Carbon market linkages:Industry perspectivesRuth Kelly

Principal Adviser – Energy & Climate Strategy

Paris, 12 September 2013

Over 70% of Rio Tinto’s GHG emissions are liable under carbon pricing schemes

Europe

SouthAmerica

Australasia

Africa

Asia

NorthAmerica

Aluminium

Copper

Diamonds &

Minerals

Energy

Iron Ore

Key

Mines and mining projects

Smelters, refineries, power facilities and processing plants remote from mine

Rio Tinto operations at July 2013

…rising to 80% if South Africa’s prospective carbon tax is introduced

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There is a very wide range of carbon prices in jurisdictions with carbon pricing schemes

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Carbon prices in different jurisdictions

0 5 10 15 20 25 30

RGGI

Australia (with linkage)

EU

Shenzhen

South Africa

California

Quebec

Alberta

EU (Phase 2 prices)

Australia (pre-EU linkage)

British Columbia

$/tonne

Harmonised shielding arrangements are more important for industry than harmonised prices

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Shielding arrangements in different jurisdictions

50 60 70 80 90 100

EU

Australia

California

Quebec

Alberta

Beijing

South Africa (proposed)

Indirects

Directs

Indirects not applicable (hydro generation)

The EU-Australia linkage has not reduced implementation challenges for industry

• Rio Tinto recognises that linking markets can have advantages

• But linking is not necessarily the only or most straight-forward way to ensure a level playing field for industries facing international competition

• More important for industry in the longer term are:

• Commonality of design features

• Policy certainty

• Shielding of EITE

• Minimisation of administrative burden

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