Aussies face another hip-pocket hit at the bowser and when they fly under a sweeping ‘carbon tax’ being cooked up by federal bureaucrats at the behest of Labor’s Climate Change and Energy Minister Chris Bowen.
A new consultation paper released by Mr Bowen reveals the Albanese government is exploring the creation of a carbon-credit trading system as a way to stop consumers, farmers, miners, airlines and trucking companies from using traditional diesel, petrol and jet fuel.
Under a section titled “impact on fuel costs,” the document states that the “modelled approaches would be expected to increase compliance costs for obligated entities to varying degrees as they transition towards low carbon liquid fuels and other eligible compliance pathways.”
The paper goes on to say that the federal government has estimated the financial impact on key sectors but won’t reveal details because exact “settings remain subject to consultation”.
The proposed system will cover more than 90 per cent of Australia’s transport fuel use and there is no opting out. It is likely that “obligated entities” would pass on their extra costs to consumers.
Critics say the plans have hallmarks of the Gillard-era Emissions Trading Scheme, which is widely viewed as having cost Labor the 2013 federal election.
“This is a carbon tax on the entire fuel supply chain,” Opposition transport spokeswoman Bridget McKenzie said.
“They are not telling us how much fuel will increase, but this paper does make it clear that it is the end user who will end up paying,” Senator McKenzie said.
“This is a carbon tax on fuel hidden in plain sight.”
The consultation paper states that initially, the government intends to impose volume-based targets for low-carbon fuels such as biodiesel and ethanol.
But from 2035, to increase “certainty about the emissions reduction trajectory”, there would be a switch to carbon-intensity goals and a credit trading system.
“This would see obligated entities required to demonstrate that the average carbon-intensity of obligation fuels remains below the applicable benchmark in each reporting period. Failure to meet obligations may result in enforcement action, including financial penalties,” the consultation paper states.
“Obligated entities can choose how they achieve the target, including by using different types and amounts of LCLF (low-carbon liquid fuel) and, where permitted, credits generated or purchased within the scheme.”
The departmental document states that “learnings” have been taken from other jurisdictions such as California.
The US state introduced a low-carbon fuel standard including a carbon-intensity benchmarks in late 2011. The standard had reportedly pushed up the price of gasoline by about five per cent by 2025.
It’s understood that the department also looked at the European Union’s Emissions Trading Scheme. Research has suggested the ETS pushed up airfares by as much as 18 per cent.
“Airfares are crazy town if you start doing this stuff,” the Nationals Ms McKenzie said.
However, the Albanese government has said the impact on ticket prices in the EU was “very small.”
While the business sector broadly supports emissions reduction, there are concerns that Labor’s new plan will only add to their already high fuel bills.
Minerals Council of Australia CEO Tania Constable said “any transition to low carbon liquid fuels (LCLFs) should be voluntary to avoid imposing further costs which would damage regional jobs and local communities that rely on a strong mining industry.”
Australian Trucking Association CEO Matt Munro said the carbon-intensity standard and credit trading system could provide more flexibility than a volume-based target. That said, none of the alternatives were cheaper.
“These thing are going to be more expensive than conventional fuels,” Mr Munro said. “We are advocating for a measured approach over time that would deliver the lowest cost option.”
The consultation paper acknowledges the potential for bureaucratic “overlaps”, noting the Safeguard Mechanism already forces large miners and airlines to reduce their emissions.
“An LCLF demand policy has strong potential to interact with the Safeguard Mechanism for both production and combustion of fuels. For production, obligated entities (fuel providers) may also be Safeguard entities,” the document states.
Additionally, Ms McKenzie raised concerns about additional red tape because a new regulator is proposed.
“I’m not sure our country needs any more quangos,” she said.
Quangos, or quasi-autonomous non-governmental organisations, are public bodies funded by government that operate independently of ministers.
Mr Bowen’s office did not respond to this masthead’s questions about costs for consumers and business on Wednesday, saying it was not given sufficient time. But it did point to several examples of public support for its proposal from Ampol, GrainCorp and others.
In releasing the consultation paper this week, Mr Bowen said “developing Australia’s great opportunity in the alternative industry of low-carbon liquid fuels … is great for fuel security, great for emissions, and also great for Australian agriculture and industry.”
Extracted in full from: https://www.dailytelegraph.com.au/news/national/new-carbon-tax-plan-to-drive-up-fuel-prices-and-airfares/news-story/a301bf852fd5b96e7c379277c5cc49ca
