The federal government's first Emissions Reduction Fund auction will open on April 15, 2015.
Federal Environment Minister Greg Hunt said it is the first in a series of opportunities for businesses across the economy to undertake emissions reduction activities and bid their reductions into an auction.
“The Government, through the Clean Energy Regulator, will buy the lowest-cost emissions reductions at auction,” he said.
“A total of 29 methods are available now for the agriculture, commercial building energy efficiency, forestry, landfill gas and waste sectors.
“In the pipeline are further methods covering emissions intensity in transport, coal mine waste gas and aggregated small energy users..”
Hunt said the government's $2.55 billion Emissions Reduction Fund (ERF) builds on the Carbon Farming Initiative and will achieve reduction targets without a painful carbon tax.
The Carbon Farming Initiative was integrated with the ERF in December 2014.
ERF participants can view the draft standard carbon abatement contract.
Once a project is registered participants must report on emissions reductions as often as every six months or up to every two years.
While the government is confident the ERF will be effective, a report by the United Nations Environment Program warns Australia is one of just four nations not on track to meet emissions reduction promises,.
The report presents an analysis of each signatory to a UN goal to limit global warming to 2C above pre-industrial levels.
It found that four nations – Australia, Canada, Mexico and the United States - needed to do more to meet their respective emissions reduction targets by 2020.
The UNEP analysis finds that Australia is set to emit 710 million tonnes of CO2 in 2020. This is well above the 555 million tonnes it would emit if it were to meet a goal of a five per cent reduction in greenhouse gases by 2020, based on 2000 levels.