Australia could play a coordinating role in developing more compatible carbon border systems across the region, according to experts cited in a debate over how to support low-emissions export industries while managing the trade and administrative implications of border carbon measures.
The discussion was reported by Carbon Pulse on 23 September. It concerns Australia’s potential role as a trade-dependent economy and does not represent an announcement that Australia has adopted a new national carbon border levy.
Carbon Leakage Review informs policy discussion
The policy debate follows Australia’s completed Carbon Leakage Review, led by Frank Jotzo.
The Australian government has said that the review’s recommendations will be considered as part of the 2026-2027 review of the Safeguard Mechanism.
The review examines whether additional measures are required to address the risk that differences in emissions constraints could shift industrial production or investment between jurisdictions. It also considers the feasibility of border carbon adjustments and the importance of internationally compatible approaches.
Compatibility could affect emissions reporting
Regional coordination could make it easier for exporters to demonstrate their emissions performance across multiple markets, provided participating systems use compatible approaches.
Such compatibility would require agreement on practical issues including emissions measurement, treatment of carbon prices and support for trading partners with more limited administrative resources.
The potential benefits are not automatic. National schemes using different definitions and requirements could instead increase compliance complexity for companies operating across multiple borders.
The policy discussion therefore centres on whether regional cooperation can make carbon requirements more predictable while avoiding separate and incompatible accounting requirements at each border.
