EU and Australia link trading emission systems
The European Union (EU) has announced that it will link its emissions trading system with Australia's emissions trading scheme, allowing businesses to use carbon units and comply under either system.
Australian Minister for Climate Change and Energy Efficiency, Greg Combet, and the European Commissioner for Climate Action, Connie Hedegaard announced today (August 28) that the mutual use of the trade systems will commence no later than July 1 2018.
Mr Combet said: "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".
Ms Hedegaard said: "The European Union is the first regional emissions trading system and spans the largest part of the European continent. We now look forward to the first full inter-continental linking of emission trading systems".
"This would be a significant achievement for both Europe and Australia. It is further evidence of strong international cooperation on climate change and will build further momentum towards establishing a robust international carbon market."
While formal negotiations proceed towards a full two-way link, an interim link will be established, whereby Australian businesses will be able to use EU allowances to help meet liabilities under the Australian emissions trading scheme from July 1 2015.
Mr Combet said: "Starting today, Australian liable entities can purchase EU allowances for future compliance in Australia".
"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" he added.
Mr Combet also said the arrangements would provide flexibility to businesses with operations in both Australia and Europe, which could reduce compliance costs.