THE Australian Chamber of Commerce and Industry has sided with the Coalition to argue that it is premature to pass emissions trading legislation this year, and unnecessary because of the Rudd Government’s proposed delay to the scheme’s start date.

On Monday Prime Minister Kevin Rudd received strong backing for proposed changes to the scheme from business groups including the Business Council of Australia and the Australian Industry Group, both of which agree with the Government’s contention that the scheme needed to pass the Senate this year in the interests of budget certainty.

But ACCI, which yesterday announced it was commissioning major research into the impact of the scheme on the small and medium businesses it represented, said there was “no policy or timing reason” for the legislation to be passed this year.

Opposition leader Malcolm Turnbull has said Australia should not finalise its ETS until after the UN Copenhagen meeting in December.

“Get the scheme right. Get the design right. There is no need to finalise it in the next five or six weeks. They have not done adequate economic modelling, particularly on the impact on jobs in regional Australia,” he said.

Climate Change Minister Penny Wong insisted yesterday it was essential for the legislation to be passed before Copenhagen.

“We need to ensure we give the right signals to investors and we also need to ensure we go to Copenhagen with a scheme to match our targets,” she said.

The Opposition has also been emphasising the potential costs of the scheme for smaller businesses that will not have to purchase emissions permits, but which will still face higher electricity costs.

ACCI has commissioned a study from Castalia Strategic Advisors on the impact of the scheme on plastic and chemical manufacturing, food processing and freight and transportation, to be finalised in June.

A document submitted to the UN this week shows most developed countries that are part of the Kyoto Protocol are in the process of setting a 2020 target for the successor agreement to be negotiated at Copenhagen, but only three have announced a target and only one — the European Union — has legislated one.

In the US Congressman Mike Doyle, a key Democrat working on proposed emissions trading legislation to reduce emissions by 25 per cent of 2000 levels by 2020, said it was likely in the first 10 or 15 years of the scheme most permits would be given to major industries for free.

Under the revised Australian laws some of the heaviest emitting industries would get up to 95 per cent of their permits for free. Other industries will initially get almost 70 per cent of their permits for free, but these rates will decline over time.