Date: 29-Apr-09

Country: AUSTRALIA

Author: Rob Taylor

CANBERRA - Energy-intensive industries could be offered exemptions by Australia's government on its 20 percent renewable energy target as financial tumult saps support for its climate change policies, a report said on Wednesday.

Prime Minister Kevin Rudd would ask state leaders to sign off on further concessions for big electricity users including pulp and paper, steel, cement and silicon industries at a meeting on Thursday in Hobart, the Australian newspaper said in an unsourced report.

The centre-left government has already foreshadowed an exemption for aluminium, which consumes about 15 percent of electricity nationally.

Major industries had complained about the "double whammy" from a planned carbon emissions trading system, set to begin next year, and the new renewable energy target, which requires electricity retailers and large users to source 20 percent of their energy needs from renewable sources by 2020.

Broader renewable exemptions could soften industry resistance to the emissions trading law when it faces an obstructive upper house senate dominated by government opponents and swing-vote independents next month, the paper said.

Bluescope Steel, Australia's top steelmaker, on Tuesday attacked the emissions trading plan, branding it as a A$2.5 ($1.76) billion economic "de-stimulus" package as Australia teeters on the edge of recession and thousands of job losses.

"It is very disappointing that the government still appears stubbornly committed to its 2010 carbon pollution reduction scheme deadline, despite its obvious and serious flaws," Bluescope chairman and Reserve Bank of Australia board member Graham Kraehe told a meeting of company directors in Brisbane.

Climate Change Minister Penny Wong, attending U.S. President Barack Obama's climate meeting in Washington, said clear domestic laws were needed to ensure the success of the U.N.-backed talks in Copenhagen in December on a post-Kyoto climate pact in 2012.

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