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Emissions trading scheme to knock coal

COAL production and competitiveness will be hit hard under the Australian government’s emissions trading scheme, with Treasury modelling released yesterday showing the industry’s lifeline lies in clean coal technologies and carbon sequestration.

Angie Tomlinson
Emissions trading scheme to knock coal

The government said yesterday it would push ahead to meet its trading scheme deadline of 2010, and mapped its progress based on software modelling through to 2050. It ignored calls from the Opposition to postpone the scheme because of the global financial crisis.

Coal exports are expected to grow more slowly under a global emissions trading scheme as the world switches to lower-emission technologies. Under the government’s modelling, coal-fired electricity production would fall in real terms by 2050.

The government detailed the importance of carbon capture and storage technology for the Australian coal industry’s future. The Treasury’s modelling assumes the technology will come into play at 2026 at the earliest.

The report said if these technologies did not prove commercially viable, Australia’s coal production could fall from current levels.

The modelling also assumes developing countries will take on emissions trading from 2015.

While high polluters in industry will be hit hard, households will also take on some of the costs. An average household’s energy bills are expected to rise by a maximum of $A7 per week, or $364 per year, when the scheme begins in 2010.

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