Safeguards mechanism – assurances needed

The nation’s largest business network, the Australian Chamber of Commerce and Industry, has called on the government to assure the business community that energy affordability and supply have not been compromised in the emissions safeguards mechanism deal with the Greens.

“The fundamental test for the safeguard mechanism is whether it supplies secure and affordable energy for households and business,” ACCI chief executive Andrew McKellar said.

“AEMO already expects a shortfall which will only worsen if new gas production doesn’t progress.  We need a planned transition that keeps energy affordable for businesses and households, and that means building the new renewable system before we switch off aging coal-fired power generation.

“Reliable and affordable energy requires long term planning that sends clear investment signals. Australian gas remains a crucial firming fuel and at a time when the world needs it most.

“Consumers and businesses are suffering from high energy prices and inflation, so we call on government to remain vigilant and ensure gas production is not inhibited at a time when Australia faces a domestic supply shortage.

“The fact of the matter is that gas will be essential to our energy system in the years ahead. But there is a risk that energy supply will be choked off before alternative sources are available, threatening reliability and driving up electricity prices.

“Lowering energy costs and meeting our emissions targets necessitates collaboration between government and industry. While we welcome the certainty that an agreement will bring, business remains concerned about access to affordable and reliable energy supply.

“The Chamber has been supportive of reforms to the safeguard mechanism thus far given it would provide greater certainty for business, whilst providing improved access to affordable, reliable, and clean energy.

“Industry will seek assurances from government that these changes ensure a workable safeguard mechanism to facilitate real emissions reductions, particularly for trade-exposed cement, steel, and aluminium producers, without stifling their competitiveness.”