The BCA welcomes the extensive consultations undertaken by government in refining the proposals in its green paper to address the impact of the Carbon Pollution Reduction Scheme (CPRS) on emissions-intensive, trade-exposed (EITE) industries in the absence of a global response. 

The BCA will be examining the white paper in detail but our initial review indicates that the federal government has taken into consideration many of our concerns, balanced them against competing demands and has substantially improved the mechanism for providing assistance to EITEs including:

• lowering the emissions threshold;
• covering EITE industry growth;  
• giving industry the choice to use value add in estimating their emissions threshold;
• reducing the decay rate; and,
• introducing a price cap which will provide a safety valve.

Some individual companies still have specific concerns unique to their business or sector. Both the BCA and individual companies will continue to work with government to address these issues.

For EITE industries overall the combination of having to purchase 40% and 10% of their permits, the annual reduction in permits allocated and the increased price of carbon will still result in additional costs that they are unlikely to be able to pass onto their customers in the absence of key competitors facing a comparable carbon price. These additional costs will adversely impact their business operations, in some cases reducing competitiveness and returns. The encouragement and availability of new technologies to reduce emissions in these industries will be critical in assisting them to counter these adverse impacts.

The finalisation and passage of legislation for the CPRS which ensures Australia’s ongoing competiveness and economic prosperity, while contributing to global emissions reduction, is the next critical step. The BCA looks forward to working further with government to achieve these goals and deliver business certainty.