Back in 2020, the government realised that the industrial allocations in the ETS - supposed to protect large polluters from unfair competition from countries who didn't pay for their carbon - was overallocated. They were giving away too many free credits, resulting in windfall gains to polluters. So, they started talking about reducing industrial allocations (in 2024, letting polluters rort another hundred million dollars from us). Now, they've introduced a new bill to tweak the industrial allocation scheme. And as might be expected from this useless pack of quislings, it seems designed to massively increase pollution subsidies.
The problem is in section 15 of the bill, which amends the clause which defines eligible industrial activities. At present an industry is defined as "highly emissions-intensive" (and eligible for a 90% pollution subsidy, decreasing over 40 years) if it emits more than 1600 tons of CO2 per million dollars of revenue. An industry is "moderately emissions-intensive" if it emits more than 800 tons per million dollars. The bill would scale these thresholds to a carbon price of $25 / ton - which we haven't seen since pre-2020), which effectively lowers them significanly.
To put that in concrete terms, at today's carbon price of $81 / ton, the threshold for being "highly emissions intensive" will be 247 tons per million dollars of revenue. Which means that every current moderate activity will now be reclassified as "highly emissions-intensive", giving them an immediate 50% increase in their subsidy. As will a whole bunch of other industries that previously were not considered emissions-intensive at all.
And in practical terms, rather than fixing the carbon rort, Labour will be massively expanding it. They'll be giving free carbon credits to more and more polluters, at higher and higher rates, effectively turning the "polluter pays" principal on its head.
Oh, and while they're at it, they'll also be reducing the penalty for not paying your ETS liabilities when deforesting from triple the carbon price, to half or a quarter of it. Which means a direct financial incentive for deforestation. Merry xmas!
This is not consistent with reducing emissions. It is not consistent with human survival. Always foot-draggers, this government has now flipped into directly encouraging emissions. Some "nuclear-free moment".
