The Australian government imposed a carbon tax of $23 AUD per tonne of emitted CO2 on select fossil fuels consumed by 500 of the country’s biggest polluters starting July 2012. This system is expected to become a market-based trading program in 2015. Hence, it is technically an Emission Trading Scheme (ETS) as it operates on the basis of permits that can be traded. However, until transitioning to a flexible-price ETS in 2015-2016, the initial price of permits is fixed and the quantity unlimited, thus functioning as a carbon tax. On October 15, 2013, the Australian Government announced that it will abolish the carbon tax from July 1, 2014.
Source: The Clean Energy Regulator
A fully flexible price under an emissions trading scheme will commence on July 1, 2015 with the price determined by the market. It will cover the stationary energy, transport, industrial processes, non-legacy waste, and fugitive emissions sectors. The transport sector is only applied to domestic aviation, domestic shipping, rail transport, and non-transport use of fuels. Landfill facilities with direct emissions of 25,000 tonnes CO2 a year or more will be liable under the carbon tax.
Sources: The Clean Energy Regulator ; Clean Energy Future
Offset and/or Other Emission Reduction Crediting Programs
Australia is implementing a Carbon Farming Initiative (CFI) legislated in mid 2011 to drive abatement through offsets, mainly for non-covered sectors in forestry and agriculture. Land sector generates around 18 per cent of Australia’s emissions. Through the CFI, landholders can receive each unit of carbon credit for 1 tonne of abatement in reducing emissions, increasing carbon stores and Kyoto, non-Kyoto compliant activities.
Source: Department of Climate Change and Energy Efficiency of Australia