It returned to the lower house for approval of the final bill and passed by 89 to 50 votes with Labor,the Greens and most independents supporting it. The Coalition and Bob Katter voted against it,but in a sign of Liberal dissent,Tasmanian Liberal MP Bridget Archer abstained.
Under the mechanism,most polluting industries including fossil fuel producers must cut their emissions by about 5 per cent a year until the end of the decade,but manufacturers do not have to do as much heavy lifting and are only required to cut theirs by 1 per cent a year.
Manufacturing Australia chief executive Ben Eade said forcing manufacturers to cut 4.9 per cent a year amid competition with imports from countries that have less onerous emission regulations would have put local manufacturing plants at risk of closure in coming years.
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He said the scheme’s design created a level playing field that would prevent manufacturers from having to pass on significant cost increases to consumers for goods such as steel,cement,aluminium and bricks,which at present require fossil fuels to produce.
Carbon market analyst Reputex released an analysis of the safeguard mechanism in February focusing on how many carbon credits companies would probably need to buy to comply with the scheme,which will force big polluters to reduce their carbon footprint by a cumulative 28.5 per cent,or 205 million tonnes by the end of the decade.
They can either reduce real-world emissions by adopting new,cleaner technology run on renewable energy to replace polluting systems that run on fossil fuels,or they can buy carbon credits,generated by carbon farming companies,to offset their emissions.