Steel makers will reportedly gain the biggest advantage under the Federal Government’s carbon tax in the short term.
Under the Government’s new $1.1 billion of new manufacturing industry assistance funding announced to soften the impact of its carbon tax, steelmakers including Bluescope Steel, will be able to secure a share of the proposed $300 million steel industry assistance plan and the $800 million clean technology fund for manufacturers.
The $300 million in steel industry assistance payments would be shared between two steel makers; BlueScope which will receive 60 per cent of the payment and South Australia-based OneSteel.
The move is expected to ensure that costs endured by steelmaker will remain minimal over the first four years of the carbon scheme. The subsidy will be subject to Productivity Commission review.
According to the plan, Bluescope Steel will be eligible for 94.5% carbon pollution permits for free and about $45 million a year, to help cover its remaining carbon tax costs making it the biggest beneficiary under the new scheme, the Illawarra Mercury reported.
According to Australian Workers Union, the steelmaker could receive $40 million a year of assistance under the Government’s new announced plan.
The package also includes $1.3 billion to support jobs in the coal industry, the establishment of a $10 billion Clean Energy Finance Corporation and $3 billion to support new low emission technologies reach the market.
Bluescope Steel managing director Paul O’Malley said the Government’s package responded to the potential costs the steelmakers could incur of the next four years as a result of the carbon tax.
O’Malley said Bluescope Steel’s material cost has been “materially mitigated” as a result the package.
While it seems the steel industry has little to say about any potential damaging impact the tax could have in the immediate future, the sector is cautious that the gradual rise in carbon price could increase pressure on business and consumers to adapt to a carbon pricing world.
Watching ever so closely of will be countries including India and China, who are expected to dominate the global steel market in the coming years.