31 March 2015

RET impasse hurts manufacturers

The political intransigence that has dogged the renewable energy target debate (RET) is very disturbing and is having a real impact on competitiveness, costs and confidence.

in Australia’s trade exposed industries. The impact is felt much wider than in the renewable energy industries that seek clarity on their future level of subsidy under the RET.

If a deal on the RET is not done shortly, Australia’s large manufacturers will be hit with very high unintended costs. For trade exposed manufacturing industries that are unable to pass on those costs, that is a direct threat to their international competitiveness and viability.

Manufacturing Australia supports a Renewable Energy Target in the low-to-mid thirty thousand GWh, subject to an exemption for Emissions Intensive and Trade Exposed (EITE) industries, which both major parties support.

The gap between the Government’s proposed target and the renewable energy industry’s proposal is now just 1500 gigawatt hours.

If negotiations really do stall so close to the finish line it would be an indictment on both major parties and a reminder that the interests of the broader economy and competitiveness of Australian industry are playing second fiddle in this debate.

Frankly, for the companies that pay for the RET, the difference between a 32,000 gigawatt hour target and a 33,500 gigawatt hour target is insignificant compared with the continued uncertainty and likelihood of much higher costs if a deal is not done.

Mark Chellew