A deal to end the lengthy stand-off over Australia’s renewable energy target has hit a dramatic late hitch after Labor accused the Coalition of trying to include the burning of wood waste as a renewable energy source.



The federal government and the opposition have held on-off talks for several months over a deal to cut the renewable energy target (RET), which mandates that 41,000 gigawatt hours of Australia’s energy must come from renewable sources such as solar and wind by 2020.

Talks between Greg Hunt, the environment minister, Ian Macfarlane, the industry minister, and Mark Butler, Labor’s environment spokesman, in Melbourne on Friday agreed that the RET be cut to 33,000GWh, with exemptions for energy-intensive industries such as aluminium.

However, Labor has objected to part of the deal after claiming that the government introduced a last-minute amendment that the burning of wood waste be included in Australia’s renewables target.

The burning of native wood, or other biomass, for energy is viewed as environmentally damaging by the Greens and some conservation groups.

Butler said the inclusion of wood waste burning was a “last-minute trick” that Labor wouldn’t support.

“We are very disappointed that Tony Abbott has decided at the last minute to throw a red herring on the table,” he said.

“There is no case for introducing native wood waste burning into the renewable industry and I want to be very clear that Labor will not be accepting this proposal from the government.”

Butler said Labor would vote for the 33,000GWh target for the large-scale renewable energy target, with no change to the rooftop solar scheme for households, but that it wouldn’t support the burning of wood waste and that “the government will have to decide whether that’s a dealbreaker”.

It is understood that Labor will attempt to remove the wood waste component of the deal in the Senate, with the government attempting to win crossbench senators over to the idea. One, Ricky Muir, has previously indicated his support for wood waste to be included.

Butler said a 33,000GWh deal would mean a “significant achievement” of 25% of Australia’s energy coming from renewable sources by 2020. Labor has pledged to restore the target should it win power next year.

The Coalition initially said it wanted to reduce the RET due to concerns that it pushed up electricity prices. More recently, it has said the renewables industry would be unable to achieve the 41,000GWh target.

Uncertainty over the target has caused investment in large-scale renewable energy in Australia to slump by 90% over the past year, according to Bloomberg New Energy Finance.

Just one large-scale renewables project, worth $6.6m, has been financed this year, due to uncertainty caused by political negotiations over the RET’s future. More than 2,300 jobs in the renewable energy sector have been lost in the past two years, Australian Bureau of Statistics figures show.

John Grimes, chief executive of the Australian Solar Council, said the agreement between the Coalition and Labor is a “deal that happens when you force the industry and the opposition into saying ‘do this deal or die’.”

Leigh Ewbank, Friends of the Earth’s renewable energy spokesman, said: “Today, the Abbott government has agreed to cut the renewable energy target by 20%. This means less clean energy, less jobs, and less investment for Australia. This cut to the RET means 3,680 less jobs by 2020.”

MacFarlane said the issue of wood waste burning was one that the Coalition has supported “since day one” and that it will be included in the main RET legislation.

“We’re confident that we can get biomass through the senate using the cross bench,” he said. “For people like senator Ricky Muir, this is a major issue and we’ve also had that expressed by other Senators. So we’re keen to continue to progress the issue. We’ve told Mark Butler that we will continue to progress the issue.



“We will be relying on the Labor party’s support to carry the bulk of the legislative amendments which will include the 33,000GWh target, but we would expect that the cross-bench will support us on wood waste.”