SYDNEY: Australia's multi-billion-dollar LNG industry remains a sticking point for the government's carbon trading plans and more concessions for the sector are needed to help the scheme pass parliament, analysts and industry said on Thursday.

The government on Monday delayed the introduction of the emissions trading scheme for one year until July 2011 after months of protests from business groups and opposition parties.

It also offered more concessions to polluting industries that export their goods to countries that do not have a carbon price.

But the LNG industry remains opposed, saying the scheme will inhibit its growth.

"It remains the case that this scheme imposes a cost on Australia's LNG without acknowledging the benefits of the role that the LNG industry should play in substituting for less greenhouse-intensive sources of energy around the world," Belinda Robinson, chief executive of the Australian Petroleum Production & Exploration Association, said in a statement.

The government plans to introduce the legislation into parliament within weeks but opposition conservative parties have said they will not support it.

"The government has really put on the table nearly everything everybody was asking so the only area for major change is the LNG sector and power generation," Martijn Wilder of law firm Baker & McKenzie said at a conference on emissions trading in Sydney.

Wilder, the firm's head of global climate change and emissions trading practice, said further concessions to the LNG industry could see the opposition change its stance.

Australia's gas industry has A$200 billion ($150 billion) in new projects on the drawing board. The LNG sector, including major players Woodside and Chevron, argues it is part of the solution to minimising the impact of climate change because LNG is far less polluting than coal or oil.

It says it should not face the same handicaps as other industries that will be forced to to buy permits to pollute or UN-backed certified emission reduction (CERs) offsets to meet emissions caps under the trading scheme.

A spokesman for Woodside said that the industry would continue to press the government for concessions, adding this was one area where the government could move to make the scheme more attractive to the industry.

Shell Australia Chairman Russell Caplan said earlier this week it was crucial the government finalized a plan quickly and that it did not disadvantage exports against competitor nations.

Climate change Minister Penny Wong told the conference Australia needed to provide certainty to business and to have a carbon scheme in place before UN climate talks in December in Copenhagen.

"We will talk to the opposition because we think it (the scheme) is in the national interest and I'm determined to get it through," said Wong.

Under this week's changes to the scheme, the government issued unlimited Australian Emission Units (AEU) at A$10 per tonne in the first year, effectively delaying carbon trading for two years until July 2012.

The emerging over-the-counter market, where options over AEUs were being bought by coal-fired power generators to offset future liabilities, dried up following Monday's announcement, though trading in CERs, which Australian firms will be able to import to offset emissions, might attract some interest.

Emma Herd, director of emissions and environment at Westpac Banking Corp said Australian companies taking a longer view were likely to continue to buy longer-dated CERs if prices were attractive.