Good design crucial for Emissions Reduction Fund

IN THE LOBBY: APPEA (Australian Petroleum Production & Exploration Association) has said the Australian Government’s Emissions Reduction Fund (ERF) should recognise the Australian gas industry’s contribution to reducing emissions in both Australia and Asia.

APPEA’s submission on the ERF Green Paper says the design of Australia’s climate change policy should not deter investment in the industry.

The association said the policy must be designed in a way that encourages investment in developing Australia’s enormous gas resources.

“The Australian gas industry’s contribution to global emissions reduction should not be hindered by regulations that focus solely on its local emissions,” APPEA chief executive David Byers said.

“Nor should it be disadvantaged against international competitors that do not face similar costs.”

 

APPEA believes the Emissions Reduction Fund should provide a ‘safeguard mechanism’ that will encourages businesses to decrease emissions below their historical business-as-usual levels.

The design of this mechanism is of critical importance.

“This mechanism cannot impose a one-size-fits-all approach,” Byers explained.

“Liquefied natural gas (LNG) plants are purpose-built to process widely varying gas resources for the needs of different customers.

“In applying such a mechanism to new plants, the baseline should be determined after several years of production so that the operator and the regulator can draw on several years of operational experience.

“APPEA looks forward to working with the Department of Environment to develop a potential model that would be suitable for the oil and gas industry.

“The mechanism should be applied only to emissions above business-as-usual; it should not be used as a mechanism for raising revenue.”

APPEA is of the opinion that the ERF’s must provide coverage for the industry that is as broad and as efficient as possible.

“It should form a stable and durable foundation for Australia’s national climate change policy approach,” Byers said.

“APPEA does not wish to see a return to the costly hotchpotch of schemes – at both national and state levels – that has historically characterised Australia’s greenhouse policy response.

“It should also apply to emissions across the Australian economy, including sectors that do not currently report under the National Greenhouse and Energy Reporting System.”

Website: www.appea.com.au