(EnergyAsia, June 25 2012, Monday) — After years of heated domestic debate over how best to combat its high output of greenhouse gases, Australia will impose a groundbreaking carbon tax on 294 of its biggest polluters from July 1.

Companies and local governments that produce more than 25,000 metric tons (28,000 tons) of carbon dioxide a year, or the equivalent in other carbon gases, will be charged a tax of A$23 for every metric ton of carbon dioxide they produce.

The tax has proved to be one of the most divisive issues the country has had to face in recent years.

Prime Minister Julia Gillard staked her government’s survival on the issue to narrowly secure the passage of the new tax which was bitterly opposed by the country’s powerful mining lobby. She successfully argued that Australians needed the tax as part of a long-term programme to achieve the government’s 2020 target of reducing the country’s greenhouses gas emissions to 5% below 2000 levels.

Mining companies including the coal lobby, which will bear the brunt of the new tax, argued that it threatens investments, jobs and, ultimately, the economy.

The miners have also expressed concern that the agricultural industry, Australia’s third largest carbon producer, has been given an exemption due to difficulties in measuring emissions on farms.

The electorate sided with the government’s position as Asian companies led by China and India have shown no fear of the tax as they continued to invest heavily in Australia’s mining sector.