Cement groups warn jobs at risk without local leg-up on carbon Simon EvansSenior reporter
Apr 3, 2023 – 5.40pm
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Boral CEO Vik Bansal says the Federal government needs to guard against ‘carbon leakage’ to other higher emitting countries, and a level-playing field is needed.
Adbri, which operates four cement plants in Australia including the Birkenhead plant in Adelaide, says import parity is needed otherwise local players are at a disadvantage.
Federal Opposition leader Peter Dutton said on Sunday he believes there is a real risk of the cement industry in Australia ‘leaving our shores’.
The bosses of the biggest ASX-listed cement manufacturers echoed concerns aired by federal Opposition Leader Peter Dutton, arguing the Albanese government needs to beef up protection for local manufacturers under the safeguard mechanism to protect jobs.
Mr Dutton warned of the prospect of cement manufacturers “leaving our shores” as the costs imposed on them by the safeguard mechanism on the 215 highest emitters in Australia becomes a handicap which would simply transfer carbon emissions to other markets.
Vik Bansal, chief executive of Boral, said a carbon border adjustment mechanism would help in ensuring local manufacturers could compete with rivals from other countries without a safeguard equivalent. Without that import parity, carbon emissions would simply be shifted overseas, as more cement is imported into Australia.
“We need to ensure local manufacturers remain competitive and there’s no carbon leakage or bleed that occurs with importation of materials from countries with lower environmental standards,” Mr Bansal said on Monday.
Boral wants a level playing field in cement and for the Federal government to recognise that ‘carbon leakage’ offshore will occur if local players are handicapped too much. Louie Douvis
Boral, Adbri, and Cement Australia, a joint venture between global cement giant Holcim and Hansen, are all in the list of 215 companies captured by the federal government’s safeguard mechanism legislation agreed with the Greens last week. A key element of the deal includes Labor legislating an intent to cut annual emissions from the country’s top 215 polluters from 140 million tonnes to 100 million tonnes by 2030. RELATED QUOTES BLDBoral
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Other changes struck in the deal include bumping up transition support to decarbonise industries including steel, cement and aluminium from $600 million to $1 billion.
Cement makers are among the companies able to buy carbon offsets to help cut their baseline emissions.
Adbri chief executive Mark Irwin said speed was important in bringing in a level playing field so that local cement manufacturers are not disadvantaged. Adbri has four cement plants in Australia. The group’s Birkenhead plant in Adelaide, which employs 300 people and has been in operation since 1914, is considered most at risk.
“A carbon border adjustment mechanism would preserve manufacturing jobs in Australia and also minimise the risk of carbon leakage,” Mr Irwin said.
“We hope that the government and the opposition can work together to implement a carbon border adjustment mechanism as soon as possible for sectors such as ours,” he said. Adbri applauded the move by the government to lift funding for industry transition support to $1 billion.
Mr Irwin, a former chief commercial officer at copper miner OZ Minerals, in February was appointed CEO of Adbri for a fixed term until October 2024 after being in the role on an interim basis since October.
Boral’s Mr Bansal said a level playing field was needed in the cement industry, because if the safeguard mechanism resulted in more cement being imported from higher emitting countries, it did not solve the problem. Boral operates six cement plants in Australia.
“While we appreciate the passage of the safeguard mechanism, we’re also urging the government to move with pace on its review into a carbon border adjustment mechanism to accelerate and ensure a level playing field for domestic manufacturers who are committed to decarbonisation,” he said.
Federal Opposition leader Mr Dutton said on the ABC’s Insiders program on Sunday that the cement industry in Australia had “grave concerns” about the future of their manufacturing plants at home.
“The cement industry is one such industry that I think is at real risk of leaving our shores,” Mr Dutton said. “They have very grave concerns about the future of their sector.”
He said the likely backlash on social media was a major part of the reason why more business leaders weren’t speaking out against the extra costs imposed on them.
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