Albanese’s $2 billion counter bid for a power-hungry industry

Small business groups and the hospitality sector welcomed Dutton’s policy, which he said would last for two years and exclude alcohol, as a way to sustain spending in cafes and restaurants.

The four big aluminium smelters are key flashpoints in the argument over the shift to renewable energy, with the Portland site recently sealing a nine-year energy deal to cut its use of fossil fuels, while the Tomago site warned in November that the cost of clean energy was too high.

Industry Minister Ed Husic said the new policy would get “jobs up and emissions down” by using the production credits to support the case for renewable energy at each smelter.

The Bell Bay smelter is in the marginal electorate of Bass, the Gladstone site is in the Nationals seat of Flynn, Portland is in the Liberal seat of Wannon and Tomago is in the seat of Paterson, held by Labor on a margin of 3.3 per cent and targeted by the Liberals.

While the Bell Bay smelter has access to clean power from Tasmania’s hydro industry, the transition to renewables is more challenging at the three other locations. The federal scheme will be based on contracts with each company, negotiated separately.

American company Alcoa runs the Portland smelter with Marubeni and Citic as minority shareholders, employing 760 people. With demand for aluminium rising, it plans to ramp up production after reaching an energy supply contract with AGL in September.

At Tomago Aluminium, however, chief executive Jerome Dozol warned in November that renewable energy was too expensive and the company would not be able to meet goals to cut greenhouse gas emissions by 2030.

“The price of electricity on offer is too expensive for us to keep operating without government intervention,” he said. Tomago employs more than 1,000 workers.

Rio Tinto, the mining giant that operates the Bell Bay and Gladstone smelters, backed the Labor policy in a crucial move when the Coalition is seeking corporate support for its nuclear plan.

The chief executive of the company’s Australian operations, Kellie Parker, said traditional energy sources were becoming uncompetitive and the new policy would help “future-proof” the industry.

The Australian Aluminium Council, which has sparred with the government over its measures to impose costs on companies for their carbon emissions, also backed the Green Aluminium Production Credit.

Council chief Marghanita Johnson called the new policy a “substantial step forward” for the sector and said it would support 75,000 direct and indirect jobs.

Dutton stepped up his attack on the government over energy policy on Sunday in a speech to Liberal supporters in the Queensland electorate of Ryan, held by the Greens but previously held by the Liberals.

“We know that our economy is hamstrung by exorbitant energy costs, and thanks to Labor’s policies we’re paying some of the highest power prices in the world,” he said.

“The Albanese government’s reckless renewables-only policy will carpet Queensland’s prime agricultural land and national parks.”

The federal government energy policy does not support renewable energy alone. It assumes the construction of new gas-fired power stations over the decades ahead to provide electricity when solar, wind and other sources are not available.

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