Australian’s to scrap carbon floor price

Australia and the European Commission on Tuesday agreed to link their carbon trading schemes by 2018, allowing Australian companies to buy cheaper EU carbon credits and providing a much-needed boost for the flagging European market.

Reuters reports that Australia will also scrap its planned AU$15 a metric ton carbon floor price when its emissions trading scheme starts in July 2015. Australia's carbon tax is fixed at AU$23 a metric ton.

The ditching of the floor price is the first major change to Australia's plan to price carbon. It comes after businesses expressed concern over facing higher costs than their European competitors.

Businesses in Australia will be able to use EU allowances to cover up to 50 percent of Australian liabilities from July 2015, but European companies will have to wait until 2018 to use Australian allowances.

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