Senate Economics Legislation Committee, , 5:36:33 to 6:22:25
DISR outlines industrial support packages for Whyalla and Tomago, and the design of green aluminium production credits.
Topics: Manufacturing, Government spending, Electricity grid
Speakers: Senator The Hon Tim Ayres, Louise Talbot, Senator Kerrynne Liddle, Senator The Hon Jane Hume, Troy Sloan, Interjection, Julia Pickworth, Senator Lisa Darmanin, Senator Richard Colbeck, Simon Draper, Speaker 27
Okay. Um, the committee now commences with the department of industry, science and resources, corporate enabling and business services. I remind senators and witnesses that the committee has set 5th of Nove November 2026 is the date by which senators are to submit written questions on notice and 17th of December 26 as the date for return of answers to questions on notice. The committee welcomes again Senator the honorable Tims in his capacities as minister for industry and innovation and minister for science and I welcome Mr. Simon Draper secretary of the department of industry science and resources. Um Mr. Draper we have your opening statement. U we will incorporate it and in the interest of time if okay with you we will
>> I was only going to introduce myself so
>> well welcome we'll go
>> just just welcome Mr. Draper he's just started and thank uh Megan Quinn who
>> of course
>> has of course um left >> uh the department to be the secretary uh of defense where she'll make a very uh important contribution and welcome Mr. Draper uh to the role and um treat him gently on his first day.
>> Yes, thank you. Welcome to the best >> Uh we will go straight to questions and starting with Senator Little.
>> Thank you. Um I'm interested to know what's the total amount of com funding that has been committed to inter industry bailout since 2022.
>> Is this a question about enabling services? Just to confirm, Senator,
>> sorry I didn't hear you.
>> I understand we're dealing with enabling services at the moment. Is that a question related to the enabling services in the department or you looking for something that maybe you may maybe dealing with in the next section?
>> Well, the these are questions in relation to the effect of the net zero policies modeling on the cost of industry of net zero tomagoa. So you tell me where where they belong. >> I believe they belong here.
>> Perhaps if I can um sort of talk and we can navigate the best area for us to pick it up. So uh if there were particular programs you wanted to talk about at a program level in terms of macro dollars we can talk about that. If you want to get into the specific detail about programs then we probably would pick that area up in 1.1 I suspect.
>> Right. Okay. Um is it mostly in relation to industrial facilities? So, can we just we work through and see whether you want to push it to 1.1 or
>> 1.1 might be better if you want to get into with officials that are actually looking at the policy aspects of that. If you just want to talk dollars, we can >> jump into
>> Okay. So, um what about uh we've got I've got some questions on notice that I'm going to put in terms of the Geneva AI summit. Where would you like that to
Um >> it's going to be in Geneva I think Senator
>> No I'm talking about minister in in terms of the department which
>> yeah so if you want to talk about AI policy in that within the economy I think that's 1.2 two is probably where you would want to pick that part up.
Right. Green aluminium production credits. Is that 1.1 as well?
>> Yes.
>> Right. Okay. And obviously the WA blast service would be the same again.
>> Yeah. And in there we'll we'll learn a bit more about the impact of the programs which yes or no see tens of thousands of regional Australians lose
their jobs. The question is not more complicated than where does this need to be asked
>> not more complicated for you but for the people in those communities it means
with the substance when we get to the relevant areas.
>> Thank you. So 1.1 is the tomago bailout. >> Thank you. Just through this uh bill bay questions put those on notice. They will go 1.1 on notice. Sorry about bay. Uh
yes, I think 1.1 would be would be the right place to industrial transition.
>> All right. Industry growth program grants.
>> Uh so grants we can probably pick up as part of my remitting business grants hub or we could also pick it up in 1.1 if you want to talk policy. So
>> all right. Okay.
>> And I'll be here for that if that's helpful. So
>> right. I'm trying to truncate some of >> you won't lose your opportunity to deal with those if you do it in one place. So um if we go through these then that would help to further truncate our questions.
>> Yeah absolutely
>> make it much easier for this committee to get through. me a bit while we get work this out. >> So um industry growth programs I am actually going to put that on notice. So that's fine. I I'll put it under 1.1. Um Liberty Bay bill closure. I'm assuming that's 1.1 as well. Right. Okay. we got any more information for us? Um, the pack silica and project vault. Is that I'm going to ask that on notice, but where would you like that one?
>> 1.31.2.
>> Sorry. >> 1.2. Thank you. Uh, Queensland battery manufacturing precinct. We got you know what we're coming up with questions, but we get this right.
>> I think that'll be 1.1. and we'll make sure that we'll have officials listening so they can obviously track
>> make sure we've got people for those. >> We'll go straight to 1.1 then.
>> Let's go to
>> That's very helpful. Thank you.
>> Well, uh very happy to do it.
>> Let's welcome uh representatives from program 1.1 growing innovative and competitive businesses industries and
regions. Can I suggest though just on off chance that we have um uh mixed some of our 1.1 questions up with areas of corporate that those that are corporate stay close by?
>> Thank you.
>> Are you very good to see you?
>> They're they're standing in here. Have you got questions for one? Well, they're here. So, who's first? Okay, I can ask questions. >> We're going to Senator Little.
>> Thank you.
>> So, we'll go back to what is the total amount of Commonwealth funding that's been committed to industry bailout since
>> Perhaps you can just clarify what do you mean by industry bailouts? Can we just make sure we got
>> about industrial facilities?
>> Industrial facilities. So, you'd like to go through perhaps we can go through the ones that have been um received government support to keep operating. That's right. >> And we can set them out one by one.
>> Those that are going south and those that are that sought assistance to keep them sustainable.
>> So, um, Senator Julia Pickworth, Deputy Secretary, Industry and Commercialization Group, what might be useful is, um, we could provide an update on, uh, some of the industrial facilities where we've, um, had announcements since the last estimates. Uh, and so I might pass to my colleagues and we'll just step through it that way.
>> Yep. And if you can, as you're doing that, if you can provide at the same time the total amount of that commerce
>> Senator Troy Lane, acting deputy secretary, metals and materials investments and still works. Um before I hand to my colleague to as Miss Pickworth said to maybe talk about some of the announcements since the last budget um I just want to sort of get a give a bit of context because we use a range of uh tools to provide assistance. Um it's hard to add it up. So what I mean by that some will be grants, some will be financing mechanisms which obviously have a different impact uh on the on the budget and and with financing instruments we expect that to be uh repaid. We also have other mechanisms uh designed to limit exposure uh things like reducing the subsidy or the support if um if uh they're higher prices. We have um gain share mechanisms and so forth. So it is a little hard to get a bottom line total number because you are mixing and matching different types of support.
>> Okay, let's just but if you can give me when you give the the details if you can give me a breakdown of what type of support as you define it so I can understand how you define it. >> uh what those industrial facilities actually are.
>> Yep.
>> And the amount of commonwealth funding that's been applied to each of those as you've defined them.
>> Yep. We can do that. >> Thank you. I might start with WA and then hand to Miss Talbbert for the other facilities. Um so with uh the WEA still works the assistance package uh for that facility is from the Commonwealth is $1.5 billion assistance for the transformation uh at the facility. Now that is made up of 500 million in the Green Iron Investment Fund. That's a grant and a billion dollars of financing. uh the exact nature of that financing we are negotiating with parties at the moment uh and I can't really go into much more detail on that because they are um you know very sensitive uh commercial uh negotiations as we speak. Uh South Australia is putting $400 million approximately in a grant to um also help the transformation. uh and that is uh so that brings the total uh government's support uh joint government support to $ 1.9 billion but as I said 900 of that is a grant and a billion of that is financing uh on top of that we've also uh currently committed jointly with the with the South Australian government uh just over a billion dollars to support the administration process uh which is supporting the uh underlying sale process and then the transformation to to the um the you know the um the lower emission sort of facility in in Walla.
>> Right. So you've just given me the one.
>> Yes. So I'll hand to Miss Talbert [clears throat] to talk to the range of others.
>> So could I just clarify on those the the different elements that you spoke of there? What programs are they specifically coming out of? Is there any from National Reconstruction Fund? Is it from another bucket somewhere? What are
they coming? So uh the the 500 million uh green eye investment fund comes out of the green eye investment fund program. The um the billion dollars in administration funding or our half of that sorry I should say senator comes from a comes out of the standing appropriation under the uh federal financial assistance act. So administered by Treasury. Uh and then the the billion dollars financing where that comes from will be determined by where we end up landing in the negotiations and from there we'll work out what the best source is from the range of Commonwealth um uh facilities
>> I think Mr. Talbert had some
>> Uh good afternoon. Luis Talbert, acting division head of the materials and metals investment division. So the most recent announcement of a bespoke industrial assistance package was for the Bell Bay aluminium smelter in Georgetown, Tasmania. Uh that package was announced on the 1st of October this year and that is up to $200 million in total over 5 years from the 1st of January 2027. Uh the Commonwealth's contribution to that is $und00 million. Um and as Mr. business loan has has highlighted each of the packages has different sorts of elements to it. Um and uh so so that is not necessarily the case that that will end up being $100 million. It is an up to amount. Uh the other one that I think that has estimates is the Tomago aluminium smelter um which was announced on the 13th of August 2026. It's possible that we had estimates after that. I can't quite remember. Um and that is um a $2.5 billion assistance package over 10 years from the 1st of January 2029. Uh and the Commonwealth contribution there is uh 1.2 uh what is half of that 1.5 billion and that is in um and again there's a range of different mechanisms involved in that assistance package. uh meaning that it's not necessarily the case that it's going to be that exact amount of money up to that amount.
>> So are you able to also provide um the amounts that have been allocated versus the amount that have actually that actually remains outstanding.
>> Sorry, can you repeat the question? So
I'm interested to understand um how of that money that's been allocated how much remains outstanding. >> So how much is actually transferred and how much is actually outstanding and
>> so senator these these programs haven't started yet. They're future their future um that we negotiate them and they kick in down the road.
>> So that that's all allocated in the budget forward estimates. Is that right? Or how do you how do you treat that?
Uh so it will it will be reflected in in yes in the Mayifo um budget estimates. Yeah.
>> Right. Can you
>> just to just to um build on what Mr. Tbert said? So uh with Tommy go it's one January 2029 that that >> um agreement takes effect. Um and the total contribution across New South Wales and the Commonwealth government 2.5. So it's 1.25 billion in that in that announcement from the from Commonwealth and 1.25 too far from New South Wales. >> Yeah.
>> Which does mean that the um >> position advocated by [clears throat] Mr. Taylor on Monday and One Nation before that because as we've learned, One Nation advocates a position and then the Liberals and Nationals catch up um would lead to the closure of the Tomago aluminium facility in the Hana Valley. Uh that's what the that's what the consequence of the >> spending cuts announcement would be.
>> I was just seeking numbers.
>> So we're very happy to provide you with as much information as possible because it would be useful >> if you understood the consequences of
propos. Thank you. >> Um I'm interested to understand uh what criteria must be met before the comworth intervenes. Is it the same for every project or is there a framework that's set around that? How do how do you
Um so so as I said um and as as Mr. Sloan also said each each of the bespoke um industrial assistance packages is bespoke. Um so it's not necessarily the case that every package is designed or delivered in the same way. Um but they are um but they all do undergo some some very similar processes which I'm happy to run through at a general level. M um so so in essence for all of them there is um uh they're all large employers and contributors to the economies of the regions and states where they're located obviously um so all state governments are also focused on the benefits that these facilities bring to their regions and states and are also willing to invest in their futures. So they are joint investment packages with um with state governments in in in all cases um as is as the commonwealth is. So the state governments are very focused on value for money and protecting government use of funds um and and delivering the right sort of assistance package for for the particular challenges that the facilities are are in terms of our approach to uh information, due diligence and evidence to under underpin those assistance packages, we make that very clear up front to to companies. It's very non-negotiable requirement that um the engagement requires transparency in the provision of very detailed information about their company structures, their financial operations. Uh this includes things like financial models um ownership ownership structuring and legal um legal structures, debt models, production of information, securities, etc. Um and that process is facilitated usually through the use of a data room uh followed by multiple rounds of requests for information in in much the same way as many commercial transactions are approached. Uh so then we have um we then analyze that those company financials in depth. We seek information about relevant commodity and other markets. We analyze their project plans um in order to um come up with the and then we also draw of course on external expert commercial advice and validation as well as expertise right across the government to support um the department's in-house analytical capabilities. We have an exceptionally experienced and skilled team uh to to undertake that work in partnership with our uh internal um and Australian government legal advisers, their commercial law areas. Um and we basically continue seeking that information from until such time as we're satisfied that we have sufficient uh highquality advice to inform package design and government decision making. So that's the process that we generally go through.
>> Okay. Thank you. Has the department quantified the effect of the government's net zero policies on operating costs for Australian heavy
>> uh, Senator, sorry, can just can just repeat your question. I'm just thinking about whether I've got the right colleagues at the table for that
question. >> Have you done any work to quantify the effect of the government's net zero policies on operating costs for Australian heavy industry?
Uh so Senator, what um what we could do is so we've certainly we obviously work um in terms of the government's um net zero plan. We have an industry net zero plan. Um uh certainly in all of the work we do, we we are considering um the energy transition and where there's um comparative advantages and where that transition positions us. So that's part of what we've the work we've been doing with the um aluminium smelters. Um I think we can certainly talk to that. Um I I don't think within the department that we uh have done the work. Uh the qu the question you're going to I think goes to some other areas of government that do modeling across the economy. We we don't do sort of that work. We certainly do engage with our industries and sectors around um you know what they're experiencing and those sorts of things but not at the whole of economy scale that you're talking to.
>> So what about >> I think it'd be quite hard to strip that out. I mean that I think if you're referring to the types of industries that we've been talking to just now,
>> yeah,
>> there's a number of factors that go into the operating costs and feasibility of those industries. And um if it's energy cost you're talking about, that's one factor for sure. But then working that back to government policy would be incredibly difficult because we're operating in a world where those energy prices are influenced not just by government policy but by developments in the se energy sector itself. But many of the factors driving the economics and operating costs of those businesses is to do with the historical investment that's under been undertaken in those businesses. And that's one of the purposes of these these transactions and these um initiatives we've taken with the businesses is to encourage more private sector investment in modern methods of uh of production. C
>> can I give you an example, Senator? >> I think so. the the Tomagoian facility. Um the the owners of that facility were very clear with the two governments who have been engaged in this task, us and the New South Wales government. >> That that they needed two things from uh from New South Wales and from the country. >> One was a target >> uh electricity price. Do you want to
keep on blue?
>> Uh and secondly, they were very clear that that target price could not be achieved without it being new generation that was wind and solar backed by storage and gas. Um absent those two conditions being achieved, uh the owners of that facility would would relocate offshore. So it's not it's not possible to say that there's some impact of the government's approach here. uh in terms of the um in terms of the approach to emissions at that facility is a requirement of that company to lower electricity costs and coal was in fact the problem like coal generation was the problem for uh the owners of that facility because it was too expensive and too unreliable. So >> your question makes sense maybe at the kind of macro level trying to understand what the position is but it doesn't make any sense at all uh in terms of that
>> yes >> I might just do a little sort of follow up on some of that so there aren't specific criteria that you have to meet before the comwalth intervenes I'm interested in knowing how these projects come across your desk do they come across your desk and whether it be WA or whether it be Tomago or whether it be Boone because a submission comes up from the department saying hey these companies are crying out for help and they need your help and it's got to be a you know a government decision. Does it come from state governments? Does it come from the companies themselves or do you initiate them? How do how do you how do these these bailout packages um what's what's their how do they become um go from a company in trouble
to a reality? Well, there is um I mean all of the ones that we've been through uh have been the subject of uh work and uh uh led by uh the department and and the commonwealth and the state government in each jurisdiction uh all of them from well well before I was appointed uh as the minister. Um so that is they are that there there is a kind of body of work engaged
>> on the radar of the department. The department sends up a a submission to you and says hey let's talk about Tomago
let's talk about >> we are constantly engaged on all of these questions industrial sustainability of current firms and future investments. Um you know we're operating an environment where production has been concentrated in one economy that where significant challenges uh in terms of uh industrial subsidies and over capacity around the world leading consequently to underinvestment uh in capital in Australia long-term um sets of issues there and we are working our way through um uh all of those questions to defend Australia's industrial capability so that we've got, you know, the industrial capacity that we need for the future.
>> When you've got a company that's clearly in trouble, that is under threat, do you first uh look at proposals or ideas about how the government can alleviate some of the pressure on those companies reducing its compliance obligations or giving it a holiday from a safeguard mechanism or something like that. So removing some of the the um the the the red tape side of of government before you start handing out taxpayer dollars for a bailout.
>> Can I just maybe offer a short response and then get the officials to kind of >> the the the sc the scale like let's stick with the tomago example because it's I think you know it's the most opposite kind of example. um underinvestment in the electricity system. Um, of course I point to the the period between uh in in the nine years before we took office, but all of the all of the kind of underinvestment that's happened in electricity and transmission following electricity privatization in some of these jurisdictions has meant that there is a a um very high cost associated with coal fired power and generation that is in aluminium Um, of course we of course every government must attend to uh the regulatory system >> uh and all of those kind of costs. I wouldn't dismiss that responsibility for a second. But but aluminium is essentially solid electricity. It's got two inputs. Um electricity labor is like a distant you know a distant proposition there. Those are the big costs. It is essentially a function of energy. Uh and coal fire power was not just a little bit too expensive. >> It was far too expensive. uh and and so coming to grips with that competitive reality uh requires you know a huge body of work to get to deliver the investment in New South Wales in relation to Tomago in Queensland in relation to uh boy public and private uh to remedy that situation. Now the situation in different industrial facilities of course is driven by the exigencies of their own competitive position or their own inputs >> but but that analysis and that work >> is what has driven that approach. Now there there is an alternative approach. Mr. Taylor when confronted with these issues in 2012 >> can I ask the question was was a consultant for these firms and he said go to Chinaian
you're placing on these companies. And
then
rather than the compiance burden, you're to be found here by saying do you know what we'll give you a holiday from your emissions reporting for 2 years that should reduce some costs or you know another form of compliance something some other form of reporting to government I don't know what it might be maybe it's reporting maybe it's modern slavery I don't know do you say we give you um uh you know some sort of amnesty for two years from all of that costly compliance stuff so that you can focus on making sure that your business is built up. So we it actually it's not just about a bailout package. It's also about a sort of a more holistic approach. Is that something that the department and let's let the department answer. Is that something that the department considers? It's not just about handing over the money. >> There's also other levers that you can pull to help people get their businesses
back. Senator Him, I want to be respectful of the question to say firstly, of course, all of the regulatory questions, whether it's these businesses or others, uh, you know, always require attention. I I don't want to I don't want to dismiss that, but but filling out forms for WIA
close. Ministerale, but it's an example of the compiance that's imposed by government on companies that are clearly failing. >> The compiance burden here, I don't want to be disrespectful about the compliance
burden, >> but it doesn't go anywhere close to dealing with the fundamental competitive issue, >> which was that it was not possible on the open market.
>> Yeah.
>> Given given the underinvestment in the electricity system, >> I hear you for that firm. Don't you find
it strange that you can hand over a great [clears throat] wad of taxpayer dollars often, you know, borrowed >> and uh at the same time impose costs from compliance reporting on these same
companies. Oh, you have to make sure you
do your emissions reporting, scope one and scope two and or now scope three coming in as well. Oh, you have to do other compliance reporting to government to make sure that we know how many women you employ. I mean, this kind of stuff I think drives people nuts. You're borrowing money in their name to give to these companies to bail them out. And I understand why you're doing that, but then you're imposing costs at the other end.
>> Yeah.
>> What I want to know is does your department consider ways to reduce the compliance burden on these companies as well as hand out taxpayer funded government ballots.
>> Those issues are just not in the same galaxy as the real competitive issues
that are facing.
at the outset, we want to be respectful of that question and indeed whether it's treasury, uh the work that the productivity commission does, the economic roundt reforms that followed that of course we must be engaged in uh those issues that go to the compliance burden to you know eliminating tariffs to all sorts of efforts to uh lower costs and improve the competitive position uh of firms. But in the end here it is all about coal fired power and the associated generation being too expensive for that firm uh the the three owners of that facility uh and the single owner of the boy aluminium smelter and bell aluminium and and wrestling with the fundamental underlying competing question. Of course we will continue to deal with the issues that you point to.
>> Um there's always a balance. ask the
>> Sure. So, um the the shorter answer is of course we would look at those issues. >> usually I was about to say usually when you get into discussion with one of these facilities that is um foresee problems in operating you get into a very very quickly to the core issues facing the company. They're rarely the ones that you described. they're usually the more fundamental input costs of the business and the world prices often of their commodities that they're trading in. Um the types of things that often are material but they are the type things like um planning consents and so the government has made reforms on the EBVC act. Uh and at a state level I know there is also but that's usually only when you're talking about a project that is to be developed not one that is already operating. those businesses don't generally face those type of regulatory barriers. So they're not very material for them. And often the businesses that we're dealing with um are have their own global standards for that type of reporting um because they're operating in world markets where those standards are required. So the c the types of reporting and compliance measures that the government in Australia has are often consistent with those that they're meeting other markets in any case. So it's not really a very material cost for them.
>> Okay. So you haven't done any costing then or modeling of the cost of um compliance to net zero policies.
>> That's back to a previous question that that uh Senator Little asked which I as I said I think that would be an incredibly difficult exercise. We're talking about the number of factors driving the performance of these businesses. that is a uh that the impact of government policy would be almost impossible to separate uh from the where those price and energy prices would naturally be given the developments in industry and international markets
>> and and and I I mean I wouldn't you say the again back to the Tomago the policy effort of the government to fix the electricity system is the answer to Tomago's problem not the problem that that That is 5,000 jobs that are being delivered because we are investing in wind and solar and transmission. If we if we didn't have the approach of fixing the electricity system and we were we were stuck with a a a group of kind of declining reliability coal fire power that facility would close. That is 5,000 Hunter Valley jobs >> that whether you use the projorative net zero or whatever.
>> Yeah.
>> Right. that that that that they are they are jobs that are saved because of the government's efforts here. And and if we continued with the Morrison approach, >> it would be gone already.
>> So much transcript time.
>> It would be gone already. >> Like what? It's it's time for you guys to listen on this question and deal with real businesses, not social media.
>> Minister, we Thank you. Um we
>> Senator Colbeck has some questions.
Okay, I'm going to All right, I'll go to Senator >> I'm going to go Sorry, I'm going to go to Senator Colbeck and then I'll come to
$2 billion green aluminium production credit program was announced, it was announced that all four of Australia's smelters would gain access to the program to go to which smelters did gain access to the program? >> Yeah.
>> Um, Senator, I might start and I'll hand to my colleague. Um, and actually I might just go back one step. So when my colleague M. Talbert talked about the process we take with particular um, negotiations all of that these sectors including aluminium is identified as a priority sector under the future made in Australia piece. So just to kind of put on the record there was a And so that's how no it was just in response to a previous piece. So the green ali production credit we consulted with industry on the initial design of the program and that objective was around green aluminium production in Australia. Um and and what we have done with that is around kind of ensuring that it is fit for purpose and meets the policy objective. And so, um, we have taken a a revised approach to that program and that's what has underpinned some of the tailored support that we've provided. I'll just check with colleagues around if there's anything further they wanted to add to that or just step it through.
Um yes, I would just probably add that following the consultation process on that program, it was the outcome of that consultation process was that there it did indicate that changes were required to the government's approach um for that um and that smelters increasingly had unique needs due to different operating environments across states that required more tailored support and hence um how how I have described what what has actually occurred there for So, so I
come back to my question. >> Which of the four smelters will receive a share of the $2 billion green
>> So, Senator, the program as we consulted on um uh in response to that consultation was changed and so there isn't um so it's not it's not in the form that we consulted on. It's it's it's not that the program the program that we consulted on we made adjustments to that following the consultation and so that has underpinned um the intent of that and securing green aluminium has underpinned the interventions that have been made in the three smelters.
>> So there is no green aluminium credit >> complain about it. the the the government announced >> a a $2 billion green aluminium production credit scheme >> in relation to the Boone smelter >> uh the arrangement that we reached but with the Chrysafouli government jointly investing $2 billion in that facility. Um under that arrangement and uh officials can go to kind of details of that arrangement. uh under that arrangement um uh the smelter would no longer receive the benefit of the scheme. So it was set against that billion dollar set. >> That's right. And so in relation to Tomago a similar thing like you you don't get the benefit of the investment and also the benefit of the green aluminium production credit uh in relation to all of these uh facilities. say will be accounted for in in budget in the normal way. But the green aluminium production credit scheme its objectives have been achieved. The objective of the scheme
>> so so nobody none of the force smelters received funding from the green aluminium credit scheme. Yeah, because
it's a scheme that would would have operated between give me the years. Let's pick worth. >> We'll come back to you about the the the point in the the decade over which it would have operated.
>> Yeah. So so so no and you announced the green aluminium credit scheme >> and in the end >> and four smelters that were promised support through the green aluminium credit scheme received support through the green
>> they've received a larger support
package. No, no, no. I'm just trying to understand the process. So, so, so green aluminium credit screen production credit scheme no longer exists.
>> Well, its objectives have been delivered.
>> No, I just want to know whether it still
exists. the the the support pack it will be accounted for in the normal way but the support packages
>> so the green so
>> in all three examples uh in all three examples uh the objectives of the scheme uh have been delivered they've just been delivered in a different kind of way and
we're not and we're not doubling up production credit scheme was effectively a dud because it didn't work for any of the smelters that it was promised to give support to >> well it was done through another mechanism
>> they they've all moved to wind and solar backed by storage and gas except in Tasmania where of course you have a long-standing uh green electricity scheme
>> and the fundamental problem with the green aluminium production credit scheme in terms of Tasmania was a thing called additionality which meant it was impossible to qualify even though you promised that it would.
>> So we've we've we have uh ended up with
>> had to design a different arrangement.
We've ended up with an answer here not just in relation to Tasmania but in relation to the Tomago and the Tomago and Bo smelters where the objective for the country has been achieved. We've put aluminium back on a competitive footing >> uh and dealt with the fundamental underlying competitive issue. The answer is a bit different in Tasmania because the kind of
uh >> because we already had renewable.
>> Yes. But also, Senator, because the the competitive issues that surround that facility are different >> are different, right? You know, it's it's in a really important part of
Tasmania. But despite it being promised as getting support through the green analium production credit scheme, it was always going to be impossible because of the fact of requiring additionality which was not available because we were already effectively using renewable energy.
>> We've done more. We've done it differently and we've done it in partnership with the Tasmanian government and we've got the right
result. >> I'm not disputing that. I called on you to do something and you've done something. So I can't complain about
that side of it. And just to answer the question the minister asked before our consultation paper on the green aluminium production credit invisit operating from 1 July 2028 to 30th of June 2044. So that was what we consulted on was that scheme period from 28 to 44.
>> Yeah. But I mean effectively now the scheme is a shot duck.
>> So so so I should say both of the >> smelters receive production linked support for green aluminium. Right. So both the mainland facilities
>> so four smelters which ones are we
receive so the Tomago and Boone smelters receive production linked support uh uh totaling $2.25 billion from the Um the Georgetown facility BBA as our only currently existing green smelter as you'd say is has already
>> 75 years
>> has already uh for 75 years on Taz Hydro has got a bespoke package that that we have delivered jointly with Tasmania in partnership with Premier Rockcliffe uh to secure the future of that smelter too. So production linked for the for the two mainland facilities and a bespoke package for um Bell Bay Aluminium. Um after I should say like a significant amount of work done in the leadup to the delivery of that package to get the most competitive electricity position possible uh being worked through with TZ Hydro and the Tasmanian government. If I if I
acknowledge the work that >> so the $2 billion that was allocated. Yeah. So the $2 billion allocated to the where is that now?
>> Well, that'll be accounted for uh in the normal way. You'll see that in the budget papers
>> in my effort.
>> So $2.25 25 billion been allocated in production credits to those two facilities and a bespoke package um $100 million from each government to deliver uh on Belay aluminium and
another bespoke package for Tomago. So, when I said the two there's four smelters we're talking about support for
>> well um there's a there's another smelter that has a long-term power purchasing agreement that goes as far as the I can see um Senator and um uh you know I want to see more investment in the electricity network and I expect the position to be more competitive by the time we reach that uh set of issues but it's a long way away.
So in terms of Tomigo, can you tell us exactly what the 2.5 is going to billion's going to be spent on?
>> so uh the the the 1.225 billion each from um both governments will be supporting the long-term future of Tomago um and those jobs. Um that will be it will be um also supplemented by investment from the company of at least $1.1 billion in the plant. Uh Snowy Hydro Limited will have a role in delivering the renewable energy solution. Um and the arrangement there also ensures revenue comes back to the federal government when aluminium prices are high. Uh so I can't do I can't give you the exact breakdown of all the different uh parts um of that but there is those contributions will be to underpin all of those elements.
>> Sorry could you say that last piece again? I'm really having trouble hearing
>> Those contri that contribution will be underpinning all of those elements of the solution that I just mentioned. >> Okay.
>> I'm going to have to rotate the calls.
>> two questions >> so the support for tomago is not mentioned in the budget in the 2627 bud industry portfolio budget statement um where does where is that funding coming from
>> so
>> why wasn't it mentioned in the budget
>> so um as I said earlier in response to a different question I think that funding is expected to be allocated into the budget through the myo process uh in December.
>> So will it be new funding or rep prioritized funding?
>> Well, so perhaps just going back to the question from before the funding allocated for the this was um this was um provided in response to a question on uh notice from last estimates from Senator Little. Um the funding allocated for the green aluminium production credit is being used to benefit the decarbonization of the aluminium industry and support the production of lowcarbon aluminium but in addition in partnership with state and territory governments and industry also providing