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Wednesday, 19 August 2009
Page: 5347

Senator McEWEN (10:38 AM) —I am very pleased to have the opportunity to express my support for the government’s Renewable Energy (Electricity) Amendment Bill 2009 and the Renewable Energy (Electricity) (Charge) Amendment Bill 2009 and the Renewable Energy Target Scheme as a whole. Australia should and can lower our carbon emissions by making more use of renewable sources to generate electricity. Currently the nation has a relatively high use of fossil fuels for its electricity, and that use accounts for over one-third of Australia’s emissions of greenhouse gases. This no longer needs to be the case. The government’s Renewable Energy Target Scheme will set us on a pathway to a low-pollution future.

In what I believe is a necessary and crucial piece of legislation, the Renewable Energy (Electricity) Amendment Bill seeks to give effect to the government’s commitment to amend the existing Mandatory Renewable Energy Target Scheme with a national Renewable Energy Target Scheme, as well as increasing the annual targets for renewable energy generation. The national Renewable Energy Target Scheme will bring the Mandatory Renewable Energy Target and the proposed state and territory schemes in line with one another, thereby eradicating inefficiencies and avoiding the multiple administration and compliance costs that come from having a number of similar schemes operating across the country. We should of course congratulate state governments who have made the move to introduce renewable energy targets as well. State governments, unlike some of the opposition, understand the importance of acting quickly on climate change.

The federal Labor government has always been a government of action. We do not neglect issues and we do not fail to act. We are not divided on this matter and we are not dithering. We have a goal and we are going to get there. We are acting appropriately and in the best interests of the nation and its people. The government has shown initiative and drive in addressing the issues that face Australians and our environment. I was so pleased to be a part of this government when one of its first acts when it took office in 2007 was to ratify the Kyoto protocol. That early action set the tone and the framework for the government’s approach to matters to do with climate change and the environment. Since that early initiative, I am glad to note that we have acted decisively against the onset of global warming through the introduction of the ministerial portfolio of Climate Change and Water, and a number of subsequent pieces of legislation that are intended to fight the battle against climate change.

Last week’s vote against the Carbon Pollution Reduction Scheme did not surprise me. I have come to expect nothing less from those opposite me, especially considering they sat idle for some 11 years, ignoring the science of climate change and ignoring the facts. In rejecting the CPRS bill, the coalition has forced the government to make some changes to our Renewable Energy Target Scheme. The climate change deniers opposite may have thrown a spanner into the government’s original plans, but they have not stopped us from taking the steps towards a lower carbon emission future and Australia’s low-pollution future. Today, with the anticipated passage of these amendments to the MRET Scheme, we will move a step closer to that low-pollution future.

The Renewable Energy (Electricity) Amendment Bill 2009 will amend the Renewable Energy (Electricity) Act 2000 to implement the Commonwealth government’s election commitment to expand the Mandatory Renewable Energy Target Scheme, including increasing the target to 45,000 gigawatt hours by the year 2020. The goal is to ensure that a minimum of 20 per cent of Australia’s electricity will come from renewable energy sources by 2020. The amendment also mandates a review of the operation of the legislation and regulations underpinning the scheme to ensure that we are on track to meet our targets. It is very important that while we can set targets and legislation we do need to monitor closely whether we are achieving them.

The Renewable Energy (Electricity) (Charge) Amendment Bill covers the tax issues to do with the amendments. It amends the charge act to increase the shortfall charge potentially payable by certain liable entities—generally our electricity retailers and other large buyers of electricity. The shortfall charge should encourage greater compliance with the scheme as those companies who do not meet their obligations to purchase renewable energy certificates will need to pay the fee. In increasing the charge, this will act as a greater incentive for investment in renewable energy resources. Data published by the Office of the Renewable Energy Regulator has shown that since the Mandatory Renewable Energy Target Scheme began in 2001, very few liable entities have needed to pay the shortfall fee.

The passage of this bill will aid the nation’s fight against climate change. The Renewable Energy Target Scheme will accelerate the deployment of a range of renewable energy technologies like wind, solar, biomass and geothermal power over the next two decades. Passage of the legislation will provide renewable energy investors with legislative certainty. As I have said before in this place, if there is one thing that industry and business in Australia want from government, it is certainty. It was very disappointing that the opposition, which claims to be the party that represents business, failed to give business that certainty when they rejected the CPRS bills last week. Obviously the best way for us to create certainty and tackle climate change would have been to pass the CPRS legislation in the first instance. However, that will not stop us from pursuing this portion of our plans to address climate change and reduce Australia’s carbon emissions. The Renewable Energy Target Scheme will help transform our electricity sector and drive the low pollution energy generation that we need. Australia really needs both pieces of legislation to effect that goal of a low carbon emission future.

The renewable energy target will increase investment in renewable energy, but Australia’s carbon pollution levels will continue to rise without an emissions trading scheme. While the renewable energy target bill was originally dependent on the passage of the CPRS, the government has split these bills. We have had to resort to plan B because of the intransigence of those opposite. So while it is not quite as sensible an arrangement in terms of assistance to industry, the option that we are debating here today is the right option to at least give business and industry some greater certainty with regard to the renewable energy targets. The decoupling of the CPRS and the RET bills should be seen only as an interim arrangement, and while it is a less than perfect way of tackling climate change, it is still a necessary and essential course of action. But we will be back, as senators from this side have said before me, to pursue the Carbon Pollution Reduction Scheme. In November when those bills are returned to this place, we can only hope that the opposition sees sense or at least comes here with a position that is coherent and based on science, not on hysteria, division and a lack of leadership from those in charge of the opposition parties.

In the absence of the CPRS legislation, the scope and basis for the renewable energy target has had to be reconsidered. On its own the RET target will specifically affect those businesses that use a significant amount of electricity as part of their production process. Therefore, amendments are proposed to the bill to enable partial exemptions for those eligible emissions-intensive trade-exposed activities, as defined under the EITE Assistance Program in the CPRS legislation. In the absence of legislation to implement carbon price assistance, the RET is targeted at those EITE activities that are highly electricity intensive and therefore face a high-cost impact from the RET alone. Companies that will be eligible for interim assistance will be a subset of EITE activities that have previously been assessed as having electricity intensity above 3,000 megawatt hours per $1 million revenue. The government will undertake a formal data collection process to assess eligible activities, which are likely to include smelting silicon production and newsprint manufacturing.

The Rudd government are serious about delivering on their election commitment to Australians, a commitment made during the pre-election period. We committed to the public that we would increase the usage of renewable energy in Australia. The Renewable Energy Target Scheme will enable us to do that by taking a comprehensive approach to this issue. Across the country the RET Scheme will help transform the electricity sector. A further announcement earlier this week by Minister Wong in relation to the RET Scheme was made in order to assist existing waste coalmine gas projects to remain viable. The RET will be topped up and, in topping up the scheme, waste-coalmine-gas projects will be able to generate renewable energy certificates. That change was a result of the government listening carefully to businesses that will be affected by the renewable energy target legislation and indeed by the CPRS legislation. Throughout this process we know that the government has consulted widely, particularly with those industries that are going to be affected by all of our schemes to reduce our carbon emissions. I am very pleased to know that the minister, who has just joined us here in the chamber, has been actively out there supporting Australia’s industries during this incredibly important but also very difficult transition from a high-emission country to one that is concerned about the level of carbon pollution that we are emitting. As I said before, Minister Wong has taken bold and strong action to set the nation on a path to a different future, a future which takes into account the concerns we all have for our families and our children.

As a senator for South Australia, I know that the Renewable Energy Target Scheme will impact on my state’s burgeoning renewable energy sector, and South Australia is uniquely placed to take advantage of a low-pollution future. Our location, combined with our weather conditions, provides excellent opportunities for renewable energy sources. While only eight per cent of the nation’s population lives in South Australia, the state has around 58 per cent of the nation’s wind capacity. That has come about, I have to say, because of very strong support from the state Labor government for that new form of energy. Anybody from South Australia who travels in our regional areas looks with interest and pride at the wind farms that have been established in our regional areas. As a frequent visitor to the York Peninsula I know the importance of the establishment of wind farms there for the local farming community and the various small businesses that are located on the York Peninsula. I also note that a solar farm is already under construction near the outback town of Coober Pedy, which once completed will generate about 13 per cent of Coober Pedy’s total electricity requirements. Those are just some of the innovations that have already been adopted in South Australia. Similar sorts of schemes will be encouraged if the Senate passes this renewable energy target legislation today.

As I said at the beginning, the federal government is committed to creating and supporting innovation in the renewable energy sector, and these bills are part of the government’s multifaceted scheme and part of our policy to change the direction of power and energy supply in Australia so that whatever actions we take in the future will be taken with a mind to the future of the environment, to our nation and to a low-pollution future. We are leaders in the world, in many instances, in what we have done so far, and there is an opportunity for us to continue to be leaders in this very important public policy area. (Quorum formed)