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LNG, coal miners: winners or losers in ETS?

The Australian Petroleum Production & Exploration Association (APPEA) is pleased with the Government’s decision to offer assistance to all aspects of liquefied natural gas (LNG) production under the proposed emissions trading scheme (ETS), despite an outcry from coal miners which would be slugged with $12.5 billion of extra costs next year.

Prime Minister Kevin Rudd’s proposed changes to the ETS — which might get the green-light from the Senate this week — include a doubling of assistance to $1.5 billion for the coal industry, $4 billion worth of assistance to electricity producers, and the inclusion of all aspects of LNG production as now able to gain assistance.

The ETS, also called the carbon polution reduction scheme (CPRS), changes were added to the proposed ETS to help-out the hardest-hit sectors under the scheme, which include industrial companies who produce the most emissions from their process.

According to APPEA, the package of amendments to the ETS legislation is less constraining on the ability of Australia’s LNG industry to reduce global emissions.

“It makes no sense to constrain the very industry that has the most to contribute to the world addressing climate change,” said APPEA chief executive, Belinda Robinson.

“A well-designed scheme would encourage the expansion of Australia’s LNG sector as more natural gas, producing between 50 and 70 per cent fewer greenhouse gas emissions, is substituted for coal in generating China and India’s electricity generation.”

The coal mining industry believes that the Government’s concession of $1.5 billion to the coal industry mean that this sector will pay $12.5 billion rather than $14 billion in carbon costs to 2020.

According to APPEA, the LNG industry body will continue to work with both the Government and the Opposition to ensure that the intent of the package is captured.

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