Press conference - Yarwun Alumina Refinery - Gladstone, QLD

The Hon Chris Bowen MP, Minister for Climate Change and Energy
Senator the Hon Murray Watt, Minister for Agriculture, Fisheries and Forestry

---

CHRIS BOWEN: Well, thanks for coming, everyone. It’s great to be back in the energy capital of the eastern seaboard with my friends Murray Watt, Anthony Chisholm and, of course, the Deputy Mayor of Gladstone. I’ve come here today to Gladstone to announce the next stage in the government’s plan to ensure that Australia’s industries are fit for purpose in reducing emissions and staying internationally competitive.

We know that facilities covered by the Safeguard Mechanism are responsible for almost a third of Australia’s emissions. And we’re not going to reduce emissions unless we reduce emissions from facilities that are covered by the Safeguard Mechanism. Also, we know that around the world consumers and investors are demanding action on climate change and more and more competitiveness will equal action on climate change.

So, what I’m announcing today is a pro-competitiveness measure, a pro-climate measure and a pro industry measure. Now, as you know, we went to the election promising to reform the Safeguard Mechanism. It was suggested by the Business Council of Australia, it was supported by the Australian Industry Group and the Australian Chamber of Commerce and Industry. And we took that support and that policy work and we worked it up to the policy of the alternative government, and now we’re implementing it as a government.

But, of course, there’s a lot of detail, and today I’m releasing a position paper, the government’s preferred position, on a whole range of complicated and complex design matters which need to be reflected in the regulation which I’ll bring out in the next couple of months. I won’t run through all the details – we’d be here all day. But this is a balanced package which will now be open for consultation – for industry, for climate groups, for communities – to provide me and the government with feedback about our preferred options, and we will listen to that feedback and take into account suggestions going forward.

I know that inevitably when you announce a big climate policy almost inevitably half the people will say it doesn’t go far enough and half will say it goes too far. That’s fine. We work it through carefully and methodically and we get it right. And we get a good balanced package, and I think that’s reflected in what I’m announcing today.

What I’m announcing today – again, I won’t bore you with all the details – but there’s a lot in there. We’ve decided that we will require safeguard facilities to do their fair share – 28 per cent of emissions come from safeguard facilities. We’ll require 28 per cent of emissions reduction to come from safeguard facilities. We will start primarily by taking the starting position as the emissions of each facility and then over between now and 2030 we will move towards an industry baseline. We will have production intensity baselines so if production goes up or down that will be taken into account in our requirements of the safeguard facilities. We will have a cap on the price of ACCUs of $75, carbon credits. This was important to provide that stability and certainty in that least cost solutions going forward. There’s much, much more there as well.

We’ll provide support for trade intensive facilities in a two-step process. If you’re trade intensive you’ll have access to $600 million out of the Powering the Regions Fund to help you decarbonise, to invest in new technologies, co-investment with the government. And if you are particularly exposed, if more than 3 per cent of your revenue would be spent on abatement, then we’ll also consider lower baseline or a more concessional baseline reduction for you. We expect that to be very, very rare, but it’s important that it be there as a safety net.

Also, many submissions to the consultation paper said that Australia could now go down the road and should now consider going down the road of a carbon tariff for CBAM. And we will consider that along with other options. That is a big decision, not one that will be ready by this July, but one that we will consult on going forward to provide Australian industry with that extra layer of protection. It wouldn’t have been possible under the previous government. Australian industries would have been subjected to carbon tariffs under the previous government. This reform is about protecting Australian industries from having those sorts of tariffs applied to them. But we can now have at least the conversation and the consideration of Australia’s role in the carbon tariff and CBAM conversation.

As I said, there’s much, much more to it that, but these are some of the key points. This is pro climate, pro-industry, pro-competitiveness. As I said, the concept of the position paper will be out until the end of February for feedback. I look forward to getting that feedback. But this is really important. We will cap emissions from safeguard facilities and we will require our 205 million tonnes of reduction between now and 2030. That is the equivalent of two-thirds of the emissions from every car in Australia being taken out of our emissions between now and 2030. The equivalent of two-thirds of the cars on our roads being taken away from our emissions by this policy. And it will also provide Australian industry with the stability and certainty necessary to get on with the task. And I welcome my engagement cross the board with climate groups, with industry groups, with peak groups in recent months, and that conversation will continue. Of course, it comes on the back of yesterday’s announcement, the release of the Chubb review, which I talked about yesterday.

I’m going to ask Minister Watt to add to my remarks and then the Deputy Mayor of Gladstone and then I’m happy to take questions. But it’s great, as always, to be back in Gladstone. Gladstone has a very bright future as a renewable – a very strong part of our renewable economy. And this policy we’re announcing today is the next step in achieving that future. Murray.

MURRAY WATT: Thanks, Chris. We really appreciate you coming up to Central Queensland to join us on what is a very important announcement for the future of Central Queensland and it is, of course, great to be joined by Anthony and Kahn Goodluck as well.

Today is a very significant day for the future of manufacturing here in Gladstone, in Central Queensland and in every industrial powerhouse right across our country. Today’s announcement is about securing the future of these industries and these jobs for decades to come. Now, the Albanese Government went to the election with a promise to the Australian people that we wanted to have a future made in Australia. And obviously, it’s important from an environmental perspective to take steps like today’s step about reducing emissions, but it’s also vital that we do that from an economic perspective and to secure the good, well-paid jobs in places like Gladstone well into the future.

Now, speaking with Rio – and I’ve visited here many times before – companies like Rio Tinto and other big companies, heavy emitters and heavy industry around the country are already taking big steps to transition their fuel sources towards renewable power, hydrogen power. And our government is determined to work with industry to go down this path, to make sure that these sorts of plants do become more efficient, do reduce their emissions into the future but also so that they can prosper and keep people in work for a long time to come.

Now, one of the most important announcements that Chris is making today from a local perspective is that we’re not just telling industry to do this and setting rules and then walking away. We’re going to be part of this journey with industry and with communities like Gladstone all the way through. And that’s why we are putting up $600 million in our Powering the Regions Fund to assist and work with industry so that they can make these changes to become more energy efficient into the future. So they won’t be doing it on their own, we’ll be working right alongside with that kind of co-investment.

Now, it’s no surprise that groups like the Business Council of Australia, the Australian Industry Group, the Australian Chamber of Commerce and any number of individual companies are supporting this kind of move with the Safeguards Mechanism, and that’s because they know that the future of their industries and their jobs and their businesses is dependent on making these kind of changes but making them in a sensible manner. If you talk to any of the big industrial players here in Australia, they will tell you that their international competitors are fast moving down this track as well and we don’t want to get to a point where other countries have moved so far ahead of us in reducing their emissions in heavy industry that people will stop buying our products because they’re too emissions intensive.

As Chris said, we’re already seeing a number of countries around the world consider things like carbon tariffs, which means that if products are made generating too many emissions, other countries will stop buying our products, and we don’t want to see that happen for places like Gladstone and other industrial powerhouses like it. So that’s why we are keen to work with industry to make these changes, to get emissions down but also to make sure that we secure those jobs in places like Central Queensland well into the future.

Can I just introduce the Deputy Mayor of Gladstone, Kahn Goodluck, to add to that as well.

KAHN GOODLUCK: Thanks, Murray. And, yeah, it’s a pleasure to be here with Minister Bowen and Minister Watt and Senator Chisholm. The Gladstone region is the industrial and the manufacturing powerhouse of our nation, and we need to make sure that we’ve got a positive plan and a positive pathway forward to make sure that facilities like this behind us – the Yarwun Alumina Refinery, the Queensland Alumina Refinery, the Boyne Smelter, all of the other industries in our region – can still exist and thrive in a post-2050 world and provide the jobs and opportunities to our communities.

So, we welcome this announcement, particularly equipped with a $600 million fund, that industries like Yarwun and others in our region will be able to access and it’s going to help them to be able to decarbonise their processes and transition to make sure that Gladstone can remain the industrial powerhouse in a post-2050 world.

JOURNALIST: With that, you know, $600 million fund helping a lot of businesses here in doing that, does that give you more confidence obviously with manufacturing being the heart of Gladstone and the jobs and all of the investment?

KAHN GOODLUCK: It certainly does give more confidence, but I’m happy for Minister Bowen to take that question.

CHRIS BOWEN: Well, it certainly gives me more confidence and I’m glad it gives Kahn more confidence. It’s about working together. We recognise that this is a national endeavour. You know, it’s important, and Rio is stepping up and making their investments, as the other facilities are. But these are big investments. This is a national endeavour, so it’s right that there be national co-investment. $600 million is a substantial amount of money to be made available, and I’m very confident it will assist in that transition.

JOURNALIST: Do you think it can really reduce emissions but also encourage investment in places like Gladstone. Can the approach really do both?

CHRIS BOWEN: Absolutely. I mean, the world’s climate emergency is regional Australia’s jobs opportunity. I mean, the world is going to be demanding more and more renewable energy and things manufactured with renewable energy. And Gladstone and the areas like it right across Australia – whether it be the Hunter, the Illawarra, Collie Bunbury, Portland or Whyalla – are so well placed with the right policy settings. In the absence of the right policy settings Australia was missing out and falling behind. With the right policy settings, which we are putting in place, you know, here we are seven months after the election with a big step forward on this major policy piece giving Australia the policy framework to take the most of those opportunities.

JOURNALIST: Minister, a disproportionate number of those emitters are based here in Queensland. Your government has previously said that no mine or manufacturer would be disadvantaged compared to their international competitors. Do you stand by that guarantee?

CHRIS BOWEN: Yes.

JOURNALIST: And practically in this policy what are we doing to ensure that?

CHRIS BOWEN: And that principle of comparative disadvantage and avoiding it is embedded in the position paper that I’m putting out today, whether it is the access to the $600 million in support, whether it is if you’re a trade intensive baseline adjusted facility, which means you are required to spend more than 3 per cent of your revenue, then you have the access to potentially a different baseline reduction, whether it’s the conversation about the carbon tariff going forward and CBAM and the work on that. That is embedded and, you know, I think that’s reflected in the industry submissions to the consultation paper I put out last year. These are the sorts of ideas that we’ve considered and put forward by industry as to how they could be shielded in that comparative way. Because we don’t want to see emissions going offshore. There’s no point in shutting down something in Australia and it being produced elsewhere with the same or more emissions. Nobody benefits from that. And that was embedded all throughout the policy position.

JOURNALIST: What will sites like Yarwun be doing to, I guess, cap and reduce emissions?

CHRIS BOWEN: Say that again, sorry.

JOURNALIST: Sorry. What will sites like Yarwun be doing to sort of reduce emissions?

CHRIS BOWEN: Well, we’ve got the very senior manager of Rio here today – the Australian Chief Executive and Head of Aluminium, so they might be prepared to add, but they’re make big investments. And I give credit where it’s due to Rio and to companies like it. We are not going to make this transition without companies like Rio investing heavily. We need traditional industries in Australia. I want to be a country that makes things. I want Australia to be making aluminium and steel for decades to come and beyond. But we need to do so in an increasingly renewable way and in an increasingly carbon neutral way, and companies like Rio are absolutely essential to that transition. I welcome the big investments they’re making.

JOURNALIST: It’s very industry and very specific heavy announcement that you’ve got here today. Obviously, the paper is going out to industry. But what does, you know, the average person watching along at home, what is that important message for them to take home?

CHRIS BOWEN: Well, I think the important message for people is, one, Australia is doing its bit on climate change. You know, we had 10 years of denial and delay and we’re catching up really fast, and Australia should do its bit and we are doing our bit. But for too long Australians were told this would come at the cost of jobs. It was always the lie and it’s never been more of a lie today. The key to the jobs of the future is good climate policy, and that’s what we’re delivering today.

JOURNALIST: Climate advocates, they have sought a surrender limit on the use of carbon credits to meet the baseline. Was that approach considered?

CHRIS BOWEN: I considered all approaches. And, again, people are free – and I know will – put in submissions to this position paper. There will be – I doubt very much every submission to me in the government says, “Geez, you got all this right. You know, every decision you made, these 15 big decisions, you just got them perfect.” That world doesn’t exist in climate policy. There’ll be some who say, “We like this bit, don’t like that bit. Could have done that bit better.” We have developed a balanced package, which I think there’s – you know, people in industry can look at it and say, “We were listened to here.” People in the climate movement can look at other elements and say, “Well, they took our feedback on board there.”

I fully expect that there’ll be people who say they have a different view about the design. That’s what this process is for. This is the way the Albanese Government works. We went to the election promising to do this. Issued a discussion paper in August. Hundreds of submissions. Every single submission I read. You know post-it notes and highlighting and things underlined, which then feeds into the position paper I’m releasing today. And there’ll be more submissions and I’ll read through them all. And if there’s adjustments that I think the case is strong, then we’ll consider those adjustments. That’s the way we work.

JOURNALIST: And safeguard businesses, have they given you feedback on this so far?

CHRIS BOWEN: Yes.

JOURNALIST: Or what do you expect them to say?

CHRIS BOWEN: There’ll be a range of views. I spoke to some key stakeholders yesterday. I’m not going to speak on behalf of people, but yesterday I spoke to the head of the Business Council, the head of the AIG, the head of ACCI, the head of the Minerals Council. I’ll leave them to make their comments. I spoke to the Chief Executive of Rio today. You know, they’ll make their own comments. But I very much warmly welcome the engagement of industry.

This is not about anybody versus industry – this is about working with industry. On the night of the election the Prime Minister said we would end the climate wars. This is about working with people to get our emissions down.

JOURNALIST: Do you think safeguard businesses will have trouble meeting that 4.9 per cent decline rate?

CHRIS BOWEN: It’s ambitious. It’s ambitious. But it’s what we need to get to 43 per cent emissions reduction by 2030. It’s a fair share. Some people – to go to, you know, some of the questions about who thinks what, a lot of the submissions said safeguard facilities should do more than their fair share. And a lot of submissions said safeguard facilities should do less than their fair share because it’s hard to abate. I’ve made a decision that safeguard facilities should do their fair share. I think that’s reasonable. Again, there’ll be some people who say it should be have been more, some people will say it should have been less. I think it’s pretty reasonable to say that 215 facilities are responsible for 28 per cent of our emissions, therefore, they’ll be responsible for 28 per cent of our emissions reduction. And to do that, it’s 4.9 per cent a year.

JOURNALIST: So, who of those companies in their submissions urged for a slower pace to allow them to invest in the technology because there has been those previous threats of job loss or closures? Given you’ve stated that 4.9 per cent, are you confident that these closures and these job losses won’t happen?

CHRIS BOWEN: Yes, but to just clarify, I haven’t stuck with 4.9. There was a range in the consultation paper. 4.9 is the result of the policies that we’re putting in place. But I just make this point: if you start slower then you’ve got to move real quick later on to catch up. You know, if we are serious about 43 per cent emissions reduction, if you say we’re just going to start at 1 or 2 per cent and we’ll worry about it later, then you’re going to have to get to reductions of 10 per cent closer to 2030. That’s not sustainable. We’ve delayed for 10 years. Now is not the time for more delay; now is the time to get on with it.

JOURNALIST: Will that emissions cap have any effect on energy prices as well?

CHRIS BOWEN: No, energy producers aren’t covered by the Safeguard Mechanism. Okay. I’m getting the feeling that’s a wrap. Murray, do you have any portfolio matters?

MURRAY WATT: I should probably just mention –

JOURNALIST: Sorry, I just had some questions from Canberra. Yeah, so the Chinese Ambassador is holding a media address in Canberra. What do you hope will come from that address today?

CHRIS BOWEN: Well, I’m not going to comment on a particular speech or anything particularly in that speech. I just say this: the government under the Prime Minister and the Foreign Minister’s leadership has made a priority of engagement with our largest trading partner. That should not be a controversial thing. You know, really, it should not be controversial. It’s in Australia’s best interests. We act in accord with our values as a country and our interests. And that means we won’t agree with every country about all the things at all times, including China. And we’ll have differences of view about some things, and there’s been some of that in recent weeks. And that’s fair enough. But when you have a government of adults and a mature conversation and people not trying to make cheap political points about a relationship with China but actually adults in charge, you have engagement. That’s what Anthony and Penny have provided, and that’s what we’ll continue to provide.

JOURNALIST: And the Japanese Ambassador has warned your government to remain vigilant amid China’s aggression in the Pacific. What’s your reaction?

CHRIS BOWEN: My reaction is that the Albanese Government will always act in Australia’s best interests in line with our values and our interests.

JOURNALIST: And what do you think about the revelations China is not sharing accurate COVID data with the world? Do you call on China to be more transparent?

CHRIS BOWEN: Well, again, I simply say this, Minister Butler made a decision last week and he made it clear that part of his reason for doing that is transparency of the data in relation to COVID infections. And the more transparency and data we can get from any country going through a COVID wave, like China is, the better. And we would welcome that.

SPEAKER: Murray, do you want to say something?

MURRAY WATT: Yep.

CHRIS BOWEN: And just an update on floods.

MURRAY WATT: Yeah, I just thought I should briefly update – some of you may have seen the news that unfortunately a body has been found today in South Australia as a result of the floods that we’ve been seeing there. That’s obviously another tragic loss of life and another reminder to people to stay extremely safe around flood waters. It’s only the beginning of January and the reality is we are likely to see more floods in other parts of the country. So, please take extreme care if you are near flood waters.

You may have seen I was in Broome in the Kimberley and Fitzroy Crossing with the Prime Minister yesterday and we’ve obviously announced support for those communities. As of today, there are now eight Defence Force aircraft, a combination of planes and helicopters, stationed in the Kimberley along with about 200 Defence Force troops. And we thank them for their efforts in doing so to make sure that we can start speeding up the damage assessments of properties and the infrastructure repair job that’s going to be lying ahead.

The other thing I should mention in the disaster space is that today the Albanese Government has announced and opened applications for our new Disaster Ready Fund. This was our flagship election commitment in the disaster management space. It’s about making sure that Australia becomes much better prepared for future natural disasters. Through this fund, we’ll be investing up to $200 million per year in disaster mitigation, whether that be flood levees, drainage improvements, bushfire evacuation centres, fire breaks, all sorts of things, to make sure that we can try to protect Australians from the national disasters that we know are coming in the future.

JOURNALIST: What is the government’s hope for trade relations? Will we see sanctions dropped?

MURRAY WATT: Sure. Well certainly I can speak from an agriculture perspective, and there’s no doubt that the breakdown in the relationship between Australia and China over the last few years has cost many farmers in Australia and many rural communities very large amounts of money, whether we’re talking about the wine industry, rock lobsters, barley, a whole range of products that have been affected – meat processing, which is important here in Central Queensland. And that’s why, as Chris says, we think it’s a good thing if we can stabilise the relationship with China.

We all know that it’s going to take time. It’s not likely that we’re going to be seeing, you know, things happen overnight, but if we can stabilise that relationship and encourage more of that dialogue, that can only be a good thing for Australian farmers, meat processors and rural communities.

JOURNALIST: Just a quick question to you, Kahn, sorry, just off of that: just with this fund, obviously it’s a significant sum of money. What’s council going to be doing to ensure that the industry here in Gladstone gets their fair share?

KAHN GOODLUCK: Yeah, well, I know Minister Bowen has got a roundtable this afternoon that we’ve invited many stakeholders to. So, we’ll be certainly having the conversation with industry, all of across our region, to make sure they’re aware of what’s available and what they can take advantage of.

CHRIS BOWEN: That’s a wrap, guys. Well done. Thank you.