Australia is considered to be one the biggest fossil exporters, and it criticized the suggestion of the European Union to enact a carbon border tariff.
The decision was confirmed yesterday in the EU’s new climate plan.
Australia has argued calling such a decision “protectionist” and saying it could breach trade rules.
Trade Minister Dan Tehan said that Australia would be “looking very closely” at how this will be fulfilled, paying attention to potential rule breaches.
“The last thing the world needs is extra protectionist policies being put in place,” Dan Tehan told the Australian Broadcasting Corporation on Thursday.
Mined resources such as iron ore, coal, gas, and oil are more than two-thirds of Australia’s export wealth.
Dan Tehan believes that such a tax would “undermine” global cooperation on reducing emissions and the EU was “unilaterally imposing its views and its ways on other countries”.
"[This] is not necessarily going to achieve the outcomes we're all looking for and that's why we'll be looking to discuss this further with them," he added.
Despite the concerns of Australia’s allies, it remains one of the few G20 nations that has not yet committed to a net-zero 2020 emissions goal.
Earlier, Prime Minister Scott Morrison told climate leaders at a summit hosted by the US president Joe Biden, that Australia had cut their emissions by 19% since 2005 and the country was “on the pathway to net-zero”.