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representatives vote 2023-03-27#1
Edited by
mackay staff
on
2023-03-31 07:35:31
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Title
Bills — Safeguard Mechanism (Crediting) Amendment Bill 2022; Second Reading- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Second Reading - Agree with bill's main idea
Description
<p class="speaker">Chris Bowen</p><p>Today the chamber can take an important step forward to net zero. The changes in front of us might be complicated but they are simple in their intent: Australia's biggest emitters doing their fair share and making a proportionate contribution to emission reduction goals in our country while at the same time using the tools and levers to remain competitive and productive in a rapidly decarbonising world. These changes are good for the economy and good for the environment. They will see emissions reductions and support increased productivity. They'll ensure that we're acting domestically and remaining competitive internationally. They get the balance right and are a significant step forward for climate change policy in our nation.</p>-
- The majority voted in favour of agreeing with the main idea of the bill. In parliamentary jargon, they voted to [read the bill for a second time](https://peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/). This means that they can now consider it in more detail.
- ### What is the bill's main idea?
- The [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd2223a/23bd048), which is a document put together by the parliamentary library, sets out the following key points:
- * *Proposed revision of the existing ‘Safeguard Mechanism’ applying to Australia’s largest emitters is a central element of the Australian Government’s commitment to achieve a 43% reduction in greenhouse gas emissions by 2030 and net zero by 2050.*
- * *The Safeguard Mechanism commenced operation on 1 July 2016 and has, to date, operated as a greenhouse gas emissions reporting mechanism for around 212 of Australia’s largest industrial facilities.*
- * *The Safeguard Mechanism (Crediting) Amendment Bill 2022 amends relevant Acts to alter the Safeguard Mechanism so that covered facilities must reduce their scope 1 (direct) emissions in future.*
- * *The primary amendments to the National Greenhouse and Energy Reporting Act 2007 and Australian National Registry of Emissions Units Act 2011 establish the administrative architecture to create ‘safeguard mechanism credit units’ (SMCs). The amendments provide for dealings in SMCs in the same manner as Australian Carbon Credit Units (ACCUs).*
- * *Key elements of the revised scheme will be implemented via amendments to existing legislative instruments (rules) made by the Minister. The Clean Energy Regulator (CER) will also be able to make key determinations, as provided for in these instruments.*
- * *Stakeholders have expressed concern about the limited timeframe for consultation and staggered release of key documents (including legislative instruments and the Independent Review of Australian Carbon Credit Units (Chubb Review)), which they regard as limiting a fulsome consideration of the proposed amendments.*
- * *Moreover, whilst environment and climate focused groups have argued that amendments are insufficient, key industry stakeholders acknowledge the need for change but have expressed concern about particular aspects of the proposed amendments.*
<p>We know that renewables alone won't deliver our 2030 and 2050 targets. As important as they are, we need an economy-wide response. In fact, the industrial sector is projected to overtake electricity as Australia's largest source of emissions unless we act. That's why one of the key planks of our election policy was the reform of the safeguard mechanism so that it works to drive down emissions. The safeguard mechanism was designed under the former government, but then they applied settings so weak that emissions actually increased under their own mechanism. They also proposed the creation of safeguard mechanism credits to provide credits to those large industrial facilities which come in under their baseline. We supported that from opposition and we're implementing it in government. You would think this legislation would be bipartisan. It's consistent with the opposition's policy when they were in government. It's consistent with their suggestions. They should be able to support it easily. But, as has become their signature, they've opposed it without engaging in it, rendering themselves irrelevant to the conversation. In contrast, we've welcomed the constructive engagement from a number of members from the broader parliament in this House and in the Senate.</p><p>The government's consultation on the safeguard mechanism has been extensive. There have been three rounds of consultations over eight months with hundreds of submissions. There have been consultations with facilities, peak groups, climate groups and interested stakeholders. There have been round tables and many, many meetings, with consultation across the board. In the package that I've announced today we've further refined the scheme to strengthen protections for manufacturers and strategic industries. As well, we're increasing transparency in the scheme. The reformed safeguard mechanism will require Australia's largest industrial facilities to reduce their emissions gradually and predictably, in line with their national targets.</p><p>The Safeguard Mechanism (Crediting) Amendment Bill 2022 enables the safeguard facilities that reduce their emissions faster than required to be issued tradable credits. Other facilities with fewer options to reduce emissions can then buy those credits. The beauty of the safeguard policy architecture is that it enables and encourages innovation. That is what it will mean in practice. If a facility is close to its baseline and that baseline declines by a small percentage a year, the facility has the choice of buying offsets or making big capital investments that could halve its emissions. Without crediting, those capital investments are not rewarded and will inevitably be deferred. Industries not like the electricity sector—the safeguard mechanism covers aluminium smelters, coalmines, gas plants, airlines and many more—have different technologies available and different potentials for reducing emissions at different times. This bill implements sensible reforms to the safeguard mechanism to help it become a building block for putting industry on a path to net zero, maintaining flexibility and recognition that each facility will have its own path.</p><p>A number of members have put forth amendments to be considered in this chamber. The government thanks them for their engagement and I've met with them many times. We won't be supporting those amendments in this House because we are moving our own amendments, both in this chamber and in the other place, which in many instances will do similar things. Members in this chamber will of course be able to examine those amendments moved in the upper house when they come back to this House. In this House, I will move amendments to action recommendations from the Independent Review of the Australian Carbon Credit Units, the Chubb review, implementing our commitments to ensure that Australian carbon credit units have high integrity. In the Senate, the government will move further amendments to amend the objects of the National Greenhouse and Energy Reporting Act to specify that net carbon emissions from safeguard facilities decline consistently with Australia's greenhouse gas emissions reduction targets; that carbon emissions decline over time; that each facility has a material incentive to reduce emissions; and that the competitiveness of trade-exposed industries is supported appropriately as Australia and the regions seize the opportunities to move to a global net zero economy.</p><p>These amendments will also require public advice from the Climate Change Authority on how emissions are tracking against the carbon budget and, importantly, add a requirement to make sure that changes are made to subordinate legislation if the budget is not on track. To inform this advice, the environment minister would be required to provide information about emissions from proposed actions that are likely to result in a new facility being covered by the safeguard mechanism, or in a safeguard facility increasing its emissions after proving the action under the Environmental Protection and Biodiversity Conservation Act. This advice will be provided to the Climate Change Authority and to the minister responsible for the Climate Change Act. In coming weeks, I will release the associated rules which are required to enable these changes.</p><p>I often say that politics is about choices, and the responsibility that comes with those choices. The year 2030 is 82 months away. The choices we make in this parliament today will determine where we are in 2030 and, also, where our children are in future years. The changes enabled by this bill will enable 205 million tonnes of abatement, the equivalent of two-thirds of the cars on Australia's roads, from our atmosphere between now and 2030. But, beyond numbers, they will deliver policy certainty, support international competitiveness, support our industry in the transition to a decarbonising world and be a significant step on our path to net zero in Australia.</p><p>I welcome the support for these reforms recently announced by the Greens party, I look forward to the passage of this bill through the House today and I look forward to further engagement on the passage of this most important bill through the Senate this week. I commend the bill to the House.</p> <p class="speaker">Ross Vasta</p><p>The immediate question is that the amendment be disagreed to.</p><p>Question agreed to.</p> <p class="speaker">Milton Dick</p><p>The question now is that this bill be read a second time.</p><p></p> -
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