The future of Australia’s largest emitters looks uncertain under the new Labor government, with Greens and independents focused on climate change ready to speak out.
Companies, from airlines to mines, say they are already one step ahead in reducing carbon, but many of their targets are below what will be implemented under Labor.
The question now is: how far can the industry go, especially if the Greens end up with a balance of power?
Labor ran in the election with a commitment to reduce greenhouse gas emissions by 43% in just eight years.
Many airlines already have their own targets for 2030, including the large airline Qantas.
The ASX-listed company’s goal is a 25% reduction in net emissions by 2030, which is below Labor’s commitment and even below the 75% target the Greens will push for.
“We need to make sure that we go at a pace that allows us to keep this important part of travel and keep that investment in the country,” Qantas CEO Alan Joyce said in response to questions from ABC News.
“Not all industries can decarbonize at the same time, in the same period of time. This is recognized.
Alan Joyce says not all industries can decarbonize at the same rate. (AAP: Bianca De Marchi)
Qantas competitor Virgin has a lower target for 2030: a 15% net reduction in carbon emissions.
Virgin CEO Jayne Hrdlicka has yet to commit to higher targets, but said the airline will work with the new government.
“We expect ambitious climate change targets,” Ms Hrdlicka told ABC News.
Jayne Hrdlicka wants to work with Labor on higher emission reduction targets. (ABC News: Christopher Gillette)
Ms Hrdlicka says more investment in sustainable fuel industries in Australia can help companies achieve higher goals.
“We look forward to conversations with them [the Labor government] on sustainable aviation fuels and the opportunity to make a very profound difference in terms of the environment, and we hope that these talks will really start next week, “he said.
Coal and gas projects were already risky before Labor
Outside of air travel, Labor’s victory has major ramifications for the gas and coal industry.
That industry was already struggling with its future viability.
Sustainable energy such as solar energy has already gained prominence and carbon-intensive energy is becoming less and less profitable.
Just a few months ago, Origin Energy applied for approval to shut down Australia’s largest coal-fired power plant seven years earlier.
Rio Tinto has been selling its coal mines and is unlikely to approve new ones, while BHP has also pledged to go out and has a 30 per cent carbon reduction target by 2030.
The big four banks have publicly pledged to stop financing coal in 2030 or 2035, although critics argue that they still invest every billion in fossil fuels such as gas.
Australia’s largest iron ore exporter, Rio Tinto, set new carbon targets before COP26. (ABC News: Rachel Pupazzoni)
Labor also wants to impose emission limits on the 215 most polluting installations.
Details are yet to be determined, but it could involve changing the current “safeguard mechanism” introduced by the Abbott government in 2016.
This mechanism covers Australia’s major carbon pollutants, which emit more than 100,000 tonnes of covered carbon dioxide equivalent (CO2-e) emissions in one financial year.
It affects companies in a wide range of industries, such as electricity generation, mining, oil and gas extraction, manufacturing, transportation and waste.
Under the mechanism, these companies must ensure that the net emissions of the installation do not exceed the baseline determined by the Clean Energy Regulator. There have been suggestions that workers may increase this baseline.
The industry group says companies “could stumble” if targets were rushed
A pressure group representing manufacturers is urging the new government to set viable deadlines.
Ai Group’s head of climate, energy and environmental policy, Tennant Reed, says most companies are committed to zero net emissions by 2050 or sooner.
Tennant Reed says most companies are committed to zero net emissions by 2050 or much earlier. (Sean Warran, ABC News.)
“We could stumble upon our own feet as we try to move forward,” he said.
“If we impose such high costs on local businesses that are unequal compared to those faced by their competitors who lose market share or lose profitability, we will have some problems.”
He says the safeguard mechanism for the industry is a more effective way to meet climate commitments without ruining companies.
“I don’t think anyone is arguing that we can reach 100 percent reductions overnight,” he said.
Emma Herd, EY’s director of climate change and sustainability, says the composition of the new parliament will mark the beginning of a new debate on climate goals for 2035.
“It’s fair to say that companies are ahead of where the government has been in Australia for the last 10 years or so,” Ms Herd said.
“Until now, you really had the industry taking a lot of action voluntarily to reduce its emissions.
Emma Herd says corporate Australia is ready for a “debate” on what the goals of climate change should be. (ABC News: Daniel Irvine)
“The overhaul and tightening of the safeguard mechanism will drive this compliance engine and really start pushing the industry to reduce its emissions at a much faster rate.”
She says there is no doubt that the debate will now focus on how companies increase their goals.
“The question is also a lot about who pays and where are the opportunities for Australia as well.”
How the Greens could push Labor to set more ambitious climate targets
How far the new government in carbon reduction will go will depend on the strong voice of the green and climate-focused independents in the new parliament.
Labor could only get a majority government in the lower house.
However, things seem more uncertain in the Senate, where Labor is not expected to have a majority.
If Labor does not have the support of the Coalition, the support of the Greens will be mandatory for any legislation it wants to pass in the Senate. Tasmanian Sen. Jacqui Lambie will find that she also has a bigger voice.
If the Greens maintain the balance of power in the Senate, it will give them room for maneuver to negotiate stronger emission reduction targets and push Labor to phase out some 114 coal and gas projects that are currently underway.
“The Greens will have a balance of power in the Senate, potentially in their own right, and the government cannot take our votes for granted,” Greens leader Adam Bandt told the ABC.
Adam Bandt wants stronger emissions reduction targets and says the Greens will push Labor on this issue. (AAP: Russell Freeman)
“This election gave us a mandate to act on the climate. The Greens want to sit down with the government and come up with a plan to pass climate legislation, but that should include freezing new coal and gas projects.
“You can’t put out the fire while you pour gas on it.”
Bandt identified new gas projects, such as Scarborough in Western Australia and Beetaloo in the Northern Territory, as those against which it was retreating.
Aside from the Greens, there are now “green-green” pro-independence activists, who campaigned for climate change before the election.
Independent candidate Monique Ryan, who held Kooyong’s seat in the hands of former treasurer Josh Frydenberg, described the 43% Labor target as “manifestly inappropriate”.
The Intergovernmental Panel on Climate Change says global emissions should be halved by 2030 to have any hope of limiting global warming to, or close to, 1.5 degrees Celsius.
The work has a 43% emission reduction target for 2030, which is lower than the promised 45% cut before the last election. This goal, if replicated in other countries, is consistent with 2C of global warming.
The Greens’ most ambitious target for 75% of 2030 and a net zero for 2035 is consistent with keeping warming at 1.5 degrees Celsius.
The new Labor government has been contacted to comment on how far it will go in its goals and when it plans to start implementing them.
Climate-friendly policies to help the renewable energy sector
While some companies may be nervous about continuing to push their emissions reduction targets, the renewable energy industry is excited.
He believes Labor’s victory will speed up the transition to battery storage.
“If they become more ambitious, we’d be delighted,” says Brian Craighead, founder of Energy Renaissance, which makes lithium batteries for commercial and industrial use.
Craighead has welcomed Labor targets, but wants more action.
Brian Craighead wants Labor to take even stronger action against climate change. (ABC News: John Gunn)
“It’s really refreshing after seven years of struggle, people denying basic science and bringing bits of coal to parliament, seeing the country change its direction and say it’s enough.”
Craighead says business is growing due to a greater appetite for renewables, with some of his company’s big clients working in agriculture, defense and transportation.
“Demand is on the rise. We are seeing more and more people, big companies asking for batteries as fast as they can. This election will only speed it up.”
Natural Solar CEO Chris Williams says the next decade will be exciting for the renewable energy space.
“The future of renewable energy, especially in Australia, as a result of this election result is very promising,” he said.
Chris Williams owns a battery installation company that has seen an increase in sales since the climate-focused election. (ABC News: John Gunn)
The company installs domestic batteries to store solar energy. Currently, 3 million households in Australia have solar energy, but far fewer have batteries to store energy and use it at any time.
Mr. Williams …