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Monday, 27 February 2012
Page: 2015

Clean Energy Future Plan

(Question No. 710)

Mr Ramsey asked the Minister for Climate Change and Energy Efficiency, in writing, 3 November 2011:

(1) Is it a fact that under the Climate Change Plan, refrigerant gas which currently attracts a levy of $165 per tonne to reduce chlorofluorocarbon emissions, is to be replaced by a levy of $30065 per tonne to reduce carbon dioxide emissions; if so, has Treasury conducted modelling on the likely impact of this levy on the retail industry and households; if so, will he provide information on this.

(2) What alternative refrigeration exists for the retail industry that would not attract these levies, and how does it compare with traditional refrigeration in terms of energy efficiency.

Mr Combet: The answer to the honourable member's question is as follows:

(1) Under the Australian Government's Clean Energy Future Plan, an equivalent carbon price will apply to synthetic greenhouse gases from 1 July 2012. This will be implemented through the Ozone and Synthetic Greenhouse Gas Management Act 1989.

The existing cost recovery levy of $165 per tonne on refrigerant gas will continue to apply to all importers of these gases (in bulk or contained in products and equipment) and is not being replaced by a flat levy of $30,065 per tonne, as suggested in the question. However, the total levy payable will be proportional to the global warming potential (GWP) of the relevant refrigerant gas.

An analysis conducted by the Department of Climate Change and Energy Efficiency shows that the impact of the new arrangement on consumers is expected to be low as the amount of these gases in consumer products is generally small, making the refrigerant gas content only a small part of the overall cost of the product. For example, the price of a domestic refrigerator would increase by around $4 and the price of a new car would increase by around $18 due to the refrigerant gas contained in the air conditioner (if the full amount of the equivalent carbon price is passed on to consumers).

The Government's household assistance package takes these impacts into account and ensures that two in three households will get tax cuts or increased payments that cover their expected average price impact of both this measure and the other elements of the carbon price.

(2) It is important to note that there is a range of equipment in Australia using a variety of refrigerants other than synthetic gases such as chlorofluorocarbons (CFCs) which are banned under the Montreal Protocol, hydrochlorofluorocarbons (HCFCs) and hydrofluorocarbons (HFCs). The alternative refrigerants include carbon dioxide, ammonia and hydrocarbons which are known as natural refrigerants. Available also is HFO-1234yf, which is a new synthetic refrigerant with a low GWP of 4, highly comparable to the hydrocarbons. Uptake of lower GWP refrigerant gases is what the new policy is designed to achieve.

According to the United Nations Environmental Program, equipment using low-GWP alternatives can achieve equal or superior energy efficiency in a number of sectors, such as domestic refrigeration, commercial refrigeration and some types of air conditioning systems. In the case of industrial refrigeration, for example, hydrocarbon and ammonia systems are typically 10 to 30 per cent more energy efficient than conventional high-GWP HFC systems.