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According to the Australasian Railway Association (ARA), the carbon tax, released today at Parliament House will have a perverse effect on rail transport, essentially punishing environmentally friendly rail and rewarding heavy vehicles.

While freight and passenger rail will be exposed to additional costs on diesel fuel and electricity prices, the exemption of heavy vehicles to 2014/15 and the blanket exemption on petrol will give the more emissions-intensive road sector a huge leg-up.

The ARA supports initiatives to reduce global carbon emissions and believes transport has a significant role to play. Transport is the third highest source of CO2 emissions in Australia and currently accounts for more than 40% of households’ total energy use,

ARA CEO Bryan Nye said the ARA has been a strong advocate for including the entire transport sector in the carbon price. The exclusion of heavy vehicles from a carbon tax until 2014/15 is very disappointing.

“Rail supports action on climate change. However, under this scheme, rail, which is considerably less emissions intensive, will have to grapple with significant increases in its costs, while the more polluting road vehicles are exempt,” said Mr Nye.

“This carbon tax will essentially make public transport more expensive compared to private road vehicles. I can’t see how this is meant to reduce emissions, it is ludicrous.”

The carbon price will cost the rail industry in excess of $100 million dollars for energy costs alone.

“The rail industry was willing to pay this impost if it was fairly applied across the transport sector. Unlike heavy road vehicles, we will see no exemptions for our industry despite being 3-4 times less emissions intensive,” said Mr Nye.

“Heavy vehicles have received a free pollution pass for the next two years. But in two years time they will be charged for the pollution they cause so I would encourage those using freight transport to consider this when making their long-term transporting decisions and initiate a move to rail.”

The lack of investment earmarked for sustainable transport options is another concerning element of the carbon price package. A carbon price that does not provide low emissions transport options will simply increase the cost of transport without reducing emissions.

“We’ve recently conducted a comprehensive survey on public transport. Out of 1,510 participants surveyed, 72% believed that some of the carbon tax revenues should be used for sustainable transport infrastructure such as public transport. It is strange that the carbon price announcement provides little in the way of low-carbon transport options. We urge that funds set aside for clean technologies be extended to the transport sector,” said Mr Nye.

“As a service provider to trade exposed industries, we support measures that minimise adverse outcomes to our international competitiveness. Whether these are adequate will be for those industries to determine.

“At the end of the day, the rail industry wants to see action on climate change. What we object to is how the carbon price will operate within the transport sector. It is currently penalising the low-carbon transport options.

“It’s not too late to rectify some of these issues. I urge all parties to rethink the application of the carbon price on the transport sector to ensure a level playing field. As a priority, heavy vehicles must be included from the beginning of the scheme,” concluded Mr Nye.