The EU and Australia have outlined plans to link their respective emissions trading schemes by 2018.
The Australian Minister for Climate Change and Energy Efficiency Greg Combet and the European Commissioner for Climate Action Connie Hedegaard issued a joint statement saying that the link between the two schemes would allow businesses to use carbon units in either system.
In order to make the link possible, the Australian government is dropping its plans for a carbon floor price of AUS$15, which it had been planning to implement, and will instead set the carbon price at the same level as the European Union Emissions Trading System (EU-ETS).
While a full two-way link is established, an interim link will allow Australian businesses use EU allowances to meet their liabilities under the emissions trading scheme from July 1, 2015.
“These arrangements provide Australian businesses with access to a larger market for cost-effective emission reductions and provide European market participants with enhanced business opportunities,” said Combet.
The European Commission and Australia will start work on the interim link immediately, aiming to agree registry arrangements by mid-next year.
From 2018, once all the arrangements are in place, European businesses will also be able to purchase Australian credits in return.
“Linking the Australian and European Union systems reaffirms that carbon markets are the prime vehicle for tackling climate change and the most efficient means of achieving emissions reductions,” added Combet.
For further information:
European ‘traded’ emissions down 2% in 2011 (17-May)
Australia brings in controversial carbon tax (2-Jul)
European Parliament votes to prop up Emissions Trading System (29-Feb)
Australia and EU discuss linking carbon trading schemes (6-Sept 2011)
05 September 2012