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Coal mining industry should be part of carbon price

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THE HON GREG COMBET AM MP Minister for Climate Change and Energy Efficiency


GC 162/11 8 June 2011


The Minister for Climate Change and Energy Efficiency, Greg Combet, has rejected claims that the coal mining industry should be excluded from carbon pricing.

Mr Combet said the Government’s latest emissions projections show fugitive emissions from coal mines and gas projects, combined with fuel combustion in LNG projects, account for almost half of Australia’s growth in greenhouse gas emissions to 2020.

“These fugitive emissions are heading to be 10% of our national emissions in 2020 - significantly higher than in other coal producing nations,” he said.

“To achieve emissions reductions across the economy at least cost it is reasonable to expect the coal industry to play its part.”

“Coal is an important part of the Australian economy and a key sector in regional economies, particularly in NSW and Queensland.”

“However it is not credible for the coal sector, which is experiencing record prices and growth, to expect the rest of the economy to bear the cost for its pollution.”

At a hypothetical $20 carbon price, the average liability for methane emissions would be around $1.60 per tonne of coal. This would be reduced further by any abatement activity in the gassiest mines and by any potential government assistance measures for the most impacted mines.

This $1.60 a tonne cost should be compared with sale prices for metallurgical coal which are currently over $300 a tonne and for thermal coal which are currently over $120 a tonne.

Mr Combet said, as a former coal mining engineer representing an electorate with several coal mines, he was acutely aware of the issues associated with coal mining.

Coal mining employees and the public should not be frightened by exaggerated claims that a carbon price covering fugitive emissions will see a rash of mine closures.

Media contact: Mark Davis 0400 295 560; Gia Hayne 0412 060 406