Australia's conservative government on Monday scrapped plans for the auction of 60 million carbon permits before mid-year, in line with its intention to roll back the previous Labor administration's proposed emissions trading scheme.
The auctions had been designed to allow big emitters to hedge their future exposure under Labor's plan to launch the trading scheme in July 2015.
The new government is expected to repeal the carbon pricing scheme in July when the balance of power shifts in Australia's Senate. "This gives business certainty that they no longer need to take part in carbon unit auctions," Climate Change Minister Greg Hunt said in a statement.
The planned auctions would have attracted only limited participation, said Bret Harper, a carbon analyst at consultancy Reputex, because the permits were set to "become worthless sooner rather than later".
Major emitters who wanted to hedge against the unlikely event that the government failed to repeal the carbon scheme could buy UN-issued Certified Emissions Reductions or permits issued by the European Union, Harper said.
The Abbott coalition government plans to replace Labor's carbon pricing policy with an Emissions Reduction Fund, under which it would pay emitters to stay below a government-defined emissions baseline.