BHP chief Andrew McKenzie says carbon tax could work

Australia should consider adopting a market mechanism that “could be a carbon tax” to encourage lower emissions and lower power prices, the CEO of mining heavyweight BHP Billiton has said.

Andrew MacKenzie, CEO of BHP Billiton, which has lifted copper and energy coal production. Source: AAP

Andrew McKenzie repeated the company’s calls for a price on emissions, which BHP argued for in a submission to the Finkel Review of the country's energy system last year.

“We should apply some form of regulation, or could be [a] carbon tax,” Mr McKenzie told ABC Radio on Thursday morning.

“That allows the market to decide: what is the right technology to solve the challenges of having low-cost electricity, having low-emissions electricity, and having reliable electricity.”

BHP is a public supporter of the Turnbull Government's National Energy Guarantee. The policy is still in the draft stage as the federal government attempts to get the states to sign on, but the NEG is expected to include a mechanism to reward companies that lower their emissions.

The CEO of the Australian-born mining giant said the government should not subsidise either renewable energy or coal-fired power. The company has clashed with the main Australian industry body, the Minerals Council of Australia, over the MCA’s advocacy for coal subsidies.

“In the same way that we wouldn’t advocate skewing that debate by overly subsidising renewables, we don’t think you should overly subsidise coal,” Mr McKenzie said.

“Leave it to the market to find out what is the right way to get low emissions, low cost and high reliability for the power in this country.”

But he said the company still intended to remain a member of the MCA, so long as BHP did not end up in “a position where there is strong advocacy on things we strongly disagree with”.

“We want to remain a member,” he said.