Chris Bowen flags new tariff for imported steel and cement to help with decarbonisation
Imported steel and cement could face a tariff to ensure Australian producers seeking to reduce carbon emissions are not disadvantaged. Minister Chris Bowen told an Australian Business Economists forum in on Tuesday policies were needed to ensure a level playing field for Australian firms. 'The decarbonisation task is most acute for large industrial facilities, frequently in hard-to-abate sectors and subject to competition in international markets,' Mr Bowen said. He said now Australia had in place a safeguard mechanism to improve incentives and confidence for facilities to invest in decarbonising their operations, it was time to examine how best to prevent 'international carbon leakage risks'. But at the same time any policy change needed to protect Australia's reputation as a reliable and secure trading partner. 'We know of the potential for production to shift from countries with more ambitious emissions reduction policies to those with lower emission reduction policies and potentially resulting in increased global emissions,' Mr Bowen said. 'Carbon leakage undermines national and international climate action and has long been a key consideration in the development of climate policy across the world.' The European Union is developing a 'carbon border adjustment mechanism', which will mean from 2026 key importers into the EU will need to buy certificates equivalent to the carbon price of their emissions trading scheme. The European scheme applies to imports in five emissions-intensive sectors deemed at greater risk of carbon leakage: cement, iron and steel, aluminium, fertilisers and electricity. Mr Bowen said his department would work with academics on a review to assess carbon leakage risks, develop policy options and look at the feasibility of an Australian carbon border adjustment mechanism, particularly in relation to steel and cement. Opposition climate spokesman Ted O'Brien said the minister's announcement showed Labor's safeguard mechanism was making Australian industry uncompetitive in the global marketplace. 'By forcing up the price of cheaper imported products, Labor will continue to put upward pressure on inflation and interest rates and it will be everyday Australians who pay the price,' Mr O'Brien said. 'You can't fix one bad policy with another.' Australian Conservation Foundation climate campaigner Ella Factor said it was important the government looked at international examples of cross-border adjustment mechanisms. 'ACF would like to see a whole-of-government exports strategy to ensure a smooth transition from our over-reliance on fossil fuel exports to clean exports,' she told AAP. 'A clean exports strategy would build on domestic renewable energy and decarbonisation strategies, but go further to unlock Australia's massive potential to thrive in a decarbonising world.'