The fight to set the terms of Australia’s emissions trading system has begun with a claim that nearly A$60bn ($58bn) of new liquefied natural gas projects have been put at risk because the sector is not enough of a polluter to qualify for free carbon permits.

Woodside Petroleum, Australia’s second-largest oil and gas producer, says the scheme, outlined this week and to be introduced in 2010, would unfairly put the burden of cost on low greenhouse gas emitters – such as Woodside, which exports clean LNG to energy-hungry Asia – rather than heavy emitters such as coal-burning power stations.