The smattering of new cash for renewables and the lack of real action on climate change in last night’s Federal Budget have been criticised.
CEC: Budget Missed The Mark On Renewables
While welcoming funding for microgrids and off-grid systems for rural and fringe-of-grid communities, the Clean Energy Council said last night’s Federal Budget 2022-23 missed the mark in terms of the big picture for renewables.
“The lack of transmission investment is now one of the most critical challenges facing Australia’s energy industry,” said CEC Chief Executive, Kane Thornton. “Instead, yet another Federal Budget has prioritised the fossil fuel industry when Australia’s bottom line should be focused providing a better future for communities through clean, low-cost renewable energy and storage.”
The fuel excise reduction announced last night will no doubt be welcomed by many, but it’s at best a toxic sugar hit and a band-aid over a gangrenous wound – a wound that will be further irritated.
The CEC says greater focus on the electrification of transport was needed to “release our shackles” from fluctuating fuel costs as a result of events occurring overseas.
“The transport sector accounts for nearly 20 per cent of Australia’s emissions,” said Mr. Thornton. “The Federal Government’s own target is for 30 per cent of all new car sales being electric by 2030, and tonight’s Federal Budget doesn’t get us any closer to that target.”
The CEC also welcomed aspects such as the three-month extension of the apprentice wage subsidy, which it sees as a small step in addressing the clean energy skills crisis. However, support is lacking for engineers and specialist trades, and the CEC says more needs to be done for coal communities in terms of pathways to help transition many coal workers into clean energy careers.
Climate Council: “Massive Lost Opportunity”
The Climate Council lamented what it said was any meaningful new commitments to address escalating climate change in Australia, and calculated just 0.3% of total expenditure for 2021-2024 has been committed to climate change initiatives – with much of that already committed prior to this Budget.
Commenting on cash earmarked for disaster recovery, Climate Councillor Nicki Hutley said:
“The costs of disaster recovery are stark, and yet there is nothing in this Budget that addresses the root cause of climate change, which is exacerbating these extreme weather events and their impacts.”
Like the CEC, the Climate Council believes the fuel excise reduction could have been better spent on supporting electric vehicles and EV infrastructure investment; as well as public and active transport initiatives.
Greens: A Budget Of Bribes
Greens leader Adam Bandt didn’t pull any punches, saying it was budget of bribes funding coal and gas and making housing more expensive.
“The Liberals say Australians are ‘resilient’,” he tweeted. “We have to be. We’ve put up with almost 10 years of your bullshit.”
On a somewhat related note, the second edition of BNEF’s G-20 Zero-Carbon Policy Scoreboard released yesterday notes 11 out of the 19 nations upped their total scores this year. But Australia was among the countries whose scores declined, dropping 2 percentage points to 45%. In the power category:
“Australia and Turkey took the biggest tumble mainly due to rising greenhouse-gas emissions, coal fleet expansion plans, and unambitious renewables and fossil-fuel policies.”
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Regarding the fuel excise cut, The Australia Institute’s Richie Merzian reportedly said: “At the current rate of the global oil price rise, this short-term fuel discount sugar hit will be wiped out by mid-year – and that’s if it is passed on to customers at the bowser in full.”
https://reneweconomy.com.au/federal-budget-slammed-as-another-massive-missed-opportunity-for-climate-action/
A blog post by natural resource investors Goehring & Rozencwajg on Mar 24, titled The Oil Crisis is Unfolding in Slow Motion, included (bold text my emphasis):
https://blog.gorozen.com/blog/the-oil-crisis-is-unfolding-in-slow-motion
At US$185 per barrel, Australian regular unleaded fuel prices could “edge towards $2.70 a litre”.
https://au.finance.yahoo.com/news/petrol-prices-could-hit-270-a-litre-013400776.html
A short-term (only for 6 months) cut in fuel excise of $0.221 per litre, announced in last night’s Federal Budget, will likely soon be overwhelmed and wiped out by further fuel price rises. And what then happens in 6 months (after the 2022 Federal election has been decided)?
IMO, the Budget also fails to deal with Australia’s fuel supply vulnerabilities. Per Matt’s analysis at crudeoilpeak.info, as at Dec 2021, Australia had in-country stocks at normal consuption rate of:
• Diesel supply for 21 days (see Fig 1)
• Petrol/gasoline supply for 25 days (see Fig 2)
• Jet fuel supply for 50 days (see Fig 3)
• Crude oil feedstocks for the two remaining operating refineries (Lytton,Qld & Geelong, Vic) for 34 days (see Fig 4)
https://crudeoilpeak.info/australian-oil-stocks-consumption-cover
Vitol’s chief Russell Hardy warned that a diesel shortage could trigger fuel rationing in Europe.
https://oilprice.com/Energy/Energy-General/Rationing-Looms-As-Diesel-Crisis-Goes-Global.html
I’d suggest Australia needs to substantially reduce its petroleum dependency fast. But it seems to me that’s not what the Federal Coalition Government is advocating for.
Fails, or simply doesn’t prioritise? That’s not the same thing.
The federal government is investing in rare earth industry for instance and something to do with batteries, or the materials for them. Is this considered climate change investment? I’m guessing it’s treated as industry rather than climate change investment i.e. sleight of hand condemnation.
The CEC claim the fossil fuel industry has been prioritised, but what’s the basis for that claim? Is that simply a reference to making petrol affordable again after the government recognised that ~60c taxation (GST + excise) was excessively expensive? Note too the ABC has criticised the government for creating a ‘dirty bomb’ for Labor – the theory being that Labor will be elected, petrol will rise 45+c when excise is restored, folk will have to decide whether they can actually afford to leave their homes, and Labor will be blamed for the soaring cost of living.
The Climate Council believes investment in EVs and EV infrastructure would be better, but isn’t that simply more urban spending, especially more support for the 10%ers? How does that help ordinary Australians, especially those outside the capital cities? The excise removal helps all Australians. Yes I’m aware of the claim that if cities switch to EV that frees up petrol for non-city dwellers, but if there’s no profit being made in cities then rural regions have to pay for all the profit to be made which would actually mean higher prices not lower.
While the Climate Council laments the failure to spend up big on climate change, can Australia actually afford to do so? There are budget elements that are essential and unavoidable e.g. funding for pension, education, hospitals (yes this goes to the state but it’s still funding), road and other infrastructure, PBS, military, cybersecurity, aged care, science, and I’m no doubt missing a lot. Once those are all funded appropriately, what’s left? How much fat\pork barrelling was in this budget? The information I’ve seen about it has been … lite so it’s not possible to judge.
As for the Greens, why bother giving those extremists any time?
All in all, far too early to judge the budget based on what I’ve seen.
George Kaplan,
“The CEC claim the fossil fuel industry has been prioritised, but what’s the basis for that claim?”
Did you not read the CEC media release, George?
https://www.cleanenergycouncil.org.au/news/federal-budget-fails-to-prioritise-rapid-transition-to-renewable-energy
Or the RenewEconomy article by Michael Mazengarb headlined Climate spending cut as Frydenberg delivers empty budget for clean energy and EVs?
https://reneweconomy.com.au/climate-spending-cut-as-frydenberg-delivers-empty-budget-for-clean-energy-and-evs/
“The Climate Council believes investment in EVs and EV infrastructure would be better, but isn’t that simply more urban spending, especially more support for the 10%ers?”
Nope.
How does that help ordinary Australians, especially those outside the capital cities?”
Rising diesel fuel prices increase prices for nearly everything. I’d suggest rapidly reducing Australia’s petroleum dependency, particularly for diesel fuel, would improve Australia’s energy security and cost of living.
Global diesel fuel production has been in decline since the end of 2018 (well before the start of the COVID-19 pandemic and the Russian invasion) – see the graph labelled gasoil y diesel (Spanish for gas oil and diesel) below the heading El diésel at: https://crashoil.blogspot.com/2021/11/el-pico-del-diesel-edicion-de-2021.html
Gas oil, that’s essentially diesel (dyed red in the UK), is mainly used as a commercial fuel in many industries for the purpose of powering machinery, generators and for vehicles used off-road, including those used in the agricultural, construction and marine sectors to name but a few. Gas oil is taxed differently compared with diesel used for road transport.
Geoff, I read the CEC article but didn’t see facts or figures pertaining to the matter. Soundbites and claims sure, substance no.
I hadn’t read the Renew article before but it reads like a Labor piece. Why the federal government should be blamed for incompetent (criminally negligent?) state handling of flood issues is beyond me!
It says the current $2 billion budget is dropping to $1.3 billion in 2025-26, except that’s years away and budgets will change before then. I also don’t see any reference to the $175 million for four projects announced in March.
For winners the piece notes there’s $50 million for new gas exploration and pipelines, a halving of the fuel excise, tax privileges for low emissions technology patents, plus $400 million for ore processing and low emission manufacturing of ammonia and carbon capture and storage projects.
For losers the piece notes there’s no subsidising of EVs (which most Australians cannot afford), there’s no additional spending on renewable energy or R&D, and there’s no significant spending on new network infrastructure.
The piece was written by a Sydney-based reporter writing on climate change, clean energy, electric vehicles and politics. What a surprise! (/sarc!)
Oh. As for rising diesel prices, what impact are EVs supposed to have on diesel prices? Scania do have at least one option, but 250 km won’t get you anywhere. That’s half the Stockholm to Oslo distance, roughly a quarter of the Melbourne to Sydney distance, a seventh of the Brisbane to Cairns distance, and about an eleventh of the Adelaide to Perth distance. Instead of that day or overnight deliveries will you be looking at week long delivery runs with drivers spending a couple of hours on the road and the rest of the day recharging their trucks?
George Kaplan,
There are none so blind as those who will not see.
“As for rising diesel prices, what impact are EVs supposed to have on diesel prices?”
None; diesel will only get more expensive as global crude oil production inevitably declines due to geological constraints with extractions of remaining reserves. The era of cheap oil and petroleum fuels has ended forever.
Battery electric trucks that aren’t dependent on primarily imported, increasingly scarcer and more expensive diesel fuel to operate will apparently be significantly cheaper, like the Janus prime-mover with swappable battery units with 500-600 km range for a single trailer or 400-500km for a B-double.
https://thedriven.io/2022/02/10/janus-unveils-first-electric-truck-for-australian-east-coast-battery-swap-route/
When there’s scarce or no fuel available and trucks stop delivering goods, supermarket shelves soon become empty. I experienced that happen in the UK in 2000. Fuel strikes usually get resolved quickly; but increasing geological constraints on future oil production are non-negotiable.
https://en.wikipedia.org/wiki/Fuel_protests_in_the_United_Kingdom
Geoff, we can agree that “there are none so blind as those who will not see”. Only time will tell which is which.
Thanks for the Janus link. It’s better than the Scania data I Ducked, but still range limited. The company plan to avoid that issue by creating battery swap charging stations. They argue electricity costs are less than half those of diesel, except what assumptions are they using? They say a 960 km Brisbane to Sydney trip by a B-double would require around 1732kWh and cost about $320. That translates to about 18.5c per kWh. What about station margins or isn’t the company aiming for a profit?
The technology is obviously improving, but has it improved enough? Ultimately it’ll be up to the freight companies to work that out.
Many of the proposed budget increases outlays are long overdue anyway, and the deficiencies they claim to address were in quite a few instances brought about by the Liberals themselves in the first place. eg. delayed indexation of pensions over a long period of time.
It’s a ‘smoke and mirrors’ job to some extent, mingled with an attempt to hand any incoming new Federal Government a ‘poisoned chalice’. That’s possibly because the LNP deem it highly likely that they’ll lose office in the upcoming election and want to make it as difficult as they can for their successors