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Transcript of Joint Doorstop

8 May 2015

Subject: Renewable Energy Target


With the Minister for the Environment, the Hon Greg Hunt MP

IAN MACFARLANE: Thank you very much for gathering. I understand that you’ve already talked to our colleague Shadow Environment spokesperson Mark Butler. I can confirm that the discussions we’ve had with the Labor Party have been fruitful and we’ve agreed in principle in terms of a 33,000 gigawatt hour target. We’ve also asked, as we have through the negotiations, that wood waste be included in the Renewable Energy Target and that’s an issue which we’re yet to agree on but I am confident that one way or the other we will resolve it.

The main thing is that we’ll both, as in the Labor Party and also the Minister for Environment and I, will be taking to Cabinet on Monday and to our Party Room on Tuesday, a proposal that we accept the 33,000 gigawatt hour target that has been agreed to between the two negotiating teams. The Coalition will be maintaining the biennial reviews operated by the Climate Change Authority and that issue was raised with both Mark Butler and Gary Gray the Shadow Energy and Resources Minister, and they’ve not voiced any objection to that. So, over to you, Greg.

GREG HUNT: So today we have reached a provisional agreement on the 33,000 gigawatt hour target. It is of course subject to the respective Cabinet and Shadow Cabinets and Party Rooms of the two parties. We have also reached agreement, provisionally subject to the Cabinets and Party Rooms, on maintaining in full, untouched, the small scale solar scheme; we have the basis to proceed. So my hope and my expectation is that the Renewable Energy Target issue will be resolved, precisely as we said prior to the election. There would be a review. This was the policy. It was the process.

This will lead to a renewable energy outcome of 23.5 per cent approximately. So not just 20 per cent renewable energy but about 23.5 per cent. That is a very significant basis. It will in fact be a challenge for the industry to achieve that outcome but it will be over to them. I hope and expect that this can be settled now. The number has been agreed upon, the small scale has been agreed upon and the detail we’ll look to resolve in the coming days.

JOURNALIST: Is biomass a deal breaker here, because Labor says they won’t agree to it?

IAN MACFARLANE: Well, we’re confident that we can get biomass through the Senate using the Cross-Bench. For people like Senator Ricky Muir, this is a major issue and we’ve also had that expressed by other Senators. So we’re keen to continue to progress the issue. We’ve told Mark Butler that we will continue to progress the issue. We’ll move legislation in the House of Representatives inclusive of wood waste. We will be relying on the Labor Party’s support to carry the bulk of the legislative amendments which will include the 33,000 gigawatt hour target, but we would expect that the cross-bench will support us on wood waste.

JOURNALIST: But who apart from few mills in Far-East Gippsland’s interested in biomass?

IAN MACFARLANE: Well it’s not just a few mills in Gippsland. It’s an issue in Tasmania and in terms of the Coalition it’s been an issue which we’ve raised at the negotiating table since day one.

GREG HUNT: I would just add one thing on this and that is that this was in Labor’s original legislation. It was also a recommendation of the Climate Change Authority, but it’s something that I’m very confident that we can resolve.

JOURNALIST: Let’s be clear, are you going to put the wood waste in one piece of legislation or are you going to try and move it separately to the other changes?

IAN MACFARLANE: We’ll be moving it as one piece of legislation. What happens to it in the Senate is up to the Senate to resolve, but in terms of the Coalition position, it is a 33,000 gigawatt hour target inclusive of wood waste.

JOURNALIST: But is this a big enough issue to justify continued uncertainty in the industry if no agreement can be made?

GREG HUNT: That will be a matter for the Labor Party. We’ve got agreement on the 33,000 gigawatt hours; we’ve got agreement on the small scale solar. I am very confident, very confident, that this will pass the Parliament as quickly as possible.

JOURNALIST: Why are you so determined to include it?

IAN MACFARLANE: Well it’s been an issue that we’ve raised with the Opposition since day one. It’s an issue which our Party Room believes should be included and as Minister Hunt has just said it was issue that the Labor Party included in their original legislation.

GREG HUNT: … And which the Climate Change Authority recommended.

JOURNALIST: When might we see legislation be introduced?

IAN MACFARLANE: Well I mean that really depends on the reaction of our Party Room and of the Labor Party and their Caucus, but as soon as possible bearing in mind that we’ll have Budget bills to carry through.

JOURNALIST: What do you make of the comments from the solar industry that wind is going to take up the rest of the head space in the Renewable Energy Target under this deal? Are there any provisions that will see household solar get a boost in this?

IAN MACFARLANE: Well the scheme is as Penny Wong and the industry and I agreed. It is on the basis that to date we’ve seen, with the one or two exceptions where projects have been supported by the Australian Renewables Energy Agency, the renewable energy space taken up by wind. We have to remember the size of the task; we have to see as much renewable energy generation, in fact more, created in the next five years, as has been created in the last fifteen. That is a massive task. It’s why the Cabinet last night insisted that we maintain the biennial review process, because it has the potential to impact on the price of household electricity.

If Renewable Energy Certificates become short, let alone the scheme defaults, we could see a doubling of the cost of a Renewable Energy Certificate and that translates directly into the price of electricity for a household.

So look, you’d have to say that by far the majority if not all will be taken up by wind, but that’s the challenge. The Clean Energy Council’s assured us that that will be a challenge they can meet. In an oversupplied market where you’ve got 9,000 megawatts of overcapacity in generation in a 50,000 megawatt market, there is more electricity to go around than anyone can use. So that’s the challenge for the industry. They have to build the wind farms, they have to get community support and they have to sell their electricity.

GREG HUNT: At the end of the day what we have provisional agreement on today is effectively 23.5 per cent of renewable energy, far more than the 20 per cent. It is a sensible package, it’s a sensible balance and I think and hope that we can just get on with the job of producing energy from here on.

JOURNALIST: Just quickly, just speaking on sensible. Do you agree with the Prime Minister’s chief business adviser that the UN is using climate change as some kind of attempt to institute a new world order over the climate?

GREG HUNT: Look, individuals are entitled to their views. I met this week with Christiana Figueres and we had very constructive talks. Our goal is to be part of a constructive, post 2020 agreement. We’ll be one of the few countries to have met the first round of our international targets, to have met the second round of our international targets, and then we’ll be in a position, as we’ve already said, to make a constructive round. We want to address the problem, we’re working with other countries and we’re working with the international organisations. Individuals are entitled to their views. Our approach is to work constructively with all international parties.

JOURNALIST: Do you agree with that view?

GREG HUNT: Look it’s not been something that I’ve expressed; it’s not something that I would express. Ok, thank you.

IAN MACFARLANE: Thanks guys.

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