A last minute deal has been struck between Labor and the Greens to prevent a landmark manufacturing fund being used to pay for fossil fuels.
The Greens announced they would support the Albanese government’s National Reconstruction Fund shortly before the legislation to set up the $15bn co-investment vehicle went to a vote in the House of Representatives on Thursday morning.
The Bill passed the lower house after about two hours of debate and will now go to the Senate, where the Greens hold the balance of power.
The left wing party said in a statement the government had agreed to amend the Bill to prevent future governments from using the fund to invest in fossil fuel extraction, gas pipelines or logging native forests.
Their amendments create a class of ‘prohibited investments’ within the legislation that would explicitly ban the fund from financing these projects.
Additionally, the independent board that would govern the fund would have to ensure its decisions align with legislated climate targets and any future updated commitment Australia makes under the Paris Agreement treaty on climate change.
Greens leader Adam Bandt has secured environmental amendments on the National Reconstruction Fund Bill. Picture: NCA NewsWire / Gary Ramage
The legislation is expected to pass the lower house easily when MPs vote on it later on Thursday morning, even without the Greens’ support, because Labor holds most of the seats in the chamber.
But it will be a different story in the upper house, where the government doesn’t hold a majority and needs to secure the backing of The Greens and at least two crossbenchers in order to pass any legislation the Coalition doesn’t support.
The Greens have said they will also support the National Reconstruction Fund in the Senate “subject to consideration of government and other amendments”.
Modelled on the Clean Energy Finance Corporation, the proposed fund would co-invest across seven priority areas including renewables, medical science, transport and defence capabilities.
Prime Minister Anthony Albanese has said gas will play a role in the energy transition. Picture: NCA Newswire / Gaye Gerard
The Greens last month warned the Albanese government not to take their support for granted after teaming up with the Coalition to scupper Labor’s first batch of proposed superannuation regulations in the upper house.
The government is facing another battle on fossil fuels on its proposed changes to the safeguard mechanism, one of its key climate policies on its legislated mission to reduce greenhouse gas emissions by 43 per cent on 2005 levels by 2030.
Labor wants to get the safeguard mechanism legislation — which has the backing of big business but not the Coalition — through parliament before the end of March.
The proposed updates to the Coalition-era cap and trade scheme would require Australia’s 215 biggest polluters to reduce their emissions by nearly 5 per cent a year including through the use of carbon credits to “offset” emissions.
The Greens and independent senator David Pocock, one of the crossbenchers who the government needs to pass legislation in the upper house, have been calling for a ban on all new gas and coal projects in exchange for their support on the bill.
However, Anthony Albanese earlier this week said gas would still play a role in the clean energy transition.
The Prime Minister said the Greens’ rhetoric on a ban on gas “doesn’t stack up” and suggested hampering the safeguard mechanism in parliament would be detrimental to the fight against climate change.
“If it has a negative impact, then you’re not actually helping the transition of what you say your objectives are,” Mr Albanese told a business summit hosted by the Australian Financial Review.
“(Businesses) want to move towards renewables and to power them but they need the firming capacity of gas.”
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