The Australian government is set to postpone its emissions trading scheme for about three years in an effort to make budget savings.
The federal government cannot get the scheme through the senate, the ABC reports.
A spokeswoman for Climate Change Minister Penny Wong says the blocking of the scheme has caused delays which will affect the way it is treated in the budget.
The Sydney Morning Herald reports the government has decided not to begin the scheme until 2013 at the earliest.
If the scheme is delayed, the government could save $A2.5 billion from its budget over the next three years because it would not be paying compensation to households and industries, the ABC reports.
The minister's spokesperson says the government remains committed to the scheme as the best and cheapest way of reducing carbon pollution.