A 60% rise in industrial emissions points to failure of Coalition’s ‘safeguard mechanism’ | Australia news
Industrial greenhouse gas emissions in Australia have risen 60% in the past 15 years, putting the country on a path that, if it continues, will lead to it missing the target set at the Paris climate conference.
That is the conclusion of an analysis by energy and carbon consultants RepuTex, which examined the rise in industrial carbon pollution – including from oil and gas extraction, mining and large-scale transport – in the period covered by Australia’s 2030 emissions target, starting in 2005.
The resulting report highlights the failure of the Coalition government’s “safeguard mechanism” policy, which was promised to limit carbon pollution rises so cuts paid for by taxpayers through the emissions reduction fund, the main national climate policy, were not just wiped out by increases elsewhere.
RepuTex found emissions in sectors covered by the safeguard mechanism had grown from 89m tonnes in 2005 to 142m tonnes in 2019, and were projected to reach 187m tonnes by 2030.
RepuTex’s executive director, Hugh Grossman, said emissions from electricity generation had fallen 9% since 2005, but those gains were being eroded by unchecked carbon pollution in other areas.
“While we have seen record levels of investment in renewable energy technology in the electricity sector, the industrial sector has been largely missing from the national emissions reduction challenge,” he said.
Grossman said unrestrained industrial emissions remained an issue many MPs did not want to acknowledge or discuss. They were expected to pass those from electricity in 2023 to be the nation’s largest polluting sector.
“Ultimately all sectors need to play a part in long-term decarbonisation, to varying degrees, either by reducing emissions or just offsetting emissions growth,” he said.
The analysis found the biggest relative surge in emissions since 2005 had been in the oil and gas industry, reflecting the rise of one of the world’s biggest liquefied natural gas (LNG) export industries over the past decade from a low base.
Other significant increases were from direct combustion at mining sites, venting of fugitive emissions in fossil fuel extraction, and metals, chemicals and minerals processing.
The safeguard mechanism started operating in 2016. It sets a pollution limit, known as a baseline, for every industrial facility across the country that emits more than 100,000 tonnes annually. The limit was initially based on either a facility’s historic emissions or an independent forecast of future emissions.
Companies that exceeded their baseline were expected to buy carbon credits to offset the additional emissions, or pay a penalty, but in practice this has applied in only some cases.
Many facilities have applied for, and been granted, an increased limit. Last week, BHP coal and iron ore mines in Western Australia and Queensland, Alcoa’s Portland aluminium smelter in Victoria and a Boggabri coalmine in New South Wales were each given the green light to emit more.
An analysis by RepuTex found the allowed emissions approved by the Clean Energy Regulator increased 32% between 2015 and 2018. Not all companies emitted up to their baseline. Actual emissions under the scheme increased 12% over that time.
Recently adjusted national emissions data suggests pollution has stayed flat since 2014 under the Coalition. As RepuTex suggests, there have been decreases from electricity, and agriculture due to the drought, but increases from industry and transport.
While the government claims it is meeting and beating climate targets, emissions this year are expected to be only 0.3% lower than 20 years ago. The national target over that time is a 5% cut.
In 2016, the then environment minister, Greg Hunt, said the safeguard mechanism would ensure emissions cuts contracted through the emissions reduction fund were not offset by significant increases above business-as-usual levels elsewhere in the economy.
The description later changed. A government climate policy document released before last year’s election said the mechanism required Australia’s largest emitters to “measure, report and manage” their emissions.
Under changes being introduced this year, all facilities will be moved to limits based not on their total emissions, but on emissions intensity – how much they expect to emit per unit of production. As currently proposed, if companies lift production they will be able to increase carbon pollution without penalty.
In theory, these limits per unit of production could be reduced over time to cut emissions and encourage a shift to clean practice – a change Labor proposed without detail before the 2019 election.
The Morrison government is divided on climate action and the future of coal-fired power. It has commissioned a review of its climate policies led by the businessman Grant King, and has promised it will this year release a technology investment roadmap, an electric vehicle policy and a long-term emissions strategy.
Official projections suggest national emissions will be about 16% less than 2005 levels by 2030 under current policies – not enough to meet Australia’s target of a 26-28% cut without the use of a controversial accounting measure that was criticised by other countries at the UN climate conference in Madrid in December.
The government is facing calls from business leaders and the energy industry to consider a climate action bill by the independent MP Zali Steggall that includes a proposal for a target of net zero emissions by 2050, an emissions budget, and assessments every five years of national climate change risk.