Senate debates

Wednesday, 17 June 2015


Renewable Energy (Electricity) Amendment Bill 2015; Second Reading

5:32 pm

Photo of Ricky MuirRicky Muir (Victoria, Australian Motoring Enthusiast Party) Share this | | Hansard source

I will backtrack just a little from where I was in my speech where I pointed out that the inclusion of woody biomass into the renewable energy target is not a new suggestion. I pointed out that as a matter of fact for 10 years it was included in the RET and, despite outright lies from the Greens and now Labor—or certain factions of it—and extreme environmentalists, it did not lead to one extra tree being harvested; it only led to one RET being handed out.

I have received many emails and phone calls from constituents who are gravely concerned about the so-called destructions of our native forests and, rightfully so: it is not their fault that they have been misled. However, their concerns are about issues that are not related to the inclusion of woody biomass at all.

The inclusion of woody biomass is to include by-products of current harvesting operations as an eligible source of energy in the RET. We are not on about harvesting or logging any extra forest; we are on about utilising biomass that is left over.

We are speaking about a by-product that will rot and break down releasing carbon or methane into the atmosphere as it currently does or get pushed into the windrows and burnt. We are speaking of utilising a by-product of current harvesting projects; we are not speaking of cutting down a single extra tree, not one—just like it was when woody biomass was included in the RET for 10 years before the Labor party made an agreement with the Greens. This was a decision that the Labor party made, to the best of my knowledge, without even consulting the forestry division of the CFMEU.

Perhaps now is a good time for me to remind the Labor party that, before I got involved in politics, I was a paid-up union member and what one would call a traditional Labor voter. Now would be a very good time to remind you of who your traditional voters are. By trying to appease the Green votes, all you are doing is getting a nod of approval from people who are going to vote green anyway.

I would like to point out correspondence that I have received from the CFMEU where around 30 delegates from within the timber industry have pleaded for the support of their jobs, saying:

The ALP's proposed continued discrimination of electricity derived from waste, product or bi-product derived from biomass from native forests as an eligible source under the RET is extremely disappointing and unfair. The proposal is also without any justification as it is clear from the regulations that only wood waste from sustainably managed forests is permitted and that electricity generation must not be the driver for the harvesting operations—

that means that we cannot harvest forest just to generate electricity.

In support of our jobs, we would appreciate it if you could use your influence to ensure the defeat of the ALP amendment to the bill.

I would also like to make a point that a misleading meme on social media is not a fact and, as a matter of fact, can create a lot of unnecessary unrest for those who actually believe what the meme might say but also for those who are employed in an industry who think that their jobs are going to be axed.

I have a photo here that I am happy to table—if the chamber is happy for me to do so—which shows the extent of what is utilised in the timber industry and, in this instance ASH—Australian Sustainable Hardwoods—Australia's largest hardwood timber mill, a mill with which I am extremely familiar as I worked there for a number of years. The picture helps highlights the protection that the high-value test contributes to ensuring that wood waste would not be a driver in harvesting operations.

It clearly shows an offcut which is 50 millimetres by 38 millimetres by about 30 centimetres in length. This is then joined by a finger joiner—again, I have worked in this industry and this mill; I have seen it with my own eyes; I know—with other similar lengths and turned into high-value products such as floor joists, window components, door components, stair stringers and more. These products are then sold to manufacturers at set lengths minimising their waste. So the manufacturers are able to buy product which is essentially made to size out of waste which has not been burnt for electricity.

What waste is left over is then turned into chips and sold to Australian Paper, Maryvale.

By ensuring the procurement of Australian paper we will then ensure that the high-value test would still apply on waste. By not procuring Australian paper we run the risk of seeing Australian manufactured paper and the industry that is supported by it cease, leaving us to rely on products that are imported from countries that do not have our chains of custody from forests that may not be sustainably managed. If we do not utilise the by-product of our timber industry and let our timber industry go down the drain, we are still going to be buying products from somewhere else, where forests are not managed as well as we manage our forests here.

Some of the sawdust from Australian sustainable hardwood is used to create heat to operate their kilns to dry the timber. If they were not using that sawdust—which is dry, so it burns very clean—it saves them about $4 million every year in gas bills. So, not only will we be having waste products from milling going to waste and breaking down but also the mill would have a $4 million gas bill. We would have a product breaking down and releasing emissions and also using emissions to dry the product in the first place instead of utilising what was already there. In the timber industry in Victoria—and I mention Victoria because it is my state—it will be 21,000 jobs. That is a lot of people whose jobs will be affected if we do not respect what industry we have.

Another point I would like to make before finishing is that it is suggested that woody biomass comes from AFCS-certified native forests. That is all good and fine except that there is not one single native forest that is actually under AFCS certification. So, for us to move an amendment like that would essentially mean nothing.

In conclusion, I think it is important that we do get the renewable energy target through, as I said at the very start. We need bipartisan support. We did see that in the lower house, and I would like to see the target go through this house, unamended, as is—or at least, if there are any amendments, with support from both sides.

I seek leave to table a document.

Leave granted.

5:39 pm

Photo of Glenn LazarusGlenn Lazarus (Queensland, Independent) Share this | | Hansard source

I believe in climate change and I believe that if the world does not act to change our ways we will continue to expedite our progress of evolution to extinction. To quote David Suzuki:

If we want to address global warming, along with the other environmental problems associated with our continued rush to burn our precious fossil fuels as quickly as possible, we must learn to use our resources more wisely, kick our addiction, and quickly start turning to sources of energy that have fewer negative impacts.

David is just one of many internationally revered and renowned environmental champions committed to raising awareness of climate change and the need for the world to act before it is too late. And these global champions are not alone. Countries across the world are actively putting programs in place to increase adoption of renewable energy. The role of the federal government is to manage our country in the most responsible, ethical and diligent way possible. In doing this, the people of Australia expect the federal government to demonstrate leadership that is incorruptible, fair, forward thinking and, importantly, in the best interests of all for today and our future tomorrow. Sadly, we have witnessed poor leadership from the Abbott government in relation to many issues, including our country's commitment to and management of renewable energy. Evidence, scientific research and general understanding tells us that climate change is real and that the burning of fossil fuel is a major contributor to this. We know that the only way forward is to transition from burning fossil fuel to using cleaner, greener energy. In fact, the G7 has just announced its commitment to completely eliminate the use of fossil fuel by the year 2100.

Australia currently has a renewable energy target of 41,000 gigawatts. The RET is a critical tool in providing the infrastructure and target necessary to facilitate and enable the uptake of renewable energy across this country. Australia's RET is in step with the rest of the world. As I have already said, countries across world are adopting clear, progressive and well-defined renewable energy targets. They are doing this to encourage, facilitate and support investment in and the adoption of renewable energy. Since the Abbott government has come to power they have done nothing but criticise and demonise the renewable energy target and the renewable energy sector. In fact, the Abbott government's reluctance to commit to the RET of 41,000 has eroded confidence in the sector, which has in turn caused a significant and sharp downturn in investment in the renewable energy sector. I can only assume that political donations being made by rich multinational mining companies to the pockets of the coalition are affecting the federal government's decision making and policy decisions around renewable energy. Is this the type of leadership we need in this country? I say no.

Thankfully, some states and territories across Australia are doing the right thing in relation to renewable energy. The government of Queensland has committed to a renewable energy target of 50 per cent by 2030. The ACT government has put in place a renewable energy target of 90 per cent by 2020. The South Australian government has put in place a renewable energy target of 33 per cent by 2020. Despite this, the federal government has not only demonstrated poor leadership on renewable energy but has now jumped into bed with the Labor Party and agreed to reduce Australia's renewable energy target from 41,000 gigawatts to 33,000 gigawatts.

I cannot and will not be part of this dirty deal that reduces Australia's renewable energy target and our country's commitment to the renewable energy sector. If the Abbott government and the opposition are successful in reducing Australia's renewable energy target, Australia will become the first country in the world to reduce a RET. I cannot and will not be part of this despicable act. For the sake of my children and all Australians and our country's future and role as an international citizen in progressing the best interests of the world I want to do whatever I can to stop this dirty deal from taking place.

That is why I have developed several amendments to this bill to maintain the RET at 41,000 gigawatts and to commit 8,000 gigawatts of the 41,000 to large-scale solar. Australia is one of the biggest adopters of solar power across the world. We need to do more in this country to support the solar power industry, to support solar power users and to reduce the costs associated with renewable energy. Maintaining our commitment to the RET and the renewable energy sector will achieve this by encouraging investment and innovation.

We also need to develop a national feed-in tariff rate for all users of rooftop solar. This will provide the people of Australia with certainty and consistency in relation to the benefits arising from solar power technology. I believe I have the support of all Australians in my desire to stop a reduction in the RET and to encourage investment in the renewable energy sector. Our future is too important. I should add that the Abbott government is also seeking to include the burning of native forest wood in the RET. I have serious concerns regarding this and, as a result, I will also be putting forward amendments to address these concerns in this bill.

In summary, I do not want Australia to become the first country in the world to reduce a RET and I do not want unfettered cutting down of native forest timber to be included in the RET. I am standing up for all Australians and I hope the Senate will support me by voting for my amendments. If the Abbott government had taken a responsible approach to the management of the RET from day one, shown strong leadership and pulled up its sleeves to assist and support our country to reach the 41,000 target by 2020, we would not be in the mess we are in today. Sadly, the Abbott government's deplorable approach to renewable energy has sent our country backwards, hurting investment, our international reputation, local jobs and local businesses. We now have much to do to restore confidence in the renewable energy sector and to put our country back on the right path to cleaner, greener, more responsible renewable energy. Supporting my amendments will assist in this process.

5:47 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | | Hansard source

I thank all senators who have contributed to this debate on the Renewable Energy (Electricity) Amendment Bill 2015. There has been a range of contributions, and I acknowledge that nearly every contributor has expressed their principled support in some way, shape or form for the ongoing development of the renewable energy industries in Australia and the importance of renewable energy as part of our energy make-up and mix. Different senators have brought different perspectives as to how that is best achieved, but I am pleased that it has been broadly a range of constructive contributions, notwithstanding some of the finer points of difference that different senators may have.

In relation to this legislation, it is important to understand that we are standing by the attainment and policy of a 20 per cent target for renewable energy by 2020. But what is happening under the current legislative framework is that we are tracking towards 26 per cent or more, which would result in Australians being required to pay for excessive generating capacity that is not needed in terms of our energy sector. This bill seeks to achieve balanced reform. It will provide certainty to industry, encourage further investment in renewable energy and better reflect market conditions. It will also help Australia to reach its emissions targets and protect jobs and consumer interests. On best available expectations, it will lead to around 23 per cent of Australia's electricity being sourced from renewable energy by 2020, still significantly more than the originally intended 20 per cent from when the current legislative settings were put in place.

This will be done in significant part by reducing the annual large-scale renewable energy target, such that it will reach 33,000 gigawatt hours in 2020, as against the current setting of 41,000 gigawatt hours. It will be maintained at 33,000 gigawatt hours from 2021 to 2030. This will help to encourage further investment in renewable energy by providing market stability and confidence, achieving a better balance between supply and demand. It means that the many renewable energy projects that are ready to roll will be able to proceed with certainty around the target, which I expect and am pleased to note appears to enjoy bipartisan support. It will better reflect market conditions.

The reality is that Australia has an oversupply of generation. Electricity demand is falling. The modelling and expectations on which the target had been set have proven to be fundamentally flawed. So the lower target means that additional capacity will be added in a far more responsible way that better reflects demand, as was the original intent of the legislation to achieve around 20 per cent, to meet the target of 20 per cent, and we believe it will still comfortably exceed that target.

It will reduce emissions in the electricity sector in a more cost effective way. The sector contributes about one-third of Australia's emissions. The lower target will still contribute to emissions abatement in the sector, but without supporting or requiring investment in renewable capacity and in electricity infrastructure that Australia simply does not need or have demand for at this time. That means we keep electricity prices down for consumers. The lower target means that Australians will not be paying for additional, unnecessary capacity.

Thereby, of course, it complements this government's actions in abolishing the carbon tax and reducing the electricity pressures felt by Australian consumers and Australian businesses, which have impacted cost-of-living pressures and the nation's overall competitiveness. But it will still support jobs in the renewable energy sector. With an achievable target that will attract more certain investment for renewable energy projects, there can be confidence around sustainable growth in the industry and therefore more jobs associated with the industry. It will continue the transition for Australia towards greater reliance upon renewable energy, with around 23½ per cent estimated to be attained by 2020—a far, far higher share for renewables than the originally intended 20 per cent target.

The bill will also help to ensure that Australian industry and business is protected where they are exposed to competition from offshore and particularly exposed to high energy prices. It will increase assistance for all emissions-intensive trade exposed activities to a 100 per cent exemption. This means that the electricity used by businesses carrying out these activities will be fully exempt from any RET liability. This will reduce the pressure faced by businesses carrying out emissions-intensive trade exposed activities, helping to ensure that they remain competitive with their global competitors and therefore protecting their businesses and jobs in those employers' industries and sectors. The impact of this change on other electricity users will be more than offset, though, by the reduction in the direct costs of the RET resulting from the lower Large-scale Renewable Energy Target.

Consistent with our election commitment, the legislation will also reinstate native forest wood waste as an eligible source of renewable energy under the RET. We will do this by basing eligibility on the same conditions that were successfully utilised and previously in place from 2001 through 2011. The use of native forest wood for the primary purpose of generating renewable electricity has never been and never will be eligible to create certificates under the scheme. Let me be very clear again: the use of native forest wood for the purpose of generating renewable electricity has never been and will never be eligible to create certificates under the scheme. Eligibility was and will continue to be the subject of several conditions, including that it must be harvested primarily for a purpose other than energy production. There is absolutely no evidence that this will lead to unsustainable logging or will have a negative impact on Australia's biodiversity. Indeed, of course, there is ample evidence to the contrary based on the operation of the scheme under these same conditions for a decade from 2001 to 2011. The use of native forest wood waste for electricity generation is more beneficial to the environment than just burning the waste alone or simply allowing it to decompose. Its inclusion as an eligible energy source will be another contribution towards meeting the target and will ensure that it is put to good use.

The bill will also remove the requirement for two-yearly reviews of the RET, providing the policy certainty that is crucial to attracting investment, protecting jobs and encouraging economic growth. One of our government's priorities is to protect consumers and households but also businesses from any extra costs related to the RET. It is also important for us to make sure that the new target of 33,000 gigawatt hours is achievable. For these reasons the Clean Energy Regulator will prepare an annual statement on the progress of the RET scheme towards meeting the new targets and the impact that it is having on household electricity bills.

A number of specific issues relating to the legislation were raised through the contributions of senators, particularly around matters of wood waste and the nature of the target. I am sure these will be canvassed at some length in the committee stage, so I do not intend to go through them in any further detail than I have already done at this stage. It is the government's conviction that this legislation provides the best possible way to support renewable energy in Australia without unnecessarily increasingly electricity bills for households or businesses and without increasing cost-of-living pressures for Australians and without making Australian industry and business less competitive than the rest of the world. It ensures that we will not be subsidising, and, more importantly, that consumers and businesses will not be subsidising, unnecessary electricity capacity and simply forcing that extra capacity into an already oversupplied electricity market.

It implements necessary reform, it makes sure that the RET scheme is once more effective, market-friendly, economically responsible and beneficial not only for the environment but for consumers as well. Perhaps most importantly, it ensures that we retain the commitment to a 20 per cent renewable energy target, that that commitment will be delivered and exceeded and that the original intent of the legislation is met. These amendments simply ensure that it is met in a more responsible way that takes account of and better reflects the changing circumstances that we have seen over recent years and the flaws in the modelling that occurred at the time of the initial legislation passing.

I commend the legislation to the Senate and look forward to the continued constructive contribution of senators during the committee stage.

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

The question is that the bill be now read a second time.