Australia’s resources minister has proposed setting up a government-run A$250 billion ($180 billion) lending facility for the country’s coal industry in return for supporting a net zero carbon emissions target for 2050, he said on Thursday.
Resources minister Keith Pitt, a member of the junior coalition partner National Party, told the Australian Financial Review his idea was for the government to be the “lender of last resort” to the mining sector as banks and insurers are increasingly unwilling to fund and underwrite the industry.
Prime Minister Scott Morrison has come under increasing pressure to adopt a zero emissions target, but has been stymied by opposition from the party’s junior partner. Pitt’s proposal is a first sign of what that support might cost.
Morrison said on Thursday he will advise his government’s position on cutting emission before he goes to the COP26 conference in Glasgow, but it’s not clear he will attend the global climate meeting. Attendees have been asked to bring ambitious emissions reduction targets.
The loan facility proposal was not a policy of the National Party, which represents rural Australians for whom jobs in coal producing regions are a major concern, but it was up for discussion, Nationals leader Barnaby Joyce told ABC Radio.
“No matter what happens, we need to find a way to fund the resources sector and provide insurance,” Pitt told the Australian Financial Review.
Pitt also said the agriculture and resources sector should be excluded from any sacrifice in terms of reaching net zero, according to the AFR report on Thursday.
“If we want to look after 300,000 jobs, provide power to 70% of homes, the Australian government will have to become the lender of last resort,” he said, according to the paper.
Australia’s coal industry is suffering from dwindling access to finance and insurance, raising the costs of doing business and threatening the longevity of an industry that accounts for the country’s second-most-valuable exports, submissions to a parliamentary inquiry showed in May.
Pitt said last month coal will be a major contributor to Australia’s economy well beyond 2030 given growth in global demand, after a United Nations envoy called on the country to phase out the fossil fuel.