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Safeguard Mechanism changes concerning miners

Image shows coal stacks and loaders

Photo by Bloomberg

28th March 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The resources sector has expressed concerns over changes to the Safeguard Mechanism, warning that it would impact operations in Australia.

The federal government this week struck an agreement with the Australian Greens to support the Safeguard Mechanism reforms through Parliament, in an effort to reduce 205-million tonnes of greenhouse-gas (GHG) emissions to 2030.

The Safeguard Mechanism requires facilities that produce over 100 000 t/y of GHGs annually, amounting to around 215 facilities, to keep their net emissions below a baseline.

While the federal government has maintained that the reforms were a culmination of feedback from businesses, industry associations, climate groups and academics, the Australian Greens this week said that the hard cap set on emissions would see some 116 new coal and gas projects not proceeding.

The Australian Greens also claimed that the changes to the Safeguard Mechanism would see the derailment of the Beetaloo and Barossa gasfield developments.

The Australian Petroleum Production and Exploration Association (Appea) said that the changes to the Safeguard Mechanism ignored the central role that gas would play in meeting Australia’s climate goals.

“Australia’s natural gas is critical to reaching net zero in Australia and the region, supporting the transition away from coal and providing reliable backup for renewables while powering Australian manufacturing,” Appea CEO Samantha McCulloch said.

“The industry is also one of the biggest investors in emissions reduction and renewable technologies.

“Not only is new gas supply needed to support our climate change objectives, but it is also essential to avoid energy shortfalls and put downward pressure on prices. Australia needs to produce more gas to support decarbonisation across the economy and meet energy demand, as called for by the Australian Competition and Consumer Commission and Australian Energy Market Operator.

“New gas supply investment needs policy and regulatory certainty but instead, the Labor-Greens deal creates additional barriers to investment, further diminishing the investment environment and adding to the growing list of regulatory challenges facing the sector,” McCulloch said.

The Minerals Council of Australia (MCA) added that mining projects would continue to play a crucial role in providing critical minerals and metals required for decarbonisation efforts.

“Australia is better placed with its resource base than any nation to reap the benefits of this new-energy transition. This is why climate policy must thread the needle carefully.

“The MCA will be checking every detail of the amendments to the Safeguard Mechanism legislation carefully,” CEO Tania Constable said.

“The challenges to meet the Safeguard Mechanism shouldn’t be underestimated. If we are not careful, some facilities in Australia will close. Not only would that damage our economy and slash tens of thousands of regional jobs and billions in investment, it also would push the emissions reduction burden on to other nations that are less able or less willing to decarbonise.

“The Greens’ demonisation of coal also does not help the Australian economy, particularly as the nation continues to rely on coal-powered energy generation to keep the lights on and keep prices down,” she added.

 

Edited by Creamer Media Reporter

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