At a press conference this morning, the Government announced the
details of the deal that Labour had put on the table for the
Opposition's consideration, in relation to the CPRS
legislation. This deal is the culmination of a number of
weeks of "good faith" negotiations between Senator Penny
Wong and Senator Ian Macfarlane, following the announcement of the
request for changes on 18 October.
The deal includes:
Permanent inclusion of the global recession buffer
(GRB) for the emissions intensive trade exposed
(EITE) industries. The GRB was initially
intended to cease after 5 years of operation. This
means assistance for EITE industries who meet the lower threshold
will qualify for 66% assistance, and those meeting the higher
threshold will qualify for 94.5% assistance (see our
legal update for details of these thresholds). It is
intended that the assistance level will reduce at an annual level
Primary food processing will receive assistance equating to
$150 million over 5 years through the Climate Change Action
Agricultural emissions have been permanently excluded from the
CPRS. Originally, the Government indicated that it would make
a decision in 2013 as to whether to include agriculture, with a
view to agriculture being included from 2015. Voluntary emissions
reporting trials will commence in 2011 to allow the sector to
better understand and manage its emissions.
The Government has indicated that it is likely that the
agricultural sector will be able to generate offsets, thus being
able to create free permits like the forestry sector. Other
sectors not covered by the CPRS, for example, legacy waste and
emissions from closed landfills may also be able to create domestic
Increased assistance will be provided to the coal sector, which
equates to a total of $1.5 billion. The assistance will take
two forms: Coal Sector Adjustment Scheme, to provide transitional
assistance to the most emissions-intensive coal mines through free
permits; and Coal Sector Abatement Fund, to provide funding for
coal sector abatement projects.
Extra financial assistance of $4 billion will also be provided
to the electricity sector, making a total package of $7.3
billion. The Electricity Sector Adjustment Scheme will also
be extended from five to ten years.
The Government is also proposing to provide additional
assistance of $1.1 billion through a Transitional Electricity Cost
Assistance Program to various businesses, such as mining and oil
and gas extraction, to help them deal with increased electricity
The Government has confirmed that voluntary action by
households and business will be counted, and will create a new
mechanism to take voluntary action into account when setting
This deal is currently being considered by the Opposition party
room, and the intent is that a vote will take place on the CPRS
legislation before Parliament breaks for the Christmas recess on
Thursday. The Government has indicated that it is willing to
extend the sitting hours of Parliament, in order to provide more
time for debate on the legislation.
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This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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