Australia’s Carbon Leakage review

Calix commends the Australian Government on its revised carbon emissions Safeguard Mechanism, its support for investment in decarbonisation technologies and its consideration of measures to prevent carbon leakage, including a carbon border adjustment mechanism (CBAM).

A price on carbon provides strong incentives for emitters to decarbonise and importantly, a stable base from which investment decisions on decarbonisation strategies and technologies can be made. Collectively, these policies provide strong incentives and support for Australia’s largest emitters to both reduce emissions on a pathway to net zero by 2050 and maintain their competitiveness in a decarbonising global economy.

The competitiveness of many of Australia’s most economically important industries, as emissions-intensive exporters, is exposed to international competitive pressures resulting from tightening emissions reduction standards.

Calix believes an Australian CBAM can be an important tool to prevent carbon leakage and the movement of carbon intensive economic activity offshore. It can also be an effective mechanism to increase the competitiveness of exports into major economic blocks with similar policy frameworks, including the European Union.

Together, the Safeguard Mechanism and an Australian CBAM can protect Australian producers by placing foreign imports on a level playing field, and act as a catalyst to develop significant competitive advantage in low carbon products.

Please find a copy of Calix’s submission at the link below.

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