The Australian Aluminium council said the carbon pricing plan will hit the industry harder than its overseas competition and will make Australian producers pay a higher carbon cost for several years.

Executive Director of the Australian Aluminium Council, Miles Prosser, said: “This imposes a carbon cost on Australian aluminium producers of at least $60/t of aluminium compared to only $8/t in China. Australia’s carbon cost will rise every year of the scheme and over the next decade to more than $200/t while in China it is not expected to get any higher than $60.

“The Government only wants you to look at the first year of the scheme. The initial costs are bad enough but we need to look at the huge cost increases that are being locked in for the future.”

The Government has changed the policy so that the allocation of permits to industries such as aluminium may be lower in future years than under the CPRS.

“This means the total carbon cost to be paid by the aluminium industry will rise from approximately $120M in the first year to approximately $400M in 2020.

“That will have a huge impact on investment. Not only will Australia be discounted as a site for new facilities but existing operations will find it hard to attract the capital needed to maintain viability. If we lose that investment, it costs Australia, but global greenhouse emissions do not reduce they are just shifted elsewhere.”

The Australian Aluminium Council had asked the Government to ensure that Australia’s carbon price increased no faster than its competitors but the Government’s policy does not do this.

Mr Prosser said: “The Government is betting Australian jobs on the wild gamble that other countries will follow our policy. But we are asking the Government to maintain and grow those jobs while we pressure other countries to match Australia’s effort.

“This is putting jobs in Gladstone, Geelong, Hunter Valley, Portland, Tasmania and Western Australia on the line when no other country is exposing their industry to the same risks.

"We are keen to discuss details with the Government to get the right outcome for jobs in the aluminium industry, particularly in regional Australia.”