Carbon Tax: Which companies will pay?

I was writing an article on Monday for my paper about the carbon tax. The Government released a vast amount of information on Sunday about their new proposal. I had interviewed a couple of the local gas companies, Santos and Origin, a few weeks prior and I was keen to write about the coal seam gas industry impact of the tax, which had local implications. In her speech to the nation on Sunday, Prime Minister Julia Gillard said around 500 big companies would pay for every tonne of carbon they produce. Climate change minister Greg Combet confirmed it in one of his releases. I assumed the gas majors I spoke to would be on the list.

However a very quick look at the new government website “cleanenergyfuture” showed the list was nowhere obvious. ABC chief political correspondent Sabra Lane said those affected would be “mining, steel companies and aluminium manufacturers”. There was no mention of coal seam gas. So I set the task of finding the 500 to a keen young journalist who started here last week. I thought it might be a tough task for her because this is one of the more incendiary consequences of the legislation and therefore one the Government might not be keen to publicise. I gave her 15 minutes to find it.

After 10 minutes of silence, I realised this must be harder than I thought and I went looking for it again. I was no more successful than my new journo, so I thought it was time to ask Twitter. Turns out it wasn’t obvious there either. “Good question” was the best response I got; others were on the line of “let us know if you find out.” In the end what we wrote in the newspaper was “precise information on which companies were in or out were not available when the Western Star went looking.”

Annabel Crabb did find more precise information when she turned her attention to the problem yesterday. Crabb wondered who was in the “Misfortune 500 and said the biggest companies may not be the biggest emitters of carbon. "Can we get a list?," she asked. “No - we can't" said the Government. The 500 companies are not an identified list but an estimate of how many companies in Australia would be caught by the scheme's eligibility rules.

I eventually found the Government page that talks about the 500 companies. “Most are companies operating large facilities (with over 25,000 tonnes annual CO2-e emissions) that directly emit greenhouse gases, such as power stations, mines and heavy industry,” the site said. “Some are public authorities responsible for emissions from landfills.” A fact sheet gave a breakdown of where the companies were. NSW and Queensland had half the companies, 100 were involved in coal, 60 each in electricity and heavy industry, 50 in other fossil fuel and 40 in natural gas. I assumed the latter category covers my local companies, but could not confirm this as there were no company names in the fact sheet.

For political reasons, petrol and agriculture are exempt and Crabb explained other problems with the eligibility rules. “A company with 20 facilities each emitting 24,000 tonnes of CO2 a year would not be liable, while some poor boob with one factory emitting 26,000 tonnes of carbon dioxide and 19 clean green beansprout-fired tofu smelters would still have to cough up.”

Crabb found the compulsory reporting that is done under the National Greenhouse and Energy Reporting Act 2007. The National Greenhouse and Energy Reporting on “Greenhouse and Energy Information 2009-2010" has a list of 300 companies that emit more than the 2009-10 annual threshold of 87,500 tonnes a year. It does not break the data down by facility but it is difficult to see how companies like Macquarie Generation (23.4 million tonnes), Delta Electricity (20.45m), CS Energy (16.8m), TRUenergy (15.6m), Blue Scope Steel (10.8m), Woodside Petroleum (8.4m), Alinta (7.8m), and Alcoa (6.75m) can avoid paying some of the tax. There were only 300 companies in this list, so 200 others need to be added.

Both of the coal seam gas companies I was interested in were on the list, Santos at 3.57m and Origin at 1.87m. So the likelihood is, as I suspected all along – they will both be in the 500. At $23 a tonne I estimate Santos will have to pay $85m a year and Origin $43m. Macquarie Generation (getting their message out through the sympathetic Australian) are up for a bill of $538 billion. Despite what the Government said, it should not have been that hard to find out. Watch out too for fiddling along the edges as companies try to make the most of that “facilities” loophole.