Hunter Aluminium Producers To Receive 94.5% Free Carbon Permits

From the Newcastle Herald, 16 July 2011 (emphasis added):

Key industries in the Hunter say they face uncertainty under the government’s carbon tax, despite the significant financial support to be provided to some.

The Hunter’s mining and aluminium industries, both major employers, say the tax will reduce their competitiveness internationally.

The Hunter provides one-third of Australia’s aluminium and production is expected to double in the next 10 years, but the industry says the tax will force a lot of it overseas.

The industry would receive free carbon permits covering 94.5 per cent of average costs under the government’s proposal.

The coalmining industry is still warning of job losses in regions such as the Hunter despite the government’s $1.3 billion support.

Regular readers will know that I have already pointed out the gaping holes … lies … in the Government’s scheme scam.

The handing out of “freely allocated” carbon permits to “trade-exposed” industries in particular is a classic example of why I have been right all along in insisting that this scam is not “a tax” … or “like a tax” … but is a sneakily disguised emissions trading scheme from Day 1.

Why?

Because while “purchased” carbon permits are not tradable in the initial 3 year “fixed price period” … “freely allocated” permits are –

Scheme architecture

Table 1: Starting price and fixed price period

Permits freely allocated may be either surrendered or traded until the true-up date for the compliance year in which they were issued. They cannot be banked for use in a future compliance year.

Lucky “polluters” like the aluminium producers will receive – it now appears – millions of free permits.

Just like in the massively rorted European scheme.

Which they can either “surrender” back again to “pay” for their “excess” emissions.

Or, trade their free permits (for profit).

Or, sell their free permits back to the Government … who will use your money to buy those free permits back again:

Buy‑back of freely allocated permits

The holders of freely allocated permits will be able to sell them to the Government from 1 September of the compliance year in which they were issued until 1 February of the following compliance year.

The latest NGER Report on “biggest polluters” emissions shows that just one of the Hunter’s alumium producers – Hydro Aluminium Kurri Kurri – emitted 366,598 tonnes of Scope 1 emissions, and 2.509 million tonnes of Scope 2 emissions in the most recent voluntary reporting period (2009-10).

So, with a carbon dioxide price set at $23 per tonne, and the Government planning to give Hydro Aluminium free carbon permits covering 94.5% of their emissions … well, you can do the math.

Sounds like an awful lot of free carbon dioxide “money” to me.

Tags: carbon permits, carbon tax, ets, freely allocated, Hunter, hydro aluminium, subsidy