New refinery under threat from change to govt rebate

GLADSTONE'S oil re-refinery hasn't even begun to produce clean oil but may be forced to close if proposed changes cut a government rebate.

The Federal Government currently gives the highest-grade waste oil refining facilities a 50 cents per litre benefit, but recommendations from a recent review advise the government to slash the benefit to 25 cents per litre.

Backbenchers including Flynn's Ken O'Dowd and Riverina MP Michael McCormack are supporting the Northern Oil Refinery and its older but smaller counterpart in Wagga Wagga, the Southern Oil Refinery.

Speaking with The Observer on Tuesday, Southern Oil Refinery managing director Tim Rose was frustrated and angry the system had let down the people giving benefits back to the environment.

>> Investor outraged at possibility of change to oil rebate scheme

He said if the proposed cuts were to go ahead, he would have to consider the future of the Gladstone business.

But he hoped Environment Minister Greg Hunt, with whom the final decision rests, would make the right decision for the environment, the regional economy and jobs, and the consistency of the party not to go back on previous promises.

A representative for Mr Hunt's office said the independent review of the Product Stewardship scheme, brought in by the Howard government in 2000, suggested possible changes to support the scheme's long-term sustainability.

"The Australian Government will consider this advice as well as input provided by industry, including oil recyclers and other stakeholders, in developing its response to the review," a statement reported.

Mr O'Dowd said the previous Labor government left the Product Stewardship for Oil scheme in a mess.

"It needs to be fixed - but in a way that retains the incentives for waste lube oil re-refiners and protects the ongoing viability of businesses such as Northern Oil.

"I am calling on the minister to re-look at this scheme and see what can be done to fix it," he said.

Northern Oil Refinery:

  • $55 million refinery, opened March 13
  • A crew of 28 work on site
  • Receives a government rebate of 50 cents per litre
  • A review suggests slashing it to 25 cents per litre
  • Each tonne of oil burned - by other companies - releases 2.92 tonnes of CO2e into the environment
  • Once fully operational, NOR will reduce Australia's greenhouse emissions by about 290,000 tonnes annually
  • A decision on the rebate is expected in August


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