THE High Court has dismissed the Clive Palmer-owned Queensland Nickel's claim the now-defunct carbon tax discriminated against Queensland.
The company claimed the Clean Energy Act breached the constitution as Queensland Nickel had to pay more in carbon tax than its Western Australian competitors.
As part of the carbon scheme, a Jobs and Competitiveness Program was set up to provide free carbon credits to "emission-extensive, trade-exposed" companies.
Queensland Nickel claimed the JCP contravened section 99 of the Constitution that prohibits the Federal Government from making laws that discriminate between states.
Because Queensland Nickel used a different ore that generated more greenhouse gas than the ore used by Western Australian companies, the company argued paying more tax to produce the same product was discrimination.
But the court unanimously rejected Mr Palmer's company's claims, finding the Clean Energy Act did not give preferential treatment to Western Australia.
It found the higher carbon costs for Queensland Nickel were associated with different inputs and processes and not with preferential treatment for Western Australian producers.
High Court Justice Geoffrey Nettle said the different amount of carbon tax paid by different companies did not constitute discrimination.
"Since the differences between inputs and production processes are not shown to have been caused by differences between circumstances in different States, it cannot be inferred that the differences in outputs were caused by differences in circumstances between States," he wrote in the decision.
The tax imposed a fee on companies for greenhouse gas emissions in excess of a specified threshold.
While the Act has since been repealed, companies still had to pay outstanding debts from the three years it was in place.
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