EUAA Submission: Safeguard Mechanism Reforms Positions Paper
Emily Wood | February 24, 2023
‘…Like all business, EUAA member companies are also dealing with supply chain and labour constraints, significant increases in material costs, rising interest rates and broader impacts of inflation on overall costs and consumer demand. These issues will be accelerated in the short to medium term as the staggering levels of government support in the USA (Inflation Reduction Act) and EU (in response to the Russian-Ukraine war) act as a powerful magnet for people, material resources, technology and capital. Even when the conflict in Ukraine ends, these significant global influences will have a profound impact on the scale, cost and rate of change of emissions reductions in Australia, including the energy system transition.
Against this backdrop some industry lobbyists are calling for significant government/taxpayer/energy user funded support so that we can become an energy export “superpower” of various descriptions. Unfortunately they don’t seem to realise that we would be competing against actual superpowers (such as the USA and EA) in pursuing this goal in the near-term. We caution against government pursuing this export superpower dream given the circumstances we face and that before we think about competing for export customers that we ensure our domestic customer’s needs (such as affordable, reliable energy and ensuring sovereign capability) are met first. We are an LNG export superpower, which to date has not worked out that well for domestic gas users.
All of these issues are having a cumulative impact of business and households. This is the broader environment that the Safeguard Mechanism reforms are being contemplated by large industrials in hard to abate sectors. As we gain an understanding of what the combination of these significant external factors and tighter emissions reduction targets via a revised Safeguard Mechanism will mean, a number of questions remain for government and industry:
• What do you want the economy to look like in 2050?
• What industries do you deem strategic to building sovereign capability and wealth?
• What industries do you deem strategic to rebuilding the energy system over the coming decades?
• What industries are you prepared to “let go” if suitable abatement options do not emerge?
While the Positions Paper leans toward a certain direction, a shared understanding of the answers to these questions remains elusive….’
Please download attachment to read full submission.
