Greening of corporate Australia

Courier Mail
Friday 19/1/2007 Page: 30

Santos latest to push for emissions trading Cameron England, George Lekakis

INDUSTRY support for a national greenhouse emissions trading scheme is gaining momentum, with oil producer Santos joining the groundswell. Pitting itself against federal government policy, the $5.8 billion company is pushing for a scheme that will assign a cost to greenhouse gas production and allow energy producers to trade emissions permits.

Chief executive John Ellice-Flint, a confidant of Prime Minister John Howard and Finance Minister Nick Minchin, warned in the last annual report that governments must show leadership on climate change because "there is no time to waste".

In its recent submission to the National Emissions Trading Taskforce, the nation's third-largest oil and gas producer says: "A well-designed scheme will be a key component of a portfolio of initiatives to reduce Australia's greenhouse gas emissions." Mr Howard, who has resisted a national emissions trading regime and refused to ratify the Kyoto Protocol on climate change, has recently softened his stance, last month setting up a business-heavy taskforce to examine an emissions trading system.

But his Government has many times expressed its opposition to any trading scheme, arguing it would make Australia less competitive. Santos says a federal government-administered trading scheme is necessary to provide long-term investment certainty to companies in the energy supply game. It believes gas is the ideal "transition fuel" as the world moves from coal to more environmentally friendly forms of energy production.

The NETT was set up by the state and territory governments in 2004 in a bid to develop an emissions trading scheme to be in place as soon as 2010. At the moment there are a number of inconsistent emissions trading schemes and renewable energy targets across the nation.

Shell and BP foundation members of the Australian Business Roundtable on Climate Change last April are also pushing for a trading scheme. However, many local companies are reluctant to embrace the concept without guarantees that it will operate on a global level. OneSteel, Australia's second-largest steel maker, warns in its submission that it would be placed at a significant disadvantage if steel producers overseas were not subject to greenhouse constraints.

Ford Australia, while asserting that it is committed to improving fuel economy and pollution effects of its vehicles, agrees with OneSteel. "The company believes it is important that any trading scheme be globally integrated in its initial design and application," the car maker said.

AGL Energy, the nation's largest retailer of gas and electricity, supports a national trading scheme. AGL said it was having to defer making investment decisions until decisions were made by governments on greenhouse compliance.

"It is important that governments limit uncertainty by not speculating on possible changes to the regulatory environment unless the changes are likely to occur," the company told the taskforce.