Hazelwood were “being phased out without any plan or understanding of the consequences” on households and industry.
“We need multiparty support for a clean energy target that is technology agnostic, that deals with the issues of affordability, security and reliability,” he said on Radio National on Thursday. He added Finkel and the energy and environment minister, Josh Frydenberg, appeared to understand those objectives.
“If we can get everyone on board … we may again be able to have a competitive industry, one that’s got affordable power, one that has the right renewable mix and we can create Aussie jobs.”
O’Malley warned that renewables could not yet supply reliable baseload power and an EIS would “shut down more coal power stations more quickly”, in effect “immediately penalising coal when there’s nothing to replace it”.
Asked whether coal could still be used if the LET was set at 0.7 tonnes of carbon per megawatt hour, O’Malley said technology might be developed to make power plants that use the fossil fuel emit “dramatically lower emissions”, which he described as “a win for the country”.
The BlueScope chief executive said solar and wind were “fantastic technologies” and backed suggestions Finkel could recommend mandatory storage to accompany renewable energy.
O’Malley supported an “appropriate emissions target – one that is challenging, one that improves the global environment” but added that Australians also wanted jobs and an internationally competitive manufacturing sector. He warned the goal of emissions reduction should not be ranked ahead of reliability and affordability or Australian jobs would go overseas.
Despite Labor’s olive branch on energy policy and the support of big industrial users like BlueScope, the Coalition is set for a bruising debate on the LET, with several conservatives already expressing concerns in the wake of Donald Trump’s withdrawal from the Paris climate agreement.
On Wednesday Abbott said he was anxious that if the Finkel review recommendations were implemented, renewables would rise to 70% of the energy mix by 2030 and coal would fall from 65% to 20%.
Abbott said the electricity system needed to deliver consumers “affordable, reliable, energy” and emissions reduction was a secondary consideration.
On Thursday Labor climate change spokesman, Mark Butler, told ABC’s AM the opposition wanted to achieve the trifecta of reliable, affordable energy supply that brings down carbon pollution levels.
Butler has previously said that Labor could impose conditions on its support for a LET to ensure the new scheme achieves policy certainty and can be scaled up to meet more ambitious emissions targets.
Responding to Abbott’s intervention, Butler said the Liberal party’s interests were “not served by his ideas”. He noted that when an EIS was on the table in November it was Abbott’s and conservative Corey Bernardi’s intervention that forced Malcolm Turnbull to rule it out despite support from business groups, the CSIRO science agency and Finkel.
“Malcolm Turnbull can’t let Tony Abbott dictate this policy area again. He’s got to stare them down.
“Whether it’s a LET or an EIS this will be a version of carbon pricing that provides a boost to renewable energy.
“It’s an oxymoron to have a LET scheme that provides a boost to coal-fired power – if that’s the condition that Tony Abbott supports, it’s not going to come off.”