"In a messy world, Australian climate policies need smart design if they are to durably cut emissions while sustaining our competitiveness and strengthening international cooperation on trade. The final recommendations of the Government's Carbon Leakage Review, out today, offer a promising template. And developments since the Review began in 2023 only strengthen the case," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"Industries like cement, steel and ammonia are literally foundational for the real economy. That will be just as true in a net zero emissions world. Getting there will require major investment. Public finance has its place, but is neither infinite nor eternal; most of the money to build net zero emissions industries must ultimately come from industry itself.
"Private investment in sustaining and cleaning up key industries simply will not flow without a level playing field on carbon constraints. Our producers should stand or fall on their merits, not based on gaps between Australian and overseas emissions policies.
"The Review recommends careful development of a border carbon adjustment system for those industries where carbon policy gaps make the biggest difference, and where an honest adjustment is actually practical. Importantly, the outcome reflects the clear message from Australian Industry Group and others that a border adjustment for carbon can and must fulfil our trade commitments, not undermine them.
"The rules-based trading order and strong relationships with trade partners are key sources of Australian prosperity. They need to be honoured and cultivated, even as they evolve to meet today's serious challenges and the needs of tomorrow.
"The border adjustment proposal now goes into the mix of the major decisions being taken on the Safeguard Mechanism over the coming year. The Safeguard is one of the biggest planks in Australia's climate policy, and a crucial factor in industry investment decisions. Today it is working well. To keep it that way will require a durable solution to the level playing field issue. There is now just such a solution on the table," Mr Willox said.
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