June 4 (Bloomberg) -- The Australian Securities Exchange, owned by ASX Ltd., said it expects to start a futures market for carbon emission permits in advance of the proposed introduction of a national trading system by 2012.

The exchange is appointing a working group to assist with industry input into the design of a futures market and to advise the government on how a carbon trading system needs to be set up to allow an efficient futures market for permits, the Sydney- based company said today in an e-mailed statement.

Australia will start a domestic carbon trading system, or ETS, no later than 2012, Prime Minister John Howard said yesterday. The Sydney Futures Exchange, now owned by ASX, first evaluated the possibility of starting emissions forwards trading in 1999. A forwards market can be used by market participants to manage risk and help determine prices.

``Once sufficient detail of the ETS is known, ASX will be in a position to facilitate emission trading at the earliest opportunity,'' Robert Elstone, chief executive officer of ASX Ltd., said in the statement.

AGL Ltd., Australia's biggest electricity and gas retailer, is committed to taking part in the trading system, Managing Director Paul Anthony said yesterday in an e-mailed statement.

BP Plc's Australian unit supports the start of a national emissions trading system that will place a price on greenhouse gas emissions and provide certainty for investment decisions, said Chandran Vigneswaran, a Melbourne-based spokesman.

Last week, Russell Caplan, chairman of Royal Dutch Shell Plc's Australian unit said a global carbon trading system was required to allow for investments in projects while reducing emissions. A national system needs to be compatible with any broader regional or cross-regional mechanism that emerges, he said in a May 28 interview.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net.

Last Updated: June 4, 2007 03:23 EDT