THE world's largest aluminium company, Rusal, has launched a scathing attack on the Gillard Government's carbon tax and emissions scheme, saying it puts its key Queensland project at risk.

In a submission to the Federal Government, Rusal said the Clean Energy Legislative Package - the carbon tax and Emissions Trading Scheme - was a threat to the viability of the Russian group's major investment in Australia.

Rusal owns 20 per cent of the giant Queensland Alumina Refinery (QAL) at Gladstone, the second-largest alumina refinery in the world, which employs 1800 people and ships alumina to Siberia for smelting.

Rusal Australia's chairman John Hannagan said QAL would pay about $30 million to $40 million in the first year as a result of the tax.

"Over the next 10 years that could be nearly $400 million, which would have been better spent going to expansion of the plant, future energy and co-gen opportunities," he said.

Mr Hannagan said the carbon tax threatened the long- term viability of the refinery and could stymie any expansion opportunities.

He said QAL had experienced a tough decade, largely because domestic coal prices, gas and electricity had risen sharply and the company was a big energy user. The strong Australian dollar had also hurt but he said the company remained profitable because of good management and the skill of the workforce.

He said the Government's impost on Australian CO2 emissions contained in the Clean Energy legislation would penalise local industry because most overseas competitors did not have such an impost.

The Government has recognised that the competitiveness of industries such as alumina refining will be adversely affected by the carbon tax and has introduced partial compensation but Mr Hannagan said the method of compensation was "highly prejudicial".

"Rusal believes that the proposed methodology of the tax and compensation regime for alumina refining incorporated in the (legislation) is quite outrageous and will put QAL at risk," he said.

A spokesperson for Climate Change Minister Greg Combet defended the legislation and compensation yesterday, saying the government's $9.2 billion Jobs and Competitiveness Program had been designed to support industries such as alumina production while providing incentives for those industries to become more efficient.

The spokesman said alumina qualified for the highest rate of assistance, an allegation Mr Hannagan denied, saying QAL would receive 25 per cent less than other industries and the Government was "fudging it yet again".