Exclusive: Deputy PM tells Guardian the Nationals are waiting on cabinet: ‘You tell me where the line is, and I’ll tell you what our position is’

This article is more than 3 years old

This article is more than 3 years old

The deputy prime minister Barnaby Joyce says he’s prepared to support a clean energy target such as the one recommended by the chief scientist, Alan Finkel, if the Liberals agree to set a threshold allowing high-efficiency coal in the mix.

Joyce told Guardian Australia on Thursday he was prepared to take a positive recommendation to the Nationals party room on the clean energy target if it was set at a level at which coal was eligible for certificates.

But he said the Nationals were not able to take a formal decision on the central recommendation of the Finkel review until cabinet has resolved where to set the threshold.

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“You tell me where the line is, and I’ll tell you what our position is,” Joyce said on Thursday.

The position ultimately taken by the Nationals is absolutely critical to whether the government proceeds with the central Finkel recommendation, or dumps it.

The Turnbull government has reserved its position on the clean energy target, to the chagrin of state governments, some of whom are now threatening to go it alone – because of a rolling internal argument over the Finkel review.

The unresolved brawl means the federal energy minister, Josh Frydenberg, has to go to Friday’s meeting of energy ministers without a formal position on the clean energy target.

The Labor states are now signalling they will seek advice from energy regulators about how to proceed with the Finkel recommendation in the absence of leadership from Canberra.

Asked on Thursday whether he was flat-out opposed to the clean energy target, as some Liberals currently are, or whether he would support it if coal was in the mix, Joyce indicated he was in the latter camp.

He said he’d support a clean energy target provided it didn’t impose “a Luddite approach, where a particular section of industry is evil”.

“It all depends where your line is. It’s who get the credits. That’s what it’s all going to be about,” the deputy prime minister said.

He conceded he would need to work hard to get the Nationals over the line. “I’ll have to work very hard with my party. I’ll give my party the right of the discussion. And no doubt there will be further debate”.

Joyce said he was also happy to see a debate about nuclear energy “if we genuinely want zero emissions and baseload [power]”, or about large-scale hydro, which would require “big new dams along the coast”.

During Thursday’s interview, the deputy prime minister also clarified the broader demands of the National party on coal.

Both Joyce and the resources minister, Matt Canavan, have been publicly championing new coal-fired power stations for months.

But Liberal frontbencher Craig Laundy said this week the government was not interested in building new assets, it was interested in retrofitting existing plants.

Frydenberg has signalled the government will support coal-fired power if the market supports it.

“What I want is this,” Joyce said. “As coal-fired power stations go out of circulation [they should be] replaced by better coal-fired power stations, or there should be substantial refurbishment of the existing ones so they have a longer tenure”.

Joyce said any new investments in coal would have to be in compliance with Australia’s international emissions reduction obligations under the Paris agreement.

Pressed about the market’s profound lack of interest in funding new coal, Joyce said the government had been approached by people in the energy industry who would pursue developments if there was long-term policy certainty.

Asked to name one, Joyce nominated the power entrepreneur Trevor St Baker, from ERM Business Energy.

Joyce said St Baker had expressed interest to the government in retrofitting the now-defunct Hazelwood plant in Victoria.

“There are others,” the deputy prime minister said. “What we don’t want is the next government coming in and making [coal-fired power] illegal and imposing a 60% renewables target. That would stuff us up”.

Joyce said the market was currently showing little public interest in new coal development or coal refurbishment “because of policy – subsidy, that is basically it”.

If coal was also eligible for government support, like renewables, then there would be more market interest, he said.

Joyce said bipartisanship was also important. He said if Labor offered public support for coal-fired power into the future, that would send a signal about certainty. Proponents would “build big new coal-fired power stations very, very quickly”.

Labor has signalled it won’t support a clean energy target if the threshold is set high enough to put coal in the mix.

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The Finkel review modelled a clean energy target threshold of 0.6 tonnes of CO2 per megawatt hour, which would be too low to see “clean” coal given incentives.

Coal would need a threshold of somewhere between 0.7 and 0.85 – which shadow energy minister Mark Butler has said is “unambiguously too high to be properly called a clean energy target”.

Joyce said he was aware that electricity generated by high-efficiency coal plants wasn’t cheap but his principle concern was to secure sufficient baseload power when existing dirty coal plants, such as Liddell and Vales Point, exited the market over the next few years.

“We don’t want to get sucked up in a myth that you don’t need baseload power – you do,” he said.

“The first blackout in Sydney is where this argument gets lost.”

Joyce said he was a supporter of the Paris agreement, and he said Australia’s energy policy needed to comply with commitments we had made in Paris.

But he added: “As you know, I have to go and sell this policy to Carroll [a parish in his constituency] and to people in Woolbrook, and these people are poor, and they are not going to give a flying shit about my international agreements.”

He said if government spoke over the heads of ordinary people, it would have absolutely no chance of winning the energy debate.