Australia looks set to avoid being slapped with European carbon tariffs on key export industries in the coming decade, following the election of a new government promising more ambitious climate targets.
Prime Minister Anthony Albanese, who was sworn in as leader on Monday morning, signalled to Quad leaders in Tokyo on Tuesday he would prioritise climate action, adding his commitment to achieving a 43 per cut on 2005 emission levels by 2030.
Climate and trade talks between Europe and Australia have already began firing up just days after Saturday's results, with meeting dates already set following months of delays prompted by a series of diplomatic rows over AUKUS and net zero targets.
It comes months after an embattled Coalition government took a net zero by 2050 promise to a climate summit in Glasgow, but refused to budge on setting a mid-term target.
The low-ball commitment sparked fears Australia, a major coal-exporting country, would be hit with carbon tariffs, driving up the cost of Australian coal in Europe while also drastically inflating the price of consumer goods.
But the European Union's special envoy to the Indo-Pacific, Gabriele Visentin, told The Canberra Times he expected a "major shift" in repairing relations over the next 12 months, during his first visit to Australia since the role was created in September last year.
While there were still "open issues", a free-trade agreement between Australia and the European Union was possible now that the mid-term climate targets had been addressed, Mr Visentin said.
"The major shift is, of course, the environmental policy and the climate change measures, and this will bring Australia much more aligned with the EU's policies on climate change," he said on Tuesday.
"We expect some substantial advances in the next months."
Free-trade talks paused last year in the wake of a diplomatic fallout between France and Australia after the trilateral AUKUS agreement was inked, leading to the cancellation of a billion-dollar submarine deal with Naval Group.
Australia's refusal to set a mid-term 2030 target to accompany its fresh net zero by 2050 pledge at the United Nations COP26 summit in Glasgow months later further set back trade negotiations.
Mr Visentin said the former government had already made headway on "de-icing" the relations with France, but Russia's invasion of Ukraine had added extra complications.
"The geopolitical situation in the world after the Ukrainian war has changed so things have to be seen ... in a wider picture," he said.
"There will be a new approach by the Australian government on issues which are very important for the EU, [and] they will probably create a very positive momentum."
Climate change was front and centre of Mr Albanese's talks with US President Joe Biden, Japanese Prime Minister Fumio Kishida and Indian Prime Minister Narendra Modi in Tokyo.
The 31st Prime Minister said addressing climate change was crucial for the region's national security interests as well.
"We know that China is seeking to exert more influence in the Pacific and we know that climate change is such an important issue," he said.
"Climate change is not just about the environment, it's about the shape of our economies, but also national security going forward."
Reports of a security pact between Beijing and the Solomon Islands emerged during the federal election period, causing concern China could establish a military base on the archipelago just 2000 kilometres from Australia's shores.
Mr Visentin said wealthy Western nations should "create win-win situations" with nearby neighbours, forged on the basis of mutual respect.
But he conceded Europe had also made a "big mistake" in closing down its Honiara delegation in the Pacific nation years earlier.
"It was a little bit unwise," he said.
"We should have thought more in geopolitical terms rather than in purely a budgetary one."
Mr Albanese reiterated again on Tuesday his incoming government would not change course on the country's position with China.
Mr Visentin said it was natural for Australia to hold this position, but welcomed additional nuance, having previously referred to China as a partner, competitor and rival.
"It's a partner on global issues, for which we need China, like climate change ... you cannot do anything [that] makes sense if you don't have China on board," he said.
"I have big issues when its economic rise is done to the detriment of others.
"Foreign policy is based not only on principles, but also on interest. And that's where you find the common ground."
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