On 28 August, the Minister for Climate Change and Energy Efficiency and the European Commissioner for Climate Change jointly announced that Australia and Europe will be linking their emissions trading systems. The Australian Government has agreed to enter into negotiations on a full-linking agreement that would allow businesses to use carbon units from the Australian Carbon Pricing Mechanism (CPM) or the European Union Emissions Trading System for compliance under either system, and the European Commission will seek a mandate to do so in coming months. As an interim arrangement and to simplify the pathway to full linking, the Australian Government will make two changes to the design of its CPM: the price floor will not be implemented; and an additional quantitative restriction will apply to the use of eligible Kyoto units. While liable businesses in Australia will still be able to meet up to 50 per cent of their liabilities through purchasing eligible international units, only 12.5 per cent of their liabilities will be able to be met by eligible Kyoto units. After these amendments are made to the Australian CPM, the European Commission and Australia will establish a partial link whereby European units can be used for compliance with obligations under the Australian CPM. A Regulation Impact Statement (RIS) for the proposed interim arrangement was prepared by the Department of Climate Change and Energy Efficiency. The RIS was assessed as adequate by the Office of Best Practice Regulation.
142 KB]
80 KB]