Greens propose coal tax to foot bill for energy clean-up

Published by

The Australian Greens have unveiled a major new policy proposal that would use a levy on coal miners to fund the nation’s transition away from the heavy polluting fossil fuel that is already happening at a global scale.

The plan, to be formally unveiled by Greens leader Richard Di Natale on Tuesday afternoon, is that the tax would be used to fund the “billions of dollars” needed to rehabilitate former coal mine and storage sites – a cost often borne by state governments – and to retrain coal industry workers for jobs in the emerging clean energy industry.

“As coal companies go bankrupt or leave Australia, it is coal workers who are hit the hardest, followed by state governments, who are regularly left to foot the bill for cleaning up the mine,” Dr Di Natale said on Tuesday.

Indeed, just last week a report published by Carbon Tracker, Energy Transition Advisors, Earth Track and the Institute for Energy Economics and Financial Analysis (IEEFA) named coal mine rehabilitation as one of the major areas of government subsidisation to Australian coal production.

The report noted that, according to independent analysis of Australian mine closure and rehabilitation liability published in May 2015 by Lachlan Barker, Australian mining has generated at least $A18 billion of rehabilitation liabilities, mostly unfunded.

Meanwhile, the global coal market is being pounded by cheaper renewables, falling demand from major markets like China and India, energy efficiency measures, rising construction costs, a rash of legal and climate challenges, and shale gas.

As Di Natale points out in the Sydney Morning Herald, “This scenario creates two major public policy challenges: how to transition thousands of jobs in the sector; and how to pay for billions in clean-up and rehabilitation costs for dozens of disused coal mines.”

The policy proposed – compulsory coal industry payments that would contribute to “a Federal Trust Fund for the companies to access at the conclusion of their operations” – aims to meet these challenges as the global coal market starts to dive.

“The rapid decline in Australia’s coal exports in recent years is not a cyclical blip but a structural and terminal decline that will not recover,” Di Natale said.

“China, Japan and India are all diversifying their energy sectors away from imported coal, with coal imports from China down 31 per cent already this year.

But whether the Greens proposal will gain popular support, let alone support from across the political spectrum, remains to be seen.

Certainly the recently replaced federal resources minister, Ian Macfarlane, was not a fan of this idea. “If someone has a non-competitive power station then it’s up to them to close it,” he said last year.

And last week, Australia’s new energy minister, Josh Frydenberg, didn’t show many signs of a change in the Coalition’s attitude to coal industry investment and subsidisation.

In interview with Fairfax media, the newly sworn in energy and resources minister reiterated the government’s plan to use taxpayer money from its $5 billion Northern Infrastructure Fund to help get the Adani-owned Carmichael coal mining project off the ground.


As we wrote last week, Frydenberg was equally clear that the Turnbull government’s attitude to developing new coal projects – despite the smart money being on all untapped fossil fuel resources staying in the ground, and despite the fact that most banks and institutional investors won’t touch the Galilee Basin project with a 10 foot barge pole – remains the same as the Abbott government’s.

“[Carmichael coal mine is] a very important project, which will see significant investment in Australia and provide electricity to millions of people in the developing world,” Frydenberg told the AFR, repeating the mantra of his former boss.

“Anti-development activism can create major delays in projects and send investment offshore, and you have to be very conscious of that when there are such large time frames involved and we are competing internationally for investment in this country,” he said.

Sophie Vorrath

Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. She is the co-host of the Solar Insiders Podcast. Sophie has been writing about clean energy for more than a decade.

Share
Published by

Recent Posts

Old king coal risks leaving Australia “in the dark” as aging power plants grow unreliable

New research reveals more than 60% of Australia’s remaining coal power fleet is more than…

23 January 2025

AEMC answers state’s call to use mothballed diesel plants for emergency summer back-up

A temporary energy market rule change will allow two mothballed diesel generators to be used…

23 January 2025

The devil of Frontier’s nuclear modelling is not in the detail, it’s in the omissions

Frontier's nuclear modelling poses a valuable question about the pace of decarbonisation and what we…

23 January 2025

New records for solar and coal underscore urgent energy challenge facing NSW

Australia's biggest coal state continues to reach new solar heights, but a different sort of…

23 January 2025

Transgrid locks in supplier of high-voltage transmission kit for HumeLink project

Transgrid has selected the supplier of more key components of its massive HumeLink project, the…

23 January 2025

Federal green bank gets $2 billion top-up to seize “big opportunities”

As Trump pulls the US out of the clean energy race, the Australian government moves…

23 January 2025