The federal government has opened public consultation on policy options to address the risk of "carbon leakage" to help protect Australian industries including steel, aluminium and cement.
It's the first of two public consultations that will inform a review to assess the need for a carbon border adjustment mechanism and emissions product standards.
The review by the Department of Climate Change, Energy, the Environment and Water will also look at whether more funding is needed for decarbonisation, and consider multilateral initiatives.
Carbon leakage occurs when heavy industries move to countries with a weaker emissions reduction policy.
Climate Change Minister Chris Bowen said addressing carbon leakage would help Australian companies stay competitive in a global net zero economy.
"We want to see Australia's heavy industry decarbonise, while continuing to manufacture the steel, cement, aluminium and other products needed for the energy transformation," Mr Bowen said in a statement on Monday night.
"By continuing to address carbon leakage risk, we will protect Australia's reputation as a reliable and secure trading partner, promote our ambition to become a renewable energy superpower and secure a future home for green industrial goods like green steel."
The review will be led by Professor Frank Jotzo, an expert in the economics of climate change.
The consultation is open until December 12 and the second round is expected to get under way in mid-2024. Final advice will be given to the government by September 30, 2024.
