While the Federal Government is pushing to begin its emissions trading scheme (ETS) in 2010, businesses are calling for the delay of the introduction arguing the scheme could significantly lift prices.
Xstrata Australia chairman Peter Coates said the success of the ETS would depend on the support of other large carbon emitters.
“We support leadership. What we don’t support is being leaders with no one following. In other words, if America and India and China do not follow, it is an absolute waste of time and enormously value-destroying, not just for our industry,” Mr Coates told The Australian.
Among other companies calling for the delay is Qantas Airways, which argues the Garnaut report’s proposal of the scheme would threaten its profitability.
“To sum it up, we estimate that an ETS as it’s currently proposed – 100 per cent auctioning – in 2010 could add up to $35 a barrel onto what we’re paying today,” Qantas chief risk officer Rob Kella told the Australian Financial Review.
Mr Kella added that introducing the scheme before other countries would disadvantage Australian-based operators, curtailing their international competitiveness.
With the Federal Government’s emissions trading likely to further increase the price of diesel, the already struggling trucking industry should prepare a system to get through tougher times, the Australian Trucking Association (ATA) said.
The draft report of the Garnaut Climate Change review proposed that the transport sector and fuel should be included in the emissions trading scheme.
If the Federal Government adopts the report’s proposal, the price of diesel is likely to rise when the scheme sets off in 2010.
ATA chairman Trevor Martyn said the draft report was a reminder of the need for a system to pass increases in the cost of fuel on to customers.
“One estimate is that emissions trading could increase the price of diesel by another ten cents per litre, although the draft report does not include updated figures,” he said.
“It is essential that every trucking company puts a system in place now to pass on increases in the cost of fuel.”
Mr Martyn said that including the transport sector in the scheme was better than more regulation, and strategies such as reviewing costs every week and imposing a fuel surcharge would enable operators to get through the introduction of emissions trading.
“One way or the other, the trucking industry will be required to contribute to reducing Australia’s greenhouse gas emissions. The advantage of emissions trading is that the industry and our customers will be able to make our own decisions about how to deal with the increased price of fuel.
“The alternative is more regulation, with stringent engine requirements and attempts to force our customers to transport their freight by rail or sea, even if those transport modes do not meet their business requirements,” he said.