MAC: Mines and Communities

Australia: carbon bonuses to miners, as pollution increases

Published by MAC on 2008-12-30

Rio Tinto will receive nearly half a billion dollars of free emissions traded permits in 2010 if the Australian government's most recent white paper isn't countermanded.

According to the government's own figures, the mining industry doubled its energy use beween 1991 and 2006. The intensity of usage has been increasing by just under 4% each year, as companies exploit lower grade and deeper-seated ore bodies.

Data shows mining pollution is worsening

The Age

23rd December 2008

The mining industry might have secured significant concessions in the government's plan for emissions trading, but fresh data shows it is becoming a worse greenhouse gas polluter with each passing year.

Mining companies are heading in the wrong direction on climate change, using more energy and becoming less energy-efficient.

The industry more than doubled its energy use over the 15 years to 2006.

And the amount of energy used per unit of output - called energy intensity - has been increasing by 3.7 per cent a year.

The fight against climate change is generally held to involve using less energy and becoming more energy-efficient.

The findings are contained in a report by the federal government's Australian Bureau of Agricultural and Resource Economics (ABARE).

The government's white paper on emissions trading, released last week, offered a significant number of free permits to mining companies to shield them from the full costs of emissions trading.

Conservationists have strongly opposed the move, while the government's own climate adviser Ross Garnaut says assistance to business is "over the top".

According to analysis commissioned by the Australian Conservation Foundation, mining giants will reap billions of dollars worth of free permits under emissions trading.

In the first year of emissions trading in 2010, Rio Tinto will get $462 million in free permits, Bluescope Steel $174 million, and Alcoa $170 million.

The ABARE report found mining companies' energy efficiency was getting worse because the industry was going after lower grade ores, and ores which were deeper in the ground. The industry was using more energy in exploration.

The report also found agriculture was heading in the wrong direction on climate, with energy efficiency in decline. But this was because of the drought cutting production.

Other industries are headed in the right direction. The construction industry has significantly improved its energy efficiency, while the manufacturing and services sectors have modestly improved their energy efficiency.

ABARE noted that APEC leaders, including Australia, have committed to reduce their energy intensity by 25 per cent by 2030.

The report found that industries accounted for just over half of Australia's energy use, while households used 12 per cent.

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