Processing

Processors hit hard in carbon tax slug

Jon Condon, 07/05/2012

 

Beef processing and related industries will be hard-hit under the Federal Government’s direct carbon tax scheme, based on a list of 250 largest emitters released on Saturday.

As foreshadowed earlier, large red meat processors will be subjected to the Federal Government’s controversial carbon tax when it is introduced on July 1. It is anticipated that much of the additional cost accrued by larger processors will be passed back to livestock producers, in the form of lower cattle prices.

Larger tax-exposed processing companies have also argued that the situation creates an unfair two-tiered market – effectively a tax on efficiency – where they will be at a considerable competitive disadvantage against smaller operators that are not subject to the impost.

The Clean Energy Regulator on Saturday published an initial list of 248 ‘liable entities’ that will face the $23 per tonne tax.

It says these companies and facilities will account for 95 percent of emissions covered by the carbon price mechanism. The list will continue to be updated.

As expected, most of the major emitters are power generators, mining companies and heavy industry firms, although the list includes some surprises such as large regional councils.

The beef industry stakeholders include:

  • JBA Australia (multiple sites, believed to include Dinmore, Rockhampton, Townsville)
  • Kilcoy Pastoral Co
  • Simplot Australia (further processing)
  • Teys Australia (multiple sites, believed to include Beenleigh, Lakes Creek)
  • Yolarno Pty Ltd (Bindaree Beef, Inverell)
  • A.J. Bush & Sons (rendering). 

The list was based on National Greenhouse Energy Reporting System (NGERS) returns on the previous year. On this basis, the red meat processing sector estimated there would be more processors included, such as the Northern Cooperative Meat Company at Casino, which is a surprise omission.

The reports to date suggest that another 80 companies are being contacted, leaving the industry to suspect that additional names like Casino will appear over the next couple of weeks.They are likely to face the new tax in the 2012-2013 financial year.

The government earlier estimated that about 500 companies would pay the carbon tax.

"We think it will come in under 500 but it is a matter for the regulator to determine," climate change minister Greg Combet said.

The resource-heavy states including NSW and Queensland are home to 145 of the top emitters on the list. NSW has 81 entities and Queensland 64, while WA accounts for another 45. Victoria was also strongly represented, with 39 entities likely to be liable under the carbon price. Other states had fewer than 10 each.

One of the surprises on the emitters list is the number of local councils included. Eight local councils, mostly in regional and rural areas, will be subject to the tax.

They include Brisbane City Council, the City of Armadale, the City of Kalgoorlie-Boulder, Council of the City of Shellharbour, Gladstone Regional Council, Maranoa Regional Council, Wagga Wagga City Council and Western Downs Regional Council.

“Apparently we are going to cool the planet from our rates notice,” said Nationals Senator Barnaby Joyce in a statement issued yesterday. “This tax is absurd. It will do nothing to change the temperature of the globe but will put up the cost of everything.”

“This is a tax that is aimed squarely at regional Australia because that is where the majority of Australia’s mining, manufacturing and power generation occurs,” Sen Joyce said.

“We should be supporting these sectors and supporting jobs in regional Australia not whacking another tax on them.”

Late last week, Independent MP Rob Oakeshott threatened to block a key element of the government's carbon scheme. Mr Oakeshott was a member of the multi-party committee that developed the scheme but says he wants the floor price on carbon scrapped because it will harm business.

He has suggested he vote against regulations to introduce a floor price because he wanted businesses to have the flexibility to buy cheaper carbon permits overseas when the emissions trading scheme is introduced.

The carbon tax is due to be implemented on July 1. It will operate at a fixed price for three years before moving to an emissions trading scheme in 2015. Even then, there will be a floor price – to limit how low it can go – until 2018.

Prime Minister Julia Gillard says the floor price is a question for the future.

 

 

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