July 10, 2011

Carbon Pricing

Alcoa of Australia is working through the carbon pricing detail released today by the Federal Government, but will need to see the detailed provisions in the regulations before being able to accurately determine the full implications for the company.

Alcoa of Australia’s General Manager of Climate Strategy Tim McAuliffe said: “This will be a complex piece of legislation, and we are now going through a process of assessing the detail which was released today and that will naturally take some time.

“However, from what we can see so far, Emissions-Intensive Trade-Exposed (EITE) provisions have been built in and this is essential to preserve the international competitiveness of our world class export industries.

“It’s now critical that the detailed provisions within the regulations ensure the intent of the EITE approach is actually delivered. The key factors for our industry in this regard are the treatment of electricity intensity in EITE permit allocations* and ensuring EITE permit allocations do not decay before international competitors adopt a comparable carbon price.

“Without these adequate safeguards, Australia would experience both carbon and jobs leakage to overseas competitors.”

Alcoa has consistently supported an economy-wide response to the challenge of climate change. It is essential the Australian response does not diminish the international competitiveness of Australian industries and drive business offshore to countries with no carbon price. This would shift emissions to another part of the world, rather than reducing global emissions, and lead to job losses in Australia.

“Anything that makes our industries less competitive is a risk to future job security and investment in Australia,” Mr McAuliffe said.

A carefully designed carbon price can achieve both imperatives - an effective economic response to climate change that incentivises improvements, while preserving the international competitiveness of important Australian industries.

Alcoa will continue detailed and constructive discussions with Government in the coming weeks as the regulations are developed.

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* The Electricity Allocation Factor.

Media contact: Sarah Tempest 0404 800 417