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Carbon scheme puts mill jobs at risk

Posted on November 14, 2008, 3:03am and updated on November 15, 2008 at 6:50 pm

The Federal Government’s carbon emissions trading plan could put up to 1400 jobs at risk in the region if the scheme does not include protection for the Millicent and Tantanoola mills, according to Kimberly-Clark Australia.

Wattle Range Mayor Mark Braes said he would seek to raise the issue when he attends meetings in Canberra on Monday and Tuesday with the Prime Minister and local government leaders from across the country.

“It is an absolutely critical issue,” he said.

“Paper production companies are really concerned and keen to make sure the policy doesn’t unfairly effect them and drive investment overseas.”

Kimberly-Clark Millicent Mill manager Scott Whicker told The Border Watch any increased costs from carbon trading would threaten the plant and not necessarily achieve the goal of reducing emissions.

“If the cost of carbon got to over $40 per tonne it would severely challenge our viability,” he said.

Mr Whicker said the government had to support emissions intensive industries that were unable to pass on costs to survive in a carbon trading environment.

“We are a price taker, not a price maker,” he said, adding changes to the trading environment could lead to an unfair advantage for imports from countries without emission reduction schemes.

He said this would also lead to increased emissions globally due to increased production in nations with lower industry standards and further transport needs.

“You could shut down industry here so some people feel good, but find there is no net improvement and the emissions situation is potentially worse,” he said, adding transitional support was needed for industry until emissions trading became global.

“We support implementation of measures to reduce carbon emissions, but the problem is the industry will die if it has no support because it does not have the ability to pass on costs.”

While he said the repercussions could hit the mill hard, they would have a broader impact as the mill supported 1400 jobs regionally and contributed $800m per year to the region’s economy across three council areas.

Mr Whicker said that while treasury modelling showed new opportunities would arise, this may be limited in regional areas, and compromising the pulp sector would damage the broader forestry industry, which should be supported for its role in the carbon cycle.

He said pulp logs were a critical component in managing and financially supporting plantations.

“Pulp wood makes forestry viable because it gives a cash flow through the life of the forest,” he said, explaining a return was made on forest thinning through the pulp industry.

Kimberley Clark Australia spokesperson Ross Hearne said the pulp-log market was a critical component of forestry industry profitability in regional areas.

“For Kimberly-Clark to continue to support the growth of the region’s important forestry operations, it is important it gains Emissions Intensive and Trade Exposed status through the transitional period until global agreement on carbon reduction is achieved,” he said.

The Australian Plantation Products and Paper Industry Council of Australia issued a statement yesterday warning many mills could face closure or become unprofitable if the carbon cost reached $50 per tonne.

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