Second Reading – Safeguard Mechanism (Crediting) Amendment Bill 2022
Mr PITT: I really have to answer a couple of those points very briefly. The Nationals held all 15 of their seats and gained a senator, and in Queensland the Labor Party did nothing but lose seats and go backwards. So for those opposite to pretend that this is some great mandate is absolutely false. The people who drive our economy in the regions, in Queensland in particular, did not agree with the proposition.
We come to the Safeguard Mechanism (Crediting) Amendment Bill 2022. The bill intends to have 215 businesses that are impacted by the safeguard mechanism reduce their emissions over a period of 10 years. That includes 66 coalmines, 36 gas facilities, 26 iron ore mines and 49 manufacturing facilities, two of which are the last two remaining oil refineries in this country, which are already in trouble because Labor broke their promise on fuel and emissions standards in this country and they now cannot meet those standards in the future. I went to the Parliamentary Library and said, ‘Okay, the federal Labor Party is going to do this to the people that we represent, particularly in the regions, particularly manufacturing, particularly resources, that drive literally hundreds of billions of dollars worth of our economy. How is it going to work?’ I said to the library, ‘Give me a rule of thumb. Tell me what might happen in terms of offsets and available protocols and all of these other things.’ This legislation proposes a $75 carbon tax, three times the Rudd-Gillard level, and a penalty of $275 for those organisations in the list.
Can you imagine what it would be like to be 49 manufacturing facilities who have legacy equipment which they either have to completely replace, or they find the alternative to offset? If we look at the options to offset, unfortunately the Parliamentary Library told me they couldn’t find a data source, but my colleague and friend the Member for Flynn found one: the CSIRO’s Australia’s carbon sequestration potential: a stocktake and analysis ofsequestration technologies, November 2022. This is based on existing protocols, existing practices, methodologies, costs, and it is actually quite an interesting and detailed report. If we look at the potential for that—this is from the library itself—it tells us that Australia’s total land mass is around 768 million hectares. Of that, the agricultural area is 426 million hectares and urban intensive areas are about 3.5. On top of all the other commitments that the federal Labor government has made, they have also made one, under the High Ambition Coalition for Nature and People, to protect 30 per cent of the world’s land areas and seas to halt the loss of species et cetera. To do that from where Australia is currently positioned is going to take, I’m told, another 60 million hectares. So we have 60 million hectares to go to the proposal, and then somehow these organisations have to find offsets or equivalents to meet what you are legislating in this place. Or they have some other options—I’ll get to that soon.
If we look at these options, as per the CSIRO report, we have, Labor is saying, a 43 per cent reduction of CO2 by 2030 that is legislated. There are various reports about how much that might be, but it’s north of 200 million tons of CO2. As I said, 426 million hectares of ag land. This report runs through these types of protocols that currently exist. Nearly all of these that I’m about to speak about have to go into cleared or nearly cleared agricultural land. Permanent plantings of not-for-harvest woody vegetation, previously cleared ag land, two eligible methodologies. The CSIRO report talks about potential and technical outcomes, potential being as much as they think they can possibly get from this protocol and methodology; technical is what they think is realistic. 480 million tons of CO2 reduction under this methodology would require 63 million hectares of agricultural land. They say that that’s probably not reasonable, and I would probably agree with that. The technical outcome will be 16 million tons of CO2 from three million hectares of land. These are all numbers that sound interesting. What is three million hectares? The entire Australian sugar industry is farmed from just over 350,000 hectares, just to get people who are listening some idea of the scope.
Commercial plantations, farm forestry, technically 42 million tons of CO2, but that would require five per cent of existing land. Human induced regeneration of native forest, including reduction in the rates of domestic livestock grazing, 60 million tons of CO2 or 32 million hectares. You can avoid land clearing—that will give you nine million tons of CO2 off 1.38 million hectares. Savannah management, which I acknowledge is not ag land, potentially six million tons off 80 million hectares. Soil carbon potentially technically 115 million tons of CO2, but they’re unsure exactly how much that will require, because it is complex in the way it actually evolves and works and is paid and subsidised.
There are a range of others, whether that is blue carbon—mangroves, tidal marshes, coastal wetlands, seagrass—there’s a whole heap of all sorts of epiphanies and unicorns down in the garden. But the big one is geological storage, carbon capture and storage in existing geology. The reason that I say that is because the technical potential by 2050 is 227 gigatonnes of CO2. That is an enormous amount of CO2.
The report also talks about just how strong this storage is, that it won’t leak. It’s proven by millions of years of experience in exhausted gas basins, for example. So, if you store in depleted hydrocarbon fields, you can store CO2 for millions of years. And this is what has happened; this where we have accumulated gas and everything else that we utilise. The member for Flynn has been a strong advocate for this, not into the Great Artesian Basin. You cannot put waste into the GAB, but there are proposals out there that I and others are aware of to inject liquid CO2 into the Great Artesian Basin’s aquifers. I’m 100 per cent opposed. It will make them unpotable. The proposal of injecting liquid CO2 into the greatest water source in this country should be prohibited but currently is not.
There are a number of others, whether it’s direct air capture or a whole pile of other fantasies that may or may not work, but the CSIRO has summarised the available methodologies, roughly what the cost is and how much land or other mechanisms are needed. If we add these up: permanent planning, three million hectares; farmed forestry, 21 million hectares; human induced regeneration, 32 million hectares; land clearing, one million hectares; savanna management et cetera. You only get to 133 million tonnes of CO2. You are roughly 100 million tonnes short—that is, if they utilise all of these. Can you imagine taking that much land out of production in Australia? That is the only proposal and it’s on cleared or partially cleared agricultural land used for food production.
We have seen the ag sector go from strength to strength—in fact, the forecast is it puts some $90 billion into the economy. They are not only feeding Australia; they are feeding the world. But the safeguard mechanism that Labor is putting forward is saying to these organisations, ‘You will pay a penalty, whether that $75 or $275, per tonne that you are over your target, year by year by year, unless you find another way.’
Some of these assets are worth billions of dollars. Why on earth would they rebuild them in the form that people on that side of this building, the government side, want at an enormous cost with no real outcome? The alternative is they can take up some of these potentials. Is that the proposition? Is that what’s being proposed by those opposite, that literally tens of millions of hectares of Australian ag land gets taken up for offsets to meet your targets under the safeguard mechanism in a country that contributes just one per cent of the world’s emissions? And that has dropped by some 20 per cent recently.
This is the definition of insanity. We have to feed ourselves; we have to feed the world. To do that we require good sources of water; we require good farming techniques. Australian farmers are recognised as the best in the world, but the concept that we will take all of this land into offsets—and let’s not kid ourselves. Big companies like Telstra and others can afford to do this. They will just go and buy ag land—it’s what happened under the ERF with previous governments—and they will let it go to waste. They don’t need to maintain fences. They don’t need to keep out ferals. They don’t need to employ anyone, particularly in regional Queensland, regional Australia and the far-flung areas of our country. What that means is no-one’s at school, no-one volunteers for the fire brigade, no-one’s paying rates, no-one is employed, no-one has houses. This is exactly what has happened under previous proposals.
The concept that Australia will turn into somewhere which is not managed—can you imagine the chaos if those farmers are out there getting paid to simply not farm? And yet that is the proposition being put forward by those opposite in this safeguard mechanism. These companies employ tens of thousands, hundreds of thousands of Australians. The resources sector alone is accountable for over one million Australians directly and indirectly employed. They are highly competitive in a world market providing a product that the world wants. Yet we see this mad charge to 2030 to meet targets that have been set that could impact not only Australia’s agricultural production but Australia’s water production from the GAB, Australia’s economic options, and jobs in regional Australia.
We shouldn’t kid ourselves. Every single big business I know is doing the numbers right now to determine at what point in the future do they become unviable under these proposals, then whether, at that point, they close. That will get you your CO2 reductions. There’s no doubt about that because there’ll be none. There’ll also be no jobs. There’ll be no options in the future. There’ll be no training of apprentices. There’ll be no-one contributing to the local economy. There’ll be no-one going to the hairdresser or to the bakery or going to the shopping centres because those jobs will not exist. This is the exact point we are at right now. The idea that some businesses will be able to afford to offset 200 million tonnes per year—and I’ve outlined that they’re not even going to get to that—with enormous amounts of land. If you include the savannah management, it’s 137 million hectares. It is enormous. These are huge swathes of our country. It will change the dynamic of regional Australia forever.
There has to be a better way. The better way is carbon capture and storage because it works. It works and it can do very, very large amounts of CO2 sequestration, in the right place. In fact, I know that the Barossa proposal, offshore from the Northern Territory, was looking at exactly that. Santos was looking at utilising existing lines for CO2 injection at depleted gas outputs, where the fields have been depleted and they had the option to do that. They will get paid for it, clearly. But what have we seen? We’ve seen the new Barossa project stopped by the Environmental Defenders Office through the Federal Court. We’ve seen all of those people stood down. We’ve seen a company like Santos, an Australian company—which I’m told has expended over $2.4 billion on this project already—now having it parked up and not moving forward. That was 600 jobs alone in the extension of the Darwin LNG program. This is significant for the Northern Territory. They’re trying to do the right thing, but you have to give them the option to do it in the time frame that works for them.
The 30 years to 2050 is a very, very long way away. Think about it. How many businesses can you think of that last three decades or that last five decades? There really aren’t that many because longevity in business is incredibly difficult. Yet here we see a proposal which is going to force businesses to the wall earlier than would be expected and will force them to make a decision on their viability earlier than they need to. Jobs will be lost in the regions. I’ve got the member for Flynn sitting next to me. I can tell you where most of them will be. They’ll be in Gladstone, in the member for Flynn’s electorate. They’ll be around aluminium and concrete and energy.
This is the wrong proposal. It is the wrong approach. A $275 penalty for those who can’t find a way—otherwise they’re out buying up ag land across the country to give them offsets. We know that this will not work. It is bad for the regions. It gives a terrible outcome for communities. It’s the equivalent of buying water from the Murray-Darling Basin and taking it out of the economy. Guess what? That’s what the Labor Party is doing because they are tied up in their ideological views. These are not practical outcomes. They can be done and managed in a much better way. Use the technologies that come online. Give them the time to deliver what they need to. Let them design and move forward in a way that keeps their businesses profitable, keeps their employees in place and keeps the business in town, in regional Australia, in particular. The people in the cities will know the impact because they will have to pay the price and the price will go up for just about everything.
I come back to these 215 businesses, which in my view, will be just the start. The 100,000 tonne limit can be easily changed by the minister with a single stroke of a pen. I expect to see that in the future. I oppose the bill. I oppose it strongly and will continue to do that into the future.