Combet in dispute with coal industry

Australian
Wednesday 1/4/2009 Page: 4

Greg Combet appears to be on a collision course with the coalmining industry, which the new Parliamentary Secretary for Climate Change has been specifically charged with winning over to the Government's proposed emissions trading scheme. The coal-seat MP and former coalmining engineer confirmed in an interview with The Australian he would have "principal responsibility for consultations with the coal industry", which is incensed at its exclusion from the Government's plan to offer free permits to compensate trade-exposed companies.

Mr Combet said his discussions with the coal industry would be about allocating the five-year $750 million "transitional" fund offered to coalminers by the Government, not about the industry's demand that it should get 60% of its permits for free a demand that would boost the industry's five-year compensation to about $2.5 billion. "It is not the Government's position or intention to treat coal as an emissions-intensive, trade exposed industry because of particular characteristics of that industry," Mr Combet said.

He cited the fact that the amount of gas produced during coalmining varied greatly from mine to mine and even within the same mine, making an industry-wide compensation formula difficult. Mr Combet conceded that mines with geological characteristics that happened to make them gassy were particularly vulnerable to additional costs at a time when the coal price was falling. "I will be talking to those mines in particular about how we can use the already announced package to assist them," he said.

According to the Australian Coal Association, the $750 million package is unfair and inadequate and qualification for 60% free permits is "non-negotiable". "The coal industry believes it has been unfairly excluded from the emissions-intensive compensation even though it clearly qualifies under the Government's formula, and we are in talks with the Government and the Opposition and the other senators to make sure that we are included in that compensation scheme in any legislation that passes the Senate," ACA executive director Ralph Hillman said.

Opposition emissions trading spokesman Andrew Robb said coal should be treated "like any other trade-exposed industry". Mr Combet warned the business community that sinking the ETS in the Senate, where the Coalition, the Greens and the independents have all expressed grave reservations, could be worse for it than the costs the scheme could impose. In a speech to the Committee for Economic Development of Australia today, Business Council of Australia president Greg Gailey, calls for political bipartisanship on climate change.