A price on carbon will introduce costs to approximately 500 businesses which are comprised of Australia’s heaviest polluters. Some of these companies are termed “trade-exposed”, which means that they compete with offshore companies who may not be subject to the a similar carbon pricing scheme. There are six streams of industry assistance in the carbon price package.
The Jobs and Competitiveness Program provides $9.2 billion worth of free permits to trade exposed industries. They include steel manufacturers, aluminium producers and cement producers. They will receive either 94.5% or 66% of their permits free, depending on how carbon-intensive their production is. Liquified natural gas producers will receive 50% of their permits for free. The overall rate of assistance will be reduced by 1.3% per year, and the entire program will be reviewed by the Productivity Commission in 2014.
The Clean Technology Program provides $1.2 billion of grants to manufacturing industries to help them improve their energy efficiency and adopt low-pollution technology. It also includes funds for clean energy and energy efficient research and development. To qualify for such funding from the government, the company must match it dollar-for-dollar.
The Coal Sector Jobs Package provides $1.3 billion of transitional assistance over six years to implement carbon abatement technologies in the most polluting coal mines, rewarding them for reducing their emissions. It will be reviewed by the Productivity Commission in 2014.
The Steel Transformation Plan provides $300 million worth of transitional assistance over five years to encourage investment and innovation in more efficient and environmentally friendly practices in the steel industry.
The Energy Security Fund provides $5.5 billion to be used for negotiating the closure of 2000 MW of highly polluting power generators (such as Hazelwood power station which produces 1,600MW), as well as to provide cash assistance and free permits to companies who develop clean energy plans.
Small businesses (with less than $2million annual turnover) will see their instant asset write-off increased to $6,500 and be able to access a $40 million Energy Efficiency Information Grants program.
This post is based on a briefing paper from the Environment Defenders Office Victoria