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Australian steelmakers welcome compensation under the carbon tax

It is reported that Australian steelmakers have cautiously welcomed the compensation offered to the industry under the Federal Government's carbon tax.

The steel industry will be eligible for 94.5% assistance, plus access to an additional USD 300 million steel fund, which is expected to compensate for any remaining costs.

BlueScope Steel is among those that could end up gaining financially from the package over the first four years. Mr Paul O'Malley MD of the company said that the Government has responded to the industry's worries.

He added that "I think the Government has been very pragmatic in listening to the concerns raised by steelmakers and coming up with a package that materially mitigates the cost that we would incur over the next four years."

Mr O'Malley says it is an improvement on the previous scheme. He added that "When we reported in May, an analysis of the CPRS at the time, we highlighted a significant material cost we might face. That material cost has now been materially mitigated as a result of today's announcement."

The Australian Workers Union says BlueScope Steel could receive USD 40 million a year of assistance under the plan.

Port Kembla branch secretary Mr Andy Gillespie, based in the industrial hub of the Illawarra region in New South Wales, says initially the tax package looks positive. He added that "On the surface one would be happy about the industry packages that have been offered. I need to go away look at it, digest it, understand it, and then come back and make some positive or otherwise comments."

A Labor backbencher from the Illawarra region, Throsby MP Mr Stephen Jones, is also doing his best to sell the tax to a region that relies on carbon intensive industry. He says the Government's industry assistance package includes USD 1.3 billion to support jobs in the coal industry as emissions are reduced. Illawarra mines will be more vulnerable to the carbon price than some others because of their high methane emissions.

But Mr Jones says the overall impact on coal operations will be minuscule. He said that "One area where there was some exposure is the gassy mines. And that's why the USD 1.4 billion coal package was critical to ensuring we give mines in this region an opportunity to extract that methane, and turn it to commercial purposes while saving on greenhouse gas emissions."

Mr Arthur Rorris, from the South Coast Labour Council and Green Jobs Illawarra, has welcomed funds to assist with the transformation to renewable energy and low emission industries.

The Greens negotiated programs including a USD 10 billion Clean Energy Finance Corporation and USD 3 billion to support new low emission technologies reach the market.

Mr Rorris says the Illawarra is prepared to attract its fair share of this funding. He added that "The Illawarra is in a prime position to take advantage of that, and perhaps unlike some of the regions we actually have a plan about how to get there. The thing that we had missing was certainty in public policy and investment funding, and now we have both."

Sourced from www.abc.net.au

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