Australian companies could save around AUD2.5 billion (£1.6 billion) in the next five years following the nation’s decision to link its carbon pricing scheme with the EU.
Carbon analysts at RepuTex made the claim after the country announced the decision to merge with the EU’s Emissions Trading System (ETS) last week.
Under the systems, businesses are expected to pay for their greenhouse gas emissions in an effort to reduce pollution.
The new link will enable EU businesses to purchase Australian carbon credits from 2018 but Australia can buy EU allowances now and save them for future use.
The research predicts Australian buyers will use international permits to meet around 22% of their total needs before switching to the EU permit. The agreement allows the credits under both schemes to count in both systems.
Researchers have also predicted European carbon units will trade at an average of AUD11.50 per tonne between 2016-2020. They also claim power generators will gain the most from the EU link, with up to AUD1.5 billion (£9.7 million) over five years. Coal miners could also gain AUD560 million (£361.7 million)and non-coal producers up to AUD230 million (£148.5 million).