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ENERGY

The Voice of the Australia's Agricultural Manufacturers Industry

THE ISSUE

Accessibility, reliability and affordability of energy are pressing concerns for agricultural manufacturers across the country.

 

High energy prices, monopolistic supply practices and supply unreliability prevent businesses investing more in their operations. Reduction in cash flow, capital expenditure, staff hours and ultimately jobs are the by-products of the rise in energy costs.

The challenges are reflected across AAMA’s combined membership, with frustration around energy policy even being experienced in the sugar sector, which is largely self-sufficient in terms of energy production. 

 

By burning bagasse (a fibrous sugarcane by-product) mills generate electricity and steam to power all factory operations. Across the sugar industry, more than 50% of the electricity produced is exported to the National Electricity Market (NEM) – providing renewable electricity to over 170,000 households. Currently, a bio-mass fuelled co-generation plant provides approximately 47% of the large-scale renewable energy capacity in Queensland.

The Australian oilseeds industry also relies on stable, affordable and predictable energy costs in order to ensure competitiveness in the domestic and global market.

Australia has world class oilseed processing facilities, yet the industry is subjected to competing locally and globally with vegetable oils from near neighbours where energy costs provide them with a competitive advantage. The ability to competitively process on-shore is vital for Australia to fully realise its potential internationally as a source of healthy, ‘clean and green’ vegetable oil. Providing surety on energy costs also drives confidence in future investment in processing capability and efficiencies, further improving competitiveness. 

 

In a similar vein, energy policy is a serious concern to the dairy industry. The current cost of energy (electricity and gas) for dairy processors is approximately $170 million per annum. In 2017-18 Dairy Australia estimated this cost to have risen between 50-70 per cent - an additional $100 million. The dairy industry has limited capacity to respond to rising energy costs, as milk flow is constant and cannot be turned off and on at the flick of a switch. 

What the overlap of issues between AAMA members demonstrates is the critical nature of energy policy for agricultural manufacturing in Australia. With a combined