Australia’s emissions trading system will be linked with the long-established European version from 2015 with no price floor to be implemented.
The agreement was formed between Australian Minister for Climate Change and Energy Efficiency Greg Combet and European Commissioner for Climate Action Connie Hedegaard.
A full two-way link, comprising a mutual recognition of carbon units between the two cap and trade systems, is to commence no later than 1 July 2018, a statement by the Australian government said.
From 1 July 2015, Australian companies will be able to use EU allowances to help meet liabilities.
Altering original plans, no carbon price floor will be set but a new sub-limit to the use of eligible Kyoto unites will apply.
Under the new rules, while liable entities 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 Kyoto units.
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