AIRAH warns of carbon tax consequences

AUSTRALIA: THE Australian government has been warned that the impending imposition of a carbon tax, pushing refrigerant prices up by around 300-500%, will have a substantial impact on small businesses, jeopardises safety and risks creating a black market.

The concerns were expressed in a communique to the Australian government by the Australian Institute of Refrigeration Airconditioning and Heating (AIRAH) over its carbon-equivalent levy on refrigerants which comes into force on July 1 as part of the Australian Government's Clean Energy Future legislative package.

"The carbon-equivalent levy on refrigerant gases is expected to have a considerable impact on the hvacr industry and the many businesses it serves and supports," says AIRAH ceo Phil Wilkinson. "Our communiqué to government outlines the issues and proposes urgent actions to avoid unwanted impacts from the legislative package's introduction."

"Any industry that was forced to absorb an overnight price increase greater than 300% would be severely strained," Wilkinson says. "The rapid inflation in refrigerant gas values, without any immediate change in supply or demand, will create strong incentives for avoiding the levy, and encourage the formation of a refrigerant black market. This will cause increased compliance costs, reduced collection of the levy, unsafe practices and flouting of the law."

While acknowledging that the price shock caused by the levy could have the environmental benefit of accelerating the migration to alternative technology and to lower global-warming-potential gases, Wilkinson added: "Yet without adequate awareness of the issue through education and training, the HVAC&R industry faces workplace heath and safety issues."

The communiqué calls for government to form an interdepartmental committee that has representatives from government and industry; to provide funding in support of awareness- raising with industry via forums and other communication tools; and to allocate seed funding to extend the federally regulated refrigerant handling scheme to include all refrigerants.

According to reports last year by acr equipment supplier Heatcraft, the new legislation, which provides fixed carbon prices for the first three years of the scheme, could see a tax of AUS$98.09 (£63/kg) being added to a high GWP refrigerant like R404A in 2014.

The levy, based on the refrigerant's GWP, would also add AUS$32.43/kg (£21/kg) to the price of R134a from July 1, rising to AUS$35.18 in July 2014. R410A would receive a carbon price of AUS$47.38 on July 1, rising to AUS$52.32 (£33) in 2014.

Get all the week’s industry news and jobs direct to your inbox: click here to receive the free ACR-News.com weekly newsletter.

 Make a comment?

Your name
Subject

Inform me of responses to this comment

Your email

Enter number above (anti-spam)