White paper is no concrete deal

Weekend Australian
Saturday 21/2/2009 Page: 6

THE cement industry has accused the federal Government of being "fork tongued" after learning it would qualify for fewer free permits under the emissions trading scheme than it had been led to believe. According to the industry, one of the nation's most energy intensive, it faces an extra $60 million a year in costs. Cement Industry Federation chief executive Robyn Bain warned that the difference would push production and jobs offshore to countries that had lower environmental standards.

"Economically, it's irresponsible, and environmentally, it's totally irresponsible," Ms Bain said. The Government began this week telling trade-exposed industries of the detail of its proposed ETS compensation arrangements. Ms Bain said draft guidelines showed the cement industry would qualify for less assistance than previously thought because the Government had defined very narrowly the specific activities for which free permits would be paid.

She said key parts of cement production, such as mining limestone and grinding raw material, had been excluded from calculations for assistance. It meant the industry would receive 80% of its permits free instead of the 90% the white paper had led it to believe. Ms Bain accused the Government of going back on its word.

"I think they speak with forked tongue," she said. "From our point of view, what is trade-exposed is the product itself. It makes no sense to allocate permits for only certain parts of the process." She said about 20% of the nation's cement was imported from countries such as China, Indonesia and Thailand, and she warned that without proper compensation, the level of imports would rise, threatening many of the industry's 1870 jobs, especially those in regional Australia.

Ms Bain said new investment in the industry, which turned over more than $1.25 billion a year, would likely fall. "Over time, this industry will not invest in itself and renew," she said. "The three cement companies would look to transform themselves into importers." Ms Bain said she and representatives from Australia's three cement producers (Blue Circle, Cement Australia and Adelaide Brighton) had cancelled a meeting with the Department of Climate Change's permit allocation branch planned for Monday.

"We are so off the same page there's no point having a meeting," she said. Instead, the industry was seeking a meeting with department head Martin Parkinson and would meet Climate Change Minister Penny Wong next month to urge for a change to the compensation scheme.