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Clancy Yeates
June 11, 2009

THE Parliamentary Secretary for Climate Change, Greg Combet, has warned coal producers that time is running out for haggling over the carbon pollution reduction scheme, and they could receive less government support if a stalemate in negotiations continues.

Mr Combet, who is trying to get coal producers on side with the Government, yesterday said coal was unlikely to qualify for support as a trade-exposed industry.

And in a veiled threat, he said failure to reach an agreement could leave the Government no option but to negotiate with the Greens, who favour even less assistance for the sector.

“It is time … for the coal industry to very carefully think about where things are up to and the fact that time is starting to get very tight now,” he told a business audience in Sydney.

The Senate will vote on the proposed scheme later this month, and Mr Combet said the Government was fully intent on passing the bill.

“When the Government is determined to prosecute legislation through the Senate it has to get support from somewhere. Now Senator Wong, my minister … is having discussions with the Greens, and the Greens are opposed to any assistance of this form for the coal industry, and they are certainly opposed to any more assistance.”

The Government has offered coal producers $750 million over five years but the industry has demanded up to $10 billion.

The sector – the country’s biggest export earner, worth $54.5 billion last year – says it should qualify for compensation as an emissions-intensive trade-exposed industry.

Global heavyweights such as Xstrata and Anglo Coal have warned that under the scheme many mines will be closed because their foreign competitors will not face a carbon price.

But Mr Combet, whose electorate is the coal heartland of the Hunter Valley, said the impact of the scheme varied according to methane emissions of each mine. The liability of emissions could range from 80c a tonne of coal produced to $20 a tonne, and Mr Combet said support should favour the most severely affected producers.

More broadly, he argued that progress on a US emissions scheme highlighted the need for local business to get behind the Government’s proposal.

He said US business would face greater uncertainty under the proposed scheme than companies in Australia, and assistance in the US would be concentrated on a narrower range of industries.

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