Transporters say costs may rise

Transport operators are concerned they will have to pass on the costs associated with the carbon tax to farmers.

The tax will not affect heavy vehicle transport until 2014, but rail freight will be impacted immediately under the Federal Government's fuel tax system.

A spokesman for Federal Climate Change Minister Greg Combet said the fuel tax system was introduced in conjunction with the carbon pricing mechanism on July 1.

"An equivalent carbon price will apply to some large users of transport fuels (aviation, marine and rail) under the fuel tax system," he said.

"This will be in the form of reduction in fuel tax credits or increases in fuel tax excise.

"The impacts of the carbon price on transport costs are expected to be around four cents to transport a tonne of freight for 100km by rail."

A CBH spokesman said the co-operative was concerned about the costs associated with the carbon tax, but expected to increase its use of rail transport in the near future.

"CBH remains concerned about the potential pass-on costs of a carbon tax through both our own supply chain and that of our grower members," he said.

CBH said it was unclear as to how much additional cost it would bear as a result, but said it would work hard to minimise those costs.

"One thing that is clear is the carbon tax will enable us to demonstrate the efficiencies and reduced energy consumption rail has over road transport costs and use rail wherever possible."

CBH said the State's Tier 3 rail network would play a key role in the co-operative's future operations.

As of July 1, 2014, the Federal Government will apply a carbon tax to heavy on-road vehicles, with details of tax rates still being decided.

Kevin Penrose, of Mukinbudin Transport, said there was a lot of uncertainty around what might occur in two years' time.

"Nobody can tell how it is really going to work," he said.

"If you've got a 1980 model truck they'll hit you with 20 cents a litre but if you've got a new truck it might only be five cents," he said.

"We will get the costs and the poor farmers are going to have to wear it.

"As much as they say the farmer isn't going to get taxed for carbon, we will have to pass on the costs."

Livestock and Rural Transport Association of WA president Grant Robins said any cost increases associated with the carbon tax for agriculture transport would be passed on.

"As far as the direct costs go, that won't be until 2014," he said.

"Some of the costs will start flowing through the consumables we use.

"If there are any cost increases they will be passed on.

"There is no tap left at all in the transport industry."