Australia will scrap its planned floor price for carbon emissions and will link directly with the European Union’s emissions trading scheme by 2018.
The $au15 floor price was due to underpin the scheme when it moved to a floating emissions trading scheme in July 2015.
Under the new arrangement, business in Australia will be able to use EU allowances to cover Australian liabilities from July 2015 but European companies will have to wait until 2018 to use Australian allowances.
Climate Change Minister, Greg Combet, said Australia would also impose a new limit on the use of eligible Kyoto units. Companies will still be able to meet up to 50 percent of liabilities with international units, but will only be allowed to meet 12.5 percent of liabilities with U.N. backed Kyoto units.