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December 15, 2008
Alcoa’s Response to Federal Government's CPRS White Paper
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Alcoa of Australia welcomes today’s release of the Government's CPRS White Paper and is reviewing it thoroughly.
An initial review indicates there are important and sensible initiatives in the paper including recognition of the challenges the scheme presents for emissions intensive trade exposed industries (EITEs).
There are some aspects we will be looking at very carefully that will impact on the viability of our industry, the preservation of jobs, and the reduction of greenhouse gases.
- Firstly, it is essential that the rate of decay of EITE permits does not prejudice industry’s ability to compete in the international market place. If our Australian operations incur significant additional costs – and our competitors do not - it will render Australian industry unviable. An overly ambitious decay of ETE permits, ahead of competitors in other countries, could cause this impact.
- Secondly, it is essential that the complex issue of indirect emissions and the proposed electricity factor is well considered. Like all Victorians (households and industry), Alcoa’s Victorian operations rely on coal-fired power. It would be nonsensical to cause carbon and jobs leakage by penalising Victorian operations before viable low-carbon alternatives are available.
If these aspects are not adequately dealt with as part of the CPRS, we will experience severe economic and job impacts, even to the extent of seeing an increase in global emissions, therefore defeating the main objective of the scheme.
There is no free ride here for the aluminium industry. Even with the EITE provisions the current CPRS proposal will still see a very large cost increase for our industry. For example, at a carbon price of $20-25/t, the current proposal is likely to cost the aluminium industry more than $150M in the first year.
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Contact: Michaela Southby 0400 127 427
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