Submission: Levelling the playing field to support industry decarbonisation
3 December 2024
The Investor Group on Climate Change (IGCC) welcomes the opportunity to provide a submission on the findings of the Carbon Leakage Review, which assesses Australia’s carbon and investment leakage risks and presents different policy options to address them – including a Border Carbon Adjustment (BoCA).
While the Safeguard Mechanism continues to drive deeper emissions reductions, there will be a ‘green’ premium for some transformational technologies for some time. Ensuring that Australian industry has strong incentives to decarbonise on a level playing field with other jurisdictions is in the national interest.
IGCC emphasises the need for the Australian Government to engage the region on the development of a BoCA trade bloc, working to decarbonise all emissions-intensive supply chains. The Review poses several lines of inquiry for the government to explore further with investors, industry and communities – in Australia and within the region.
IGCC would like further clarification on:
- A realistic timeline for the implementation of a BoCA and when it will be ready for more detailed design engagement with business and investors,
- when ammonia and derivatives, steel and glass will be considered for a BoCA,
- how the Safeguard Review (in 2026-2027) will consider aluminium, refined petroleum and pulp and paper as commodities under a BoCA, and;
- clear timeframes for when a BoCA may be phased in for each commodity, including how this phasing will interact with the potential removal of Trade Exposed Baseline-Adjusted (TEBA) facilities.
Some IGCC members have raised questions around the use of Australian Carbon Credit Units to pay liabilities under a future BoCA, and it is suggested that an impact analysis be undertaken on this design feature.
IGCC emphasises the importance of direct support through policies such as a Future Made in Australia or the Powering the Regions Fund in supporting export-facing industries to decarbonise – a BoCA is but one element of the policy suite to improve markets of supply and demand for green products domestically and internationally.
Read the full submission.