Carbon Tax

The objective of putting a price on carbon in Australia is to encourage a reduction in global greenhouse gas emissions as part of addressing the challenge of climate change.

Magnetite produces lower global carbon emissions in steel-making and, therefore, would enjoy a competitive advantage under an established global carbon trading scheme. (See Magnetite and the Environment)

While supporting Australia’s eventual participation in a mandated emissions reduction scheme, MagNet seeks proper recognition of the environmental benefits of magnetite in the steelmaking process under the new Emissions Reduction Fund.   Australian magnetite is highly trade-exposed and was, therefore, deserving of industry assistance under the previous Federal Government’s Clean Energy Future Jobs and Competitiveness program.  That assistance will continue until the proposed end date of 1 July 2014 as planned by the Coalition Government under its current repeal legislation.

History of the Treatment of Magnetite under the Former Federal Governments

Previously rigid policy settings applied by the Rudd and Gillard Governments’, allowed for emissions benchmarking based on data from only two Australian magnetite projects that were in production at the time the Legislation was brought in – these projects are in Tasmania and South Australia.    In December 2011, then Minister Combet advised MagNet that a level of assistance under the moderately emissions-intensive category (66%) would apply and would be  entered into the regulations of the Legislation.

This created a problem as the new wave of magnetite projects, mainly in WA, will produce considerably more magnetite than those projects, and also, have vastly different technical specifications, including a lower grade of ore and much greater ore hardness.

MagNet was working to ensure that when data from the 2 new West Australian projects was available they would be eligible for an appropriate level of assistance.  This would provide equity for new entrants.

MagNet supports consideration of the benefits of the emerging magnetite industry under any Emissions Reduction Fund

The development of the magnetite industry will drive the creation of new long-term jobs all over Australia. Deloitte Access Economics estimates the development of just a few new magnetite projects would deliver $4.5 billion to Australia’s GDP per year. By processing magnetite in Australia, the industry delivers employment and revenue, while helping to reduce net global greenhouse gas emissions in steel production.

The magnetite industry would enjoy a competitive advantage if there were an established global carbon emissions reduction scheme. It is currently eligible for some Jobs and Competitiveness Program assistance but supports the need for global carbon pricing. It seems perverse to penalise the emerging magnetite industry given its economic, regional and net environmental benefits.

The current Carbon Pricing laws aimed to ‘support jobs and competitiveness as Australia moves to a clean energy future’. Under the Coalition Government’s new Emissions Reduction Fund – Direct Action Plan it is reasonable and equitable that new magnetite projects are recognised as an energy-intensive, trade exposed industry until any mandated international scheme starts. MagNet continues to work with all political parties to seek an additional and equitable level of industry assistance for new projects.

The former Governments’ Jobs and Competitiveness Program will provide $9.2 billion over the period to 2014-15 to assist the most emissions intensive activities in the economy that are exposed to international competition. This will support local jobs, encourage industry to invest in cleaner technologies and avoid ‘carbon leakage’ offshore.

MagNet will also work with the Coalition to ensure appropriate relief under its Direct Action policy.

For more details, please refer to the attached documents prepared by MagNet for stakeholders and decision-makers.

Nov 2013 Submission to the Department of the Environment on Emissions Fund Reduction Consultation
Nov 2013 Submission on Repeal of Carbon Tax
Apr 2011 Evidence to Senate Select Committee on Scrutiny of New Taxes
Jul 2011 Submission on First Exposure Draft of Carbon Tax legislation
Aug 2011 Submission on Second Exposure Draft of Carbon Tax legislation
Sep 2011 Submission to Joint Select Committee on Carbon Tax legislation
Sep 2011 Evidence to Joint Select Committee on Carbon Tax legislation
Oct 2011 Submission to DCCEE on Clean Energy Future Regulations