Green LNG exporters call for special treatment

Australian
Monday 15/9/2008 Page: 27

AUSTRALIA'S $20 billion liquefied natural gas (LNG) industry has called on the federal Government to create a category of "Clean Global Contributors" in its proposed emissions trading scheme. The Australian Petroleum Production and Exploration Association argues in its response to the Government's green paper that LNG plays such a crucial role in the global move towards carbon constraint that exporters of the low-emission fuel should not be penalised for the emissions associated with preparing gas for export.

Under the proposal, the Clean Global Contributors category in the ETS would sit alongside other groups, which will be compensated by the government during the initial stages of the scheme including Emissions Intensive Trade Exposed Industries (EITE) and Strongly Affected Industries.

"Australia's liquefied natural gas industry is today urging the Government to recognise a new category of export industries that fights climate change the clean global contributors," APPEA chief executive chief executive Belinda Robinson told The Australian yesterday.

"APPEA's submission to the Carbon Pollution Reduction Scheme Green Paper process calls on the government to ensure that Australian industries, that materially assist the world move to a lower emissions future, are not hampered by a domestic emissions reduction scheme operating in the absence of a broad global scheme." Australia's LNG exporters were surprised in July when the Government's green paper did not include them in the EITE category of groups, which would receive free permits as the scheme was phased in.

APPEA's CGC's proposal aimed to continue to encourage developing countries to use lowcost, low-emissions liquefied natural gas while protecting Australian exporters who become liable for the emissions created when they cool the gas to minus 163 degrees Celsius so that it turns into liquid-form and can be exported.

"The category of Clean Global Contributors would be subject to materiality tests and sit alongside Emissions-Intensive Trade-Exposed Industries and Strongly Affected Industries," Ms Robinson said. "Every extra tonne of cooled gas that the LNG industry can export to China will help avoid global greenhouse emissions of up to 6.8 tonnes in net terms.

"That's why the growth of the LNG industry is so important because clean-burning natural gas provides a vital stepping-stone on the path to lowemissions economies." While gas produces between 50 and 70 per cent fewer emission than coal when used in electricity generation, most of the emissions the industry is liable for are created when gas is refrigerated in Australia so that it liquefies and can be exported to other nations.

Any export industry that can demonstrate the ability to deliver net greenhouse reductions for the world and meet a materiality threshold should be included in the Clean Global Contributors category," Ms Robinson said.

"It's important to understand that such a mechanism would be an interim measure only to partly address the disadvantage created by a domestic emissions trading scheme in the absence of a global agreement." The LNG industry warned that more than $100 billion in investments could be jeopardised if it is not compensated in the same way as other companies that were heavier polluters and similarly unable to pass on cost increases in international markets.