The Australian Climate Exchange (ACX) aims to make cleaner technologies more competitive and will also monitor government-approved reductions in greenhouse emissions, which will be traded between businesses.

ACX managing director ACX Tim Hanlin said the case for trading in carbon offsets was compelling as only markets could provide a clear price signal for carbon.

"As Prime Minister [John] Howard said the other day at the Melbourne Press Club, a deep and robust market for carbon will be vital if Australia is to lead the world in energy management," he said.

"This joint venture between [Australia Pacific Exchange] and the ACX provides such a market. It will not be trading in hot air. This is just the end of the beginning of a cap and trade emissions trading scheme that the Prime Minister hopes to have in place before 2012.

In" Perth, ACX Registries Services has set up a carbon offset registry which tracks the transfer of Greenhouse Friendly VERs, which are backed with a government guarantee."

This purpose-built registry will monitor and track the transfer and retirement of individual VERs.

"These are traded between businesses via the ACX in minimum lots of 100 metric tonnes of carbon dioxide equivalent. The Australian Greenhouse Office provides the Greenhouse Friendly certification," he said.

Hanlin added that through Greenhouse Friendly, Australian businesses could market greenhouse neutral products or services, deliver greenhouse gas abatement and give Australian consumers greater purchasing choice.

"We will grow. We will evolve. We will comply with all the government changes to the official emissions trading scheme that are inevitable before 2012," he said.