Holden Response to Government Carbon Pricing Scheme

VICTORIA, AUSTRALIA – July 11, 2011: Holden notes the Government’s Carbon Pricing announcement today which sets an initial carbon price of $23 a tonne.

Holden is currently assessing the impact of the scheme on its Australian manufacturing operations, however the Federal Chamber of Automotive Industries currently estimates the impact on the Australian local automotive industry as a whole will be at least $30 million a year1.

It should be noted that while Holden designs, engineers and manufactures vehicles in Australia for the domestic and overseas market, it does not fit the Government’s criteria as an ‘emissions-intensive, trade-exposed industry’ (EITE).

Consequently, Holden and many other major manufacturers will only be potentially eligible to apply for compensation to partly off-set the impact on Australian manufacturing under the Clean Technology Program.

Specifically Holden believes it will be able to apply for co-investment funding for its R&D and manufacturing initiatives to help reduce emissions and improve vehicle efficiency through the following:

Clean Technology Investment Program Investment Program,

Clean Technologies Food and Foundries Investment Program and

Clean Technology Innovation Program.

Holden supports the need to reduce its carbon footprint, and that of manufacturing in general, and believes these compensation measures are a step in the right direction.

However, it is important to understand how much competition there will be for funding from other manufacturing sectors. It is also critical to understand the extent to which the compensation package will address the competitive disadvantage imposed on local manufacturers who compete in a market where 85 per cent of new vehicle sales are imported models.

Over the coming days we will be reviewing the details of the scheme to better understand how the package will be implemented. In particular Holden will be discussing with the Government the issues affecting Australia’s ability to compete globally for foreign investment.

For more details on the impact of the scheme on the Australian car industry, please contact the Federal Chamber of Automotive Industries.