Carbon tax adds pressure to business: BlueScope

MELBOURNE, Feb 27 (Bloomberg): BlueScope Steel Ltd, Australia's biggest steelmaker, said a carbon tax would add extra pressure to its business that's already battling high raw-material costs and the stronger Australian dollar. "More costs being thrown at us by the government just really do put a bit more pressure on the business than we'd like to have," Chief Executive Officer Paul O'Malley said on Australian Broadcasting Corp's Inside Business programme today. Australia will set a price on carbon emissions next year in preparation for a trading programme that could begin as early as 2015 aimed at curbing greenhouse gases, Prime Minister Julia Gillard said last week. Revenue from the pricing plan will be used to assist households, help companies adjust to the changes and for future climate change programmes. "We will get to the end goal - the most efficient mechanism I've always wanted and Labor has always advocated for, which is a full emissions trading scheme, a cap on carbon pollution and the market sets the price," Gillard said today on Channel 9's Today programme. "We have to cut carbon pollution. The best way to do that is price carbon." The Australian currency gained 13 per cent in the past year, the second-best performer after the Swiss franc among the Group of 10 nations, according to data compiled by Bloomberg. Santos Ltd, Australia's third-largest oil and gas producer, said last week's announcement was an "important step" to a well-designed price. Alcoa Inc, the biggest US aluminum producer, said it supported a "carefully designed" carbon price that doesn't damage the industry. "Regardless of the approach taken, it is critical that the government's climate change response ensures the sustainability and growth of what are world-class alumina and aluminum assets in Australia," Alcoa Australia Managing Director Alan Cransberg said in an e-mailed statement. The levy would need to be at least A$25 ($25.20) a tonne to be effective, Origin Energy Ltd. Managing Director Grant King said last week. Countries are already spending billions of dollars to reduce emissions and promote renewable energy. Low-carbon energy investment surged to a record $243 billion last year, Bloomberg New Energy Finance said January 11. Gillard established a Multiparty Climate Change Committee, a measure proposed by the Australian Greens party, to consider how to reduce emissions. That committee still needs to discuss incentives to industries and households as well as setting the level of the tax. Opposition leader Tony Abbott said his Liberal-National coalition wouldn't support the laws. He said it would add A$300 per year to household electricity bills and that a voter backlash would prevent it getting parliamentary approval. The policy would cost BlueScope A$300 million a year if there was no assistance provided, O'Malley said today. BlueScope's first-half loss widened because of higher costs and lower domestic demand, it said last week.