Food processing added to Australia’s carbon cutting scheme

By Mike Stones

- Last updated on GMT

Related tags Australia

Plans to include food processors in Australia’s Carbon Pollution Reduction Scheme (CPRS) but with special support have been welcomed by the Australian Food and Grocery Council (AFGC).

The coalition planning the introduction of the CPRS has proposed that key export industries, including food processing which is the nation’s largest manufacturing sector worth about A$100bn/year, should receive extra support.

Kate Carnell, AFGC chief executive said: “AFGC congratulates the coalition for its willingness to support trade exposed industries like food processing and we now urge the government to support these amendments​.”

The government is to limit the total amount of carbon pollution that can be emitted from the country. Companies or other groups that need to emit carbon to do business must buy permits (or may be issued with them). These represent the right to emit a specific amount of carbon pollution.

Cost of power

The problem with the CPRS legislation is that it lead to significant increases in the cost of power, said Carnell. “While industry is doing its best to reduce power use, the CPRS will ultimately impact upon prices on supermarket shelves,”​ she said.

Food and grocery bills account for 20 per cent of the average weekly household budget. So food and grocery prices inflated by CPRS rules could have a big impact on Australian families, warned the council.

Consumers are likely to respond to the legislation by buying cheaper imported goods because the prices of domestic food and groceries are expected to rise by up to five per cent. “This means Australian manufactured goods will be at a major disadvantage and jobs will suffer​,” said Carnell.

Goods imported from countries in Asia would not be affected as they are unlikely to be subjected to a carbon charge in the foreseeable future, said the council.

Meanwhile, the coalition has further recommended that agriculture should be permanently excluded from the Federal Government's emissions trading scheme. Farmers should be able to claim credits for carbon absorbed by soil and vegetation, it said.

The National Farmers’ Federation welcomed the proposals describing them as making "good economic and environmental sense​."

Direct emissions

Its president, David Crombie said: “We have been consistent and clear that the CPRS in its current form doesn’t work for agriculture. Covering Australian farming’s direct emissions would be catastrophic for our farmers and the communities and jobs they support​."

Farmers had a "demonstrable record​" in positively managing carbon and should have incentives to do this, he added.

The government plans to introduce a cap-and-trade CPRS in 2011. Big polluters will be required to acquire permits for reduced levels of emissions. Agriculture won’t be included until at least 2015 with a final decision taken in 2013.

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