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.
The Australian Minister for Climate Change and Energy Efficiency, Greg Combet, and the European Commissioner for Climate Action, Connie Hedegaard made this announcement on August 28th and stated that the shared trade of systems is planned to start on the 1st July 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 proclaims that: “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”.
At Allen & York we think that this would be a pivotal move for both the EU and Australia and will further strengthen international efforts and cooperation on climate change. Furthermore, this will support the growth of an international carbon market.
Initially, an interim link will be put in place, whereby Australian businesses will be able to use EU allowances to help meet liabilities under the Australian emissions trading scheme from July 1 2015.
Australian businesses will therefore then be able to have access to a larger market and Europe will be provided with European market participants with enhanced and more flexible business opportunities in Australia.
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