Australia's government is to speed up the country's transition to a carbon emissions trading system by dropping its fixed-price carbon tax in 2014, a year earlier than planned, Australian treasurer Chris Bowen said over the weekend.
From mid-2014, the price paid by carbon emitters in Australia -- currently A$24.15 ($21.80) per mt of CO2 equivalent -- will be set by reference to locally-traded carbon emissions allowances and to international carbon trading markets such as the European Emissions Trading Scheme, Bowen told ABC television in an interview broadcast Sunday.
"We do think there should be a price on carbon, but it's a sensible thing to -- when you've got a price in Europe closer to A$6/mt, and our price is much more than that -- to calibrate it to world prices," said a transcript of the interview on Bowen's ministerial website.
Prime Minister Kevin Rudd said that the Australian government had decided to move to an emissions trading scheme one year earlier than planned as it would reduce cost-of-living pressures on Australians, and would still protect the environment and act on climate change, according to a separate interview transcript on the prime minister's website. COAL INDUSTRY GROUPS REACT
Coal industry groups in Australia called for the Australian government to go further than its announcement to speed up the transition from a carbon tax, which only came into force last July, initially at A$23/mt and indexed to rise by 5% at the start of the July 1 2013 and 2014 financial years.
"Australia must immediately shelve this scheme and develop a climate policy that provides for a measured transition to a world price on carbon. Correcting one aspect of the scheme doesn't alter its underlying architecture," Australian Coal Association chief executive Nikki Williams said in a statement Sunday.
Williams said Australia's carbon pricing scheme, whether based on a fixed or floating price, would continue to damage the Australian coal industry and threaten jobs, revenue and the economic growth the industry generates.
A top priority for the coal industry in Australia is removing the application of carbon pricing to fugitive greenhouse gas emissions from coal mines as this adds a "substantial" cost for Australian coal exporters which is not borne by the industry's overseas competitors, she said.
"The proposed early shift to a floating carbon price merely puts Australia and its policies in the hands of European politicians whose first priority will be the welfare of Europe, not Australia," said Williams.
Queensland Resources Council chief executive Michael Roche said in a separate statement that the government's announcement of an earlier transition to a floating carbon price in Australia was small comfort to coal miners represented by the industry body.
Coal companies in Queensland are facing the most difficult market conditions for more than a decade, said Roche, adding that QRC members are suspending judgment in the absence of finer detail on the changes to carbon pricing.
"Queensland's resources sector cannot pass definitive judgment on the Rudd government's carbon pricing plans in the absence of answers to some fundamental questions of detail," said Roche.
Among the key questions for QRC members such as BHP Billiton, Rio Tinto and Xstrata are whether the Australian government intends to adopt the European carbon price and other features of the European scheme that protect the competitiveness of their trade-exposed industries, and whether carbon pricing would continue to apply to fugitive emissions from coal mines, said Roche.
