According to the federal government, the carbon tax will apply to Australia’s largest 500 emitters, which are companies that emit more than 25,000 tonnes of carbon dioxide.
In the 2012-2013 financial year, the carbon price will be $A23 per tonne. It will rise to $A24.15 per tonne in the following financial year and then to $A25.40 per tonne in 2014-15.
From July 2015, the number of units issued by the government each year will be capped by a pollution cap set by regulators. Most carbon units will be auctioned by the Clean Energy Regulator and the price will be set by the market starting from a floor price of $A15 per tonne.
Under the Carbon Farming Initiative (CFI), farmers and land managers can earn carbon credits by storing carbon or reducing greenhouse gas emissions on the land. These credits can be sold to people and businesses wishing to offset their emissions.
This scheme includes credits earned from activities such as reforestation, savannah fire management, and reductions in emissions from livestock and fertiliser use.
CFI credits can also be sold to international companies.
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