“There seems to be some concession to the need for the CPRS to operate as a tax, but this would only be for the first year, which doesn’t address the problems associated with long-term contracts and the inability of many companies to pass through the extra costs,” APIA chief executive Cheryl Cartwright said.

“Also, the focus will remain on assistance to industries other than the domestic gas industry, with the LNG export industry receiving – quite reasonably – assistance because of unfair international competition with companies unaffected by an emissions trading scheme (ETS), and with alternative domestic energy sources to gas, such as coal receiving government assistance to adjust to a carbon-constrained climate.

“And, of course, the renewable energy industry will continue to receive a boost in order to encourage investment in that industry, while the natural gas industry – with gas required as a back-up fuel for renewable energies – is not assisted.”

On the matter of long-term contracts, Ms Cartwright said that many energy industry companies, particularly gas transmission companies, operate under long term contracts and many of these contracts have not made allowances for the introduction of an ETS.

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“Frankly, if the costs associated with the CPRS cannot be passed through, the whole system is undermined because the true cost of emissions would not be felt by the eventual user. Also, the system as it stands would introduce a competitive disadvantage to companies with long-term contracts.

“APIA has held many discussions with Government officials in regard to this issue and, at no time, has there been any demonstrated understanding of commercial reality,” said Ms Cartwright.