Jenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Hansard source

Thanks, Senator McDonald. I do appreciate you referring to the plans that some of these businesses have in place. I think one of the things that a mature debate might recognise is that many of these businesses are thinking very carefully about their own transition to net zero.

The Minerals Council of Australia, of course, regularly issue a progress report on how the sector is moving and they are very thoughtful about the technologies that would be necessary to get there. For example, the Minerals Council's most recent report indicated:

The mining industry recognises the need to reduce emissions globally, nationally and at the sites and facilities driving Australia's resources industry.

They go on to say:

Achievement of both the 2030 target and the 2050 net zero target will require close consultation … with … stakeholders.

That is a welcome and positive engagement from the government's perspective and, I suspect, from the community's perspective as well.

The safeguard mechanism is deliberately designed to minimise the costs associated with implementation, and it provides flexibility for that reason. We've had a very big debate in recent months around the nature of the government's reforms to the safeguard mechanism, where various people have expressed views about that flexibility. But, for the reasons you describe, there are limitations on the technology available this decade for some of the covered facilities. In addition to that, in some instances the necessary investment to make it a reduction may well be somewhat lumpy. It might be something that you do at a certain point in time.

The design of the compliance arrangements allows for borrowing. It allows for banking. It allows for a business that makes a large investment now to reduce its emissions below the baseline that's required of it—in, say, this financial year—to create credits and sell them to another provider. Of course, it allows for the purchase of ACCUs which has been the subject of quite some public discussion.

All of these design features are there to provide flexibility and to allow optimal progression towards net zero whilst maintaining an incentive to get on that journey. Many of the businesses that are covered already have a public commitment to net zero by 2050, and many of them have interim targets as well.

We talked quite a bit about the modelling and analysis that has been undertaken. I would say to you that the most important feature of the policy development around this has been a very extended engagement and consultation process with business. It has run over a very long period of time. It has been supported by a Senate inquiry process. It has been supported by public consultation and the issuing of discussion papers. We have engaged deeply to understand how these impacts might bear on individual businesses and on sectors. We've done our best to strike a balance. Many stakeholders have told us that we've done so. We're providing the certainty that business needs to make necessary investments, but also getting us on the path to meet our commitments to the international community.