Pressure builds to delay Australian carbon trading

CANBERRA (Reuters) - Australia's government on Thursday came under renewed pressure to delay plans for carbon trading, with the nation's leading industry body saying the global downturn made a 2010 start unrealistic.

Australia plans to introduce carbon trading in July 2010 as the central plank of its efforts to cut greenhouse gas emissions, blamed for global warming, by at least five percent by 2020 from 2000 levels.

The Australian Industry Group, which represents manufacturing, engineering and construction firms, said the scheme should be delayed until 2012 because of the financial downturn.

"The 2010 timetable has also now become unrealistic because of the impacts of the global financial crisis on business confidence, cash flows and the availability of credit," Australian Industry Group chief executive Heather Ridout said.

Ridout's calls are a blow to the government as her organization broadly supports carbon trading as a market-based way of curbing greenhouse emissions.

Big business and conservative lawmakers have also been calling for the scheme to be delayed because of the impact higher carbon costs will place on business and the community at a time when the economy is struggling to maintain growth.

Major resource firms and Australia's coal industry say the carbon trading plan will force companies to close or move some operations offshore.

But Climate Change Minister Penny Wong has said the government remains committed to its plan, and wants laws for carbon trading to pass through parliament by the end of June this year to ensure the scheme can start on time.

Australia's plan, which will be the world's broadest carbon trade scheme, will cover 75 percent of the nation's emissions and 1,000 of Australia's biggest firms.

Major exporting polluters, including iron ore and aluminum producers BHP Billiton, Alcoa and Rio Tinto, and liquefied natural gas (LNG) producers Chevron and Woodside Petroleum, will get significant exemptions for their emissions.

Australia, the world's biggest coal exporter and a growing supplier of LNG, accounts for 1.5 percent of global carbon emissions but is one of the highest per-capita polluters, with 80 percent of electricity from coal-fired power stations.

(Editing by David Fogarty)