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Speech to the East Asia Summit.



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Minister for Resources and Energy, Minister for Tourism

EAST ASIA SUMMIT

Thank you Chair.

Energy security is a major international issue requiring collaborative responses.

When our Leaders signed the Cebu Declaration on East Asian Energy Security in January 2007, they put ambitious goals in place to improve energy security in the East Asia region.

The establishment of the EAS Energy Cooperation Task Force will allow us to respond to those goals and the outcomes of the last Leaders' Summit in Singapore.

The Energy Cooperation Task Force has progressed its three agreed work streams increasing cooperation in the region and is helping to address some of the most pressing issues of our time.

Urbanisation and standards of living are increasing in the region and so too is our demand for energy. The challenge before us is to ensure the energy security required for continued economic growth and rising prosperity in an environmentally sustainable way.

To do that we need policies and technologies that promote cleaner energy production and use, and improve energy efficiency. Importantly, we need policies that promote well functioning energy markets characterised by free and open trade and investment, market-based price

signals,

transparency and good governance.

It is still early days for East Asian energy cooperation, but by giving our endorsement of progress and commitment to the actions proposed under each work stream today, we will go a long way to meeting our regional energy security challenge in an environmentally sustainable way.

The primary program initiated by the Australian Government to improve energy efficiency in industry is the Energy Efficiency Opportunities Program. This program requires large energy users to identify, evaluate and report publicly on cost-effective energy savings opportunities.

The final decision of when and how to implement these opportunities rests with the market.

We commend the Co-Chairs of this work stream on their work to date, and are supportive of the ECTF's energy efficiency recommendations.

It is important that these be tailored to the most appropriate means, by which individual member nations improve energy efficiency. In Australia's case this will be though market-based mechanisms.

Concerning energy market integration, Australia is pleased to be Co-Chairing this work stream with

The Hon Martin Ferguson AM MP

The Ho

n Martin Ferguson AM MP

07 Aug 2008

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Singapore.

Australia is now well on the way to a truly national energy market, including an independent rule-making body to oversee ongoing market development and a single national energy regulator to replace state-based regulators.

Regulation of transmission functions has been moved to a national framework and appropriate incentives for investment have been put in place.

Australian federal and state governments have also agreed to phase out retail price regulation where effective competition is demonstrated. This will improve price signals, stimulate investment and facilitate the development of demand side management initiatives.

Working together, Singapore and Australia have overseen the development of a report identifying barriers to further integration of energy markets in the East Asian region and opportunities to close some of the gaps.

In particular, the report recognises that transparent investment policies and frameworks, and market-based pricing are vital to efficient, integrated energy markets. These are principles long held by successive Australian Governments.

I support the energy market integration recommendations outlined in the report to Ministers tabled today.

In the area of biofuels, the Australian Government has funded the $15 million Second Generation Biofuels Research and Development Program (Gen 2). Gen 2 is a compe titive grants program that supports the research, development and demonstration of new biofuel technologies which address the sustainable development of the biofuels industry in Australia.

Australia's view is that commercial investment in biofuels will occur over time in response to the availability of more sustainable next generation technologies, growing consumer preferences for cleaner fuels, and policy frameworks for transport fuels that embrace open markets and promote competition.

Consumer confidence remains Australia's key challenge in developing a broader market for biofuels. Consequently, we support the recommendations in this work stream relating to sustainability principles and commend progress made to date.

Together, the achievements to date and recommendations presented constitute a significant international effort to progress energy cooperation in the East Asia region.

We all look forward to continued economic growth and rising living standards in East Asia. This will require long-term energy security and our work is vital to achieve that energy security in an environmentally sustainable way. Our endorsement of the

ECTF's progress and its recommendations

today takes us another step closer to realising this goal.

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