The Federal Department of Climate Change today released a guidance paper on what activities qualify for emissions-intensive trade-exposed (EITE) assistance under the proposed Carbon Pollution Reduction Scheme. Climate Change Minister Penny Wong called it the “next step in implementing the decisions made in the government’s white paper”, while also defending the move to call a Parliamentary inquiry into the CPRS.
“The assessment timeframe outlined in the paper will ensure that certainty is provided to as many eligible EITE activities as possible by mid-year in draft regulations,” Wong said. “This will give businesses the certainty they need to invest for the long-term, supporting jobs in key industries as we move to a low pollution economy.”
Over $9 billion has been set aside to assist “a range of businesses and industries under the scheme out to 2012”.
The guidance paper contains details of the process the government will use to determine the eligibility of EITE activities and information that industry sectors must provide, such as emissions and financial data.
“The assessment process outlined in this paper will inform the Government’s decision on which activities in the economy are eligible to receive EITE assistance, the rates of assistance and the basis for allocations for eligible activities,” the paper says.
A total of 33 production processes – such as alumina refining, iron and steel manufacturing, lead and zinc refining or smelting – are listed as eligible for EITE assistance without requiring any preliminary assessment, “and will progress straight to the formal assessment stage”.
“Entities conducting production processes that are not listed … who wish to have activities they conduct considered for EITE assistance will need to undertake a preliminary assessment.” Businesses seeking information can email the department with inquiries, Wong said.
The assessment of an activity’s emissions intensity will generally be based on the weighted average emissions per million dollars of revenue. However, entities may request the eligibility assessment for an activity is made on the basis of the weighted average emissions per million dollars of value added.
The guidelines come a week after Treasurer Wayne Swan initiated a Parliamentary inquiry into “the choice of emissions trading as the central policy to reduce Australia's carbon pollution”.
In a speech on Friday, Wong dismissed skepticism about the inquiry by saying that it was consistent with the government’s recognition of the “divergence of views with respect to emissions trading”. She was confident the inquiry would “again confirm that cap and trade is the best approach and that alternative policies are simply not up to the task of reducing carbon pollution at the lowest economic cost”.
It has not silenced the speculation, which ranges from the government seeking a way to defer the scheme until after the next election or the economic picture brightens, to a measure designed to help get the CPRS legislation through the Senate.