From 2018 onwards Australia, one of the world’s highest per capita emitters of climate change causing pollutants, will join the European Union’s Emission Trading System (ETS).

In July 2012 Australia introduced a carbon tax on some of its most polluting companies in the form of a floor price of a fixed 19.09 euro per tonne of carbon. This floor price was to underpin the scheme when it moved to a floating ETS in 2015.

The new development means that Australian companies will be able to use EU allowances from July 2015 onwards. However, European companies will have to wait until 2018 to use Australian allowances.

Commissioner for Climate Action, Connie Hedegaard, has said that “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”.

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