UPDATE 1-Australian renewable laws set to pass parliament

* Poll shows solid support for govt’s carbon reduction plans

* Steelmaker warns of potential cost to industry

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CANBERRA, Aug 17 (Reuters) - Australian laws to require 20 percent of energy to come from renewable sources by 2020 are set to pass through parliament by late Thursday after government talks with opposition lawmakers on the bill on Monday.

The clean energy industry expects the laws will unlock $22 billion of investment in solar, wind and geothermal energy, after the government backed down on linking compensation for industry to its emissions trading laws, which were rejected on Aug. 13.

“The government is determined to do all that we are able to get this legislation through,” Climate Change Minister Penny Wong told Australia radio, adding she would negotiate with the opposition and Greens to make sure the laws were endorsed.

The renewable energy laws target 45,000 gigawatt hours of clean energy by 2020, or 20 percent of Australian energy. Latest government data said renewable energy accounted for about 5 percent of Australia’s total energy consumption.

Wong has announced interim compensation from January 2010 for electricity intensive exporting industries, such as aluminium smelters Alcoa Inc. AA.N, Alumina Ltd AWC.AX and Hydro Aluminium NHY.OL.

The interim compensation will cover the industries until carbon emissions trade laws, and associated compensation schemes, are passed through parliament.

Wong said she expected aluminium smelters, silicon producers and newsprint manufacturers, would be eligible for compensation, which kicks in for activities which use 3,000 megawatt hours of electricity for every A$1 million ($826,000) of revenue.

Without the compensation, the Australian Aluminium Council, which represents the country’s six aluminium smelters, said the industry would face extra costs of about A$700 million over the next 10 years.


Meanwhile, a new poll found most Australians want the government to push ahead with its carbon emissions trading scheme, even if this means calling a snap election to overcome parliamentary opposition to it.

Prime Minister Kevin Rudd could have the option of calling a snap election if parliament’s upper house Senate rejects the laws a second time from November 16. [ID:nSYD16743].

A Nielsen poll in Fairfax newspapers found 55 percent backed Rudd’s plan to push ahead with carbon trade laws, with only 29 percent preferring the laws be delayed until after December’s global climate talks in Copenhagen. The poll showed Rudd’s Labor party still held an election-winning 56-44 percent lead over the conservative opposition, though Labor’s support in the two-party vote that decides elections edged 2 points lower from June.

Rudd has said he does not want to call an early election, but some political experts say he will never rule that option out, especially with the opposition trailing badly in opinion polls.

The opposition's campaign against the government's scheme received a boost on Monday when Australia's top steel-maker, BlueScope Steel BSL.AX, said the government's plan would cost the firm up to $1.16 billion and put the entire local steel industry at risk.

“It would severely damage our competitiveness, putting domestic investment, Australian jobs and the Australian steel industry at high risk,” it said in its annual results statement.

U.S. oil major ExxonMobil XOM.N also called on the Australian government to scrap the carbon trade plan and consider a carbon tax regime as an alternative.

“A carbon tax is more transparent to consumers, will achieve greater environmental benefits and is more difficult to manipulate than a cap and trade programme,” said ExxonMobil Australia’s chairman, John Dashwood.

For other stories on Australia’s emissions trade and climate debate, click on: [ID:nSYD240684].


Additional Reporting by Rob Taylor; Editing by Sugita Katyal