An adjustable emissions target has been flagged by Energy Minister Josh Frydenberg to make the controversial National Energy Guarantee (NEG) more attractive to the states.
The concessionary move is suggested in a Commonwealth paper released to states and territories. Unanimous approval is needed from states and territories to pass the Coalition’s NEG legislation.
As reported by the Guardian, Frydenberg informs energy ministers that the NEG’s emissions reduction target can be reviewed after five years. The target was previously set to be locked in for a decade.
According to the paper, the target could therefore be reviewed for an increase in 2024. This would follow assessment of demand, costs and market.
The current target aims to reduce carbon emissions by 26 per cent of 2005 levels by 2030. States and industry bodies say this is too low to be effective against climate change.
NEG’s adjustable emissions target exemptions
Because the adjustable emissions target will be set by legislation, any adjustment will require support in both federal parliamentary houses. The lower emissions target would then apply for five years with no further reduction.
Meanwhile, certain businesses will be exempt from the emissions target. These include high emissions, trade-exposed companies which are some of the highest polluters.
Frydenberg’s peace gesture could appease states and territories who have criticised the NEG. Concerns have been raised about the ten-year lock-in period as well as the weak emissions target.
The Energy Security Board (ESB) has made a further concession to energy ministers, saying they can sign up to the NEG on August 10 without having to endorse the Coalition’s emissions target.
According to the ESB, the NEG could reduce wholesale electricity prices by 20 per cent between 2020 and 2030. A report by the Australian Industry Group, however, shows renewables like solar installations are already reducing power prices for industry.
NEG will stunt renewable growth: Greenpeace report
The concession comes as a Greenpeace Australia report hits out at the NEG, claiming it will stunt renewable growth, increase energy prices and do nothing to fight climate change.
Former head of the Clean Energy Finance Corporation Oliver Yates also urges states to oppose the NEG. This is because the NEG endorses coal and fails to reduce emissions in a meaningful way, he says.
Meanwhile, industry bodies like the Clean Energy Council and the Smart Energy Council insist renewables like solar power and solar battery storage are bringing down energy prices and helping combat climate change.
