The High Court has decided a constitutional matter examining whether the effect of ’emissions-intensive trade-exposed’ activities under the Clean Energy Regulations 2011 (Cth) is to give preference to one State over another contrary to s 99 of the Australian Constitution. The plaintiff nickel producers contended that there were unequal and significant differences between Queensland and Western Australian nickel productions that lead to the provisions having an unequal effect in Queensland because the method of classification used in the statute relied on industry averages, and did not account for differences in the inputs, processes and outputs of different producers as between Queensland and Western Australia (see details at [51]).

The Court unanimously held that the regulation was not contrary to s 99, that various provisions in the overall legislative scheme should not be read down in their application to Queensland Nickel to avoid contravening s 99, and that the plaintiff was liable for the unit shortfall charges. Nettle J (with whom the rest of the Court agreed: see here), held that the scheme applied equally to nickel producers in its terms ([56]) and that in practical effect the differences in inputs, processes and outputs were only due to natural, business or other circumstantial differences in the States of production ([56] and see [58]–[66]). Absent any contravention of s 99, the laws were not found to be invalid and the plaintiffs are liable to pay the ‘unit shortfall charge’ that was imposed under the scheme.