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YOUR TAXES AT WORK: SUBSIDISING FOSSIL FUEL COMPANIES PDF Print E-mail

Federal Grants

Carbon Pollution Reduction Scheme CPRS

The Rudd Government is proposing to gift $7.4 billion in compensation to polluting industries in the form of free trading permits in the first two years alone, with built in measures to continue this compensation long into the future. While some of this compensation is going to trade exposed industries that will face competition from imported products without a carbon price attached, $3.9 billion will go directly to coal-fired power stations over the next five years against the advice of Professor Ross Garnaut.

Following the release of the White Paper, Professor Ross Garnaut strongly criticised compensation to coal-fired power stations saying: “Never in the history of Australian public finance has so much been given without public policy purpose, by so many to so few”*. Compensating coal-fired power stations has been likened to introducing a tax on tobacco and then exempting cigarette smokers.

Source: Environment Victoria 'Off Target' the fundamental flaws in the Rudd Government's Scheme. May 2009
* http://www.theage.com.au/national/australia-counts-itself-out-20081219-72ei.html

There is large risk to the public finances in the five-year price cap for emissions permits. The cap is to be set at an Australian dollar price that is likely to be exceeded by international prices at some point in the first five years of the scheme. When that point is reached, the Australian taxpayer will have to fund the purchase of permits from other countries at international prices, and to underwrite the difference between the cap and international prices. At that point, there will be powerful commercial incentives for market participants to buy at capped prices and to hoard standard permits for future use or sale. This increases the fiscal risk.

(after the free permits are allocated) Little is left for incentives for research, development and commercialisation of low-emissions technologies, which are essential components of the domestic and international mitigation efforts. Nothing is left for systematic support for overcoming information and contractual market failures inhibiting energy-saving in low-income households.

Source: Ross Garnout http://www.theage.com.au/national/australia-counts-itself-out-20081219-72ei.html?page=-1

Low Emission Technology Development Fund

The Australian governments Low Emission Technology Development Fund (LETDF) handed out hundreds of millions of taxpayer dollars, in four out of five cases to some of Australia's worst greenhouse polluters, many of which aren't even Australian companies.

  • Chevron / Exxon Mobil, Gorgon gas project, $60 million, Western Australia
  • CS Energy, coal power station, $50 million, Queensland
  • HRL Limited, brown coal, $100 million Federal, $50 million Victorian
  • Hazelwood power station , brown coal $50 million Federal, $30 million Victorian
  • Solar Systems Generation, solar concentrated PV, $75 million federal, $50 million Victorian

It is important to note that all but the last of these are not clean technologies, just "low emission" technologies, which includes nuclear power, gas and the so-called "clean coal" technologies. Source: www.ret.gov.au LETDF List of Successful Applicants

 

Low Emissions Technology and Abatement Programme

$26.9 million over 4 years towards Stationary Energy (power stations).
Supporting strategic abatement; renewables; fossil fuels; and geosequestration.

More programs

Was at http://www.climatechange.gov.au/international/publications/pubs/4ncappendixes.pdf

Greenhouse Gas Abatement Program (GGAP)

Mining and Processing

 

 

 

 

  • Energy Efficient Drying of Alumina - $11 million
  • Converting Waste Coal Mine Gas to Generate Electricity - Project 1 - $13 million
  • Converting Waste Coal Mine Gas to Generate Electricity - Project 2 - $9 million
  • Recovering Thermal Energy from Combustion of Waste Coal Mine Gas - $6 million
  • Using Waste Coal Mine Gas to Generate Electricity - $15.47 million

Coal Power Generation

  • Equipment Upgrade for Power Station Efficiency -$5 million coal power generator
  • Mechanical Thermal Expression (MTE) for Power Station Efficiency - $2.2 million Federal with Victoria matching that.
    Loy Yang brown coal power station. Total project cost $5.6 million or nearly 80% funded by your taxes.

Source: http://www.environment.gov.au/settlements/industry/ggap/

Victorian Grants

Under the 2008 Victorian budget government grants include:

  • $110 million to support large-scale, pre-commercial demonstration of carbon capture and storage technologies;
  • $72 million to support large-scale, pre-commercial demonstration of sustainable energy technologies;
  • $12.2 million to establish Clean Coal Is Victoria in the Latrobe Valley.

That's $194.2 million in just three items of the 2008 budget. The 2005 budget committed which supplements existing initiatives that include:

  • $50 million to HRL for a large-scale precommercial demonstration coal fired power plant in the Latrobe Valley. (EITS) In addition to $100 million from the Commonwealth government.
  • $30 million to support International Power in demonstrating and applying coal drying and combustion technologies. (EITS) In addition to $50 million from the Commonwealth government.
  • $12 million to support brown coal Research and Development (R&D) projects.
  • $6 million to the Otway Basin CO2 storage trial.
  • $2.2 million for precommercial plant demonstrating coal drying technology using MTE (EITS)

Source: EITS http://new.dpi.vic.gov.au/about-us/dpi-publications/2008-09-victorian-state-budget/2008---09-state-budget

Provided $50 million for a new 400-megawatt clean coal power plant to demonstrate HRL’s coal drying and gasification technology, and $30 million to refit one of the power generation emitters at Hazelwood power station.
Source: Hansard, Legislative Assembly, 2nd May 2007 page 1259

The 'clean coal' mentioned here is in connection to the brown coal in the LaTrobe Valley, coal that has a very low energy density. Energy is needed to firstly dry the brown coal, which comes out of the ground about 66% water, then to extract some of the pollutants in the exhaust using static electricity and finally to 'clean' the carbon dioxide from the exhaust, compress it to a liquid, transport it to a site for storage and then store it. Following storage the site will need to be monitored forever. A lot of energy is being asked of this brown coal and likley be more energy than is embodied in the coal to begin with making the exercise uneconomical.

$150 million to HRL for another brown coal power station in the LaTrobe Valley
Article by Envionment Victoria at http://www.environmentvictoria.org.au/media/coal-power-station-rebrand-last-gasp-polluting-project

Queensland Grants

The Queensland Government has committed $350 million dollars to 'Clean Coal Technology'
Source: http://www.aph.gov.au/house/committee/scin/geosequestration/subs/sub46.pdf

“These projects and many others demonstrate the vital Queensland coal industry can and will be a clean and green industry,”
The Honourable John Mickel, Tuesday, February 20, 2007
Queensland Minister for State Development, Employment and Industrial Relations
Source: http://statements.cabinet.qld.gov.au/MMS/StatementDisplaySingle.aspx?id=50447

Greenpeace reports and submissions

Energy and Transport Subsidies in Australia . Chris Riedy. Greenpeace. 2007.

Public Subsidies and Incentives to Fossil Fuel Production and Consumption in Australia (PDF). Chris Riedy, Institute for Sustainable Futures. 2001

Subsidies that Encourage Fossil Fuel Use in Australia (PDF). Chris Riedy. Institute for Sustainable Futures. 2003