CANBERRA: A draft blueprint of Australia's emissions trading scheme will include fuel, but is unlikely to recommend what the country's key emissions cap should be, experts close to the report's author said on Wednesday.

The blueprint's government-backed architect, respected academic economist Ross Garnaut, will release on Friday a plan for how emissions trading could operate, likely suggesting that government force companies to bid for emissions permits at auction, a perceived failing of the European Union scheme.

But in a country heavily reliant on long-distance road transport, the notion of inflating already record-high petrol prices could fuel a backlash against the government's pledge to cut emissions with a trading system by 2010.

"Petrol will almost certainly be in, agriculture will be in within a short period. Auctions will happen for as close to all emissions permits as possible," Andrew Macintosh, who heads the Centre for Climate Law and Policy at the same university as Garnaut, the Australian National University, said.

The cost of emissions caused by using petrol or diesel would likely be borne by refiners and passed to drivers. A former diplomat, Garnaut was an economic adviser to the former centre-left Hawke Labor government and drove radical reforms during the 1980s and 90s, liberalising trade and floating the Australian dollar currency.

But the emissions trade system, promised for 2010, will bring the greatest upheaval to the energy-reliant economy since then, with big miners in particular facing rising costs.

Expected petrol price rises of up to 10 cents a litre, or seven per cent on current prices, could also be election suicide for the government, as Australians typically cover long distances in large-engined cars, which account for 50 per cent of transport emissions.

Macintosh, who is close to Garnaut, said the first two years of the scheme would be used for trial, with a phase-in before higher fuel and electricity costs are passed to consumers already angry about rising inflation and interest rates.

But the draft was unlikely to include hard numbers, he said, because of problems with Treasury department modelling of the economic impact of emissions trading. Hugh Saddler, a member of Australia's Experts Group on Emissions Trading, said the Friday report was unlikely to include crucial interim emissions targets for 2020 and 2030.

An overall emissions cap, which will be cornerstone from which the market price of carbon will be determined, will also be missing, he said, leaving much work ahead for the government in deciding how much it can afford to curb emissions without destroying corporate profits or risking economic growth.

Garnaut would call for a more ambitious plan than Labor Prime Minister Kevin Rudd's target of a 60 per cent emissions reduction by 2050, and recommend protection for low-income households while rebuffing corporate demands for protection from the full impact.

Emissions trading allow companies to accept limits on their greenhouse gas outflows and continue emissions under permits issued under a national carbon cap. Australian permit auctions could net the government A$20 billion ($19.2 billion).

"It will be the most comprehensive scheme of any one that exists in the world, and it's taking a fundamentally different approach from the Europeans," Saddler said.

"The proposal to auction the great majority of permits and the very broad coverage go way beyond any other schemes so far operating," he said.

Australia is responsible for about 1.2 per cent of global carbon emissions, but is one of the highest per capita polluters because of the nation's position as the world's biggest coal exporter and its heavy reliance on fossil fuels for energy.

But a voluntary emissions trading scheme in the most populous state NSW is already the world's second largest, behind the mandatory EU scheme, trading $225 million worth of carbon credits in 2006, Australian university researchers said on Wednesday.

Climate Change Minister Penny Wong will release an official emissions scheme options paper later in July, with laws to be sent to parliament by end-2008 and fine-tuning of the coming regime done in early 2009.