Australia's government introduced laws on Wednesday aimed at driving renewable energy investment and curbing greenhouse emissions, but remained deadlocked with rivals over ambitious plans to start carbon trading.
The centre left Labor government hopes laws setting a 20 percent target for renewable energy use by 2020 in Australia's currently coal-reliant electricity supply will spur up to $22 billion worth of investment in solar and wind projects.
"We must provide our future generations with an economic and environmental legacy that matches the one we enjoy," Junior Climate Change Minister Greg Combet told parliament while unveiling the Renewable Energy Target, or RET, laws.
But the Australian Greens, who wield balance-of-power in the upper house Senate, said the government threatened RET-related projects in the pipeline by linking its laws to a related carbon trade regime, which faces near-certain Senate defeat next week.
"The government since its election has been standing in the way. We have simply been told to sign up to their plan, which we know sets its sights so low as to actively lock out the option of success," Greens Deputy Leader Christine Milne said in a speech.
The renewable energy laws set a statutory target of 9,500 gigawatt-hours (GWh) from renewable electricity sources in 2010, increasing to 45,000 GWh in 2020.
Renewable sources provide only 6.5 percent of Australia's current energy needs, with the rest generated from coal, oil and gas, making the country one of the worst per capita polluters.
While wind and solar energy have enjoyed strong growth, they represent only 0.4 percent of electricity generation for public consumption. Emerging renewable technologies include geothermal, wave and large scale solar technologies.
Under the RET, wholesale electricity buyers are required to meet a share of the renewable energy target in proportion to their share of the national wholesale electricity market.
A related bill increases the level of the shortfall charge under the scheme from A$40 dollars ($31.62) per megawatt-hour to $65 per megawatt-hour, while creating a system of tradeable renewable energy certificates backing compliance.
Power companies watching closely for the legislation to pass parliament and underpin a wave of renewable energy projects include Origin Energy Ltd (ORG.AX), AGL Energy (AGK.AX), TRUenergy, owned by Hong Kong-based CLP Holdings (0002.HK) and Pacific Hydro, owned by a group of Australian pension funds. Prime Minister Kevin Rudd rejected opposition accusations that the government was using "legislated blackmail" by tying the RET and massive industry assistance worth A$100 million to passage of the controversy-laden carbon trade laws.
"These matters before the Senate now equal the future of Australian industry and the future of Australian jobs," Rudd told conservative opponents in parliament.
But Milne said that like conservatives holding the largest Senate voting bloc, the Greens would try to amend the RET laws to cut industry compensation and remove the emissions trade link, as the carbon trade scheme would be defeated.
"The Greens cannot and will not support a scheme that is environmentally ineffective and economically inefficient," she said.
