Mal Washer (Moore, Liberal Party) Share this | Hansard source

It is a pleasure to be able to talk on the Energy Efficiency Opportunities Amendment Bill 2006. I thank the previous opposition speakers for their contribution, which I thought was very constructive. The Energy Efficiency Opportunities Amendment Bill 2006 provides minor technical amendments to the Energy Efficiency Opportunity Act 2006 so that it will correctly reflect its original policy intent and facilitate effective administration of the act. The bill, in accordance with the original legislative intent, clarifies that corporations do not need to register if they are already registered, makes clear that the period allowed for program participants to submit their assessment plans and the consequential timing of the five-year assessment cycle start immediately after the energy use trigger year, and enables efficient administration by allowing the secretary’s powers and responsibilities to be delegated to acting senior executive service employees.

The proposed changes are not new policy and will not have any financial impact on the budgeted cost of the program. The Energy Efficiency Opportunities program was established in July this year when the act came into effect. Under the program, large energy users are required to assess the potential to improve their energy efficiency and report publicly on the assessment. Energy efficiency is when the same or a higher level of useful output is achieved using less energy input.

Large energy users are those which use over 0.5 petajoules, which is a factor of 10¹⁵, in a year—which equates to the electricity needs of 10,000 Australian households and would cost over $5 million. Around 250 companies in Australia would meet this criterion and they account for roughly 60 per cent of all energy used by business. Obviously, firms which use large amounts of energy would have a particular incentive to increase energy efficiency and reduce their input costs. However, there was a gap between best practice energy efficiency and actual practice. This program requires a more active engagement by asking firms to look at their unique energy circumstances and assess where improvements could be made.

Orica, which has been trialling the program assessment, has identified opportunities that could save up to $1.2 million and reduce energy gas emissions by 30,000 tonnes per year. Companies such as Alcoa World Alumina Australia, Hanson Australia, New Hope Mining, Queensland Alumina, Rio Tinto Ltd and Leighton Holdings have already registered, with many others preparing to apply before the March 2007 deadline.

A major challenge to our economic growth and living standards will be to meet a projected 50 per cent increase in energy demand while moving to a low-emissions future by 2020. The Energy Efficiency Opportunities program sits alongside a range of measures which pursue the benefits of using more efficiently, such as energy market reforms, solar cities, improved appliance and building standards, and targets for reduced energy use in government operations.

The recently released Energy Efficiency in Government Operations policy sets the strategy for Australian government agencies to achieve revised energy and sensitive portfolio targets by 2012. The 2006 policy sets targets of 7,500 megajoules per person per annum for office tenant light and power, and 400 megajoules per square metre per annum for office central services. The 2006 policy also provides a proactive management framework for agencies to identify, monitor and manage their energy consumption. This is achieved by specifying minimum energy performance standards in contracts and leases for new buildings, major refurbishments and new leases over 2,000 square metres. This was recently demonstrated with the new headquarters for the Department of Industry, Tourism and Resources. Congratulations, Minister: the new building uses innovative technologies to cut its environmental footprint and achieves 4.5 stars out of a possible five stars under the Australian Building Greenhouse Rating scheme.

Whilst improving targets for reducing energy use and government operations is very important, it is also important to consider its procurement activities. The Australian government is a significant purchaser of a range of goods and services. In the 2003-04 financial year, agencies spent over $17 billion. Government agencies’ procurement activities can impact upon greenhouse gas emissions from energy consumption in buildings and vehicles, on waste and landfill from paper equipment and office refurbishments, and on the consumption of scarce resources.

The House of Representatives Standing Committee on Environment and Heritage recently looked at green office procurement as part of its inquiry into a national sustainability charter. It found that there is a need for comprehensive policy, targets and practical guidelines if agencies are to improve their environmental performance. Many of the issues can be addressed within a context of developing the sustainability charter. Some agencies have developed successful initiatives in green office procurement, such as the Department of the Environment and Heritage. In fact, they recently launched a website, www.sustainability.gov.au, which provides other agencies with advice, checklists and case studies on best practice in this area.

Assessing and implementing change in our own backyard to improve energy efficiency and reduce emissions is critical; however, we must not lose sight of the fact that we are part of a global environment. Even though we produce a fraction of greenhouse emissions, 1.46 per cent, Australia plays an important role in bringing together major emitters to develop clean energy technologies. Australia is a founding member of the Asia-Pacific Partnership for Clean Development and Climate. The partnership is a groundbreaking alliance of six Asia-Pacific countries—us, China, India, Japan, the Republic of Korea and the United States. The partnership was created to develop, deploy and transfer cleaner, more efficient technologies and to assist in meeting national pollution reduction, energy security and climate change concerns. The partnership can make a difference, as it brings together the commitment of half the world’s population, half of the world’s GDP and the countries that contribute 50 per cent of emissions and 50 per cent of the world’s global energy.

China currently produces 14.6 per cent of worldwide emissions and is undergoing amazing economic growth. It is urbanising at a rate of a city the size of Brisbane every month. It alone will be responsible for 39 per cent of the rise in global emissions and is set to overtake the US as the world’s largest emitter. The United States currently emits around 23.5 per cent. China will not embrace change in relation to climate change if it imperils in any way its energy security, which is fuelling its economic growth.

Last month, Australia invested $60 million of the $100 million committed for 42 partnership projects. One of these projects involves $8 million in funding to CSIRO for a mobile carbon capture project, which will capture CO from coal-fired power stations. Initially, it will capture around 1,000 tonnes of CO, but the aim is to grow that very rapidly to 50,000 tonnes per year, as a demonstration plan, and ultimately to have a commercial operation of around 2½ million tonnes of CO emissions per annum. This technology is ready to be rolled out and trialled in various power stations around Australia and ultimately overseas.

The problem of going it alone without the larger emitters, as alternative policies advocate, is that it will drive jobs offshore and make no difference to the global problem. These alternative policies say we should ratify the Kyoto protocol. Unfortunately, the reality is that it will not make any difference to global climate change. The main problem is that the protocol does not include major emitters such as China and the United States. As it stands, under the protocol, global greenhouse gas emissions are expected to still increase by 40 per cent on 1990 levels by 2012, compared to an increase of 41 per cent without the protocol. Even though Australia has decided not to join this agreement, it is reducing emissions to exactly the same level that is required under the Kyoto protocol and is on track to meet its Kyoto target.

Australia continues to push the UN Framework Convention on Climate Change for a more international response to climate change which must include all major emitters. An emissions trading system needs to be fashioned so that it projects the natural advantages that this country has, and it needs to be global.

There is no one single solution to the global challenge of climate change. We need to accelerate the development of clean coal technology, as coal is one of our natural advantages; improve energy efficiency, not only in appliances and buildings but also in the transport sector; develop further alternative energies, including renewable, as they can make a valuable contribution to our energy mix; support reafforestation and carbon sink activities; and investigate in a calm, rational, well-informed manner whether nuclear energy should play a role in our energy mix. The Australian government is actively involved in all these areas. Our commitment to addressing climate change is $2 billion. We will continue to provide a comprehensive strategy of meeting our climate change objectives, both in the short term and beyond 2012, without damaging our economic growth or living standards.

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