BHP Billiton has revealed it is working with the Abbott government on the development of carbon policy, and it praised the Coalition's ''direct-action'' policy for protecting companies that compete in the international arena.


BHP chief executive officer Andrew Mackenzie told shareholders at the company's annual meeting in Perth on Thursday: ''We are looking very keenly with them as to what we can do with their direct-action measure that will, I think, protect the competitiveness of trade-exposed industries across Australia - not just ours - and really understand how we can drive emissions reductions.


''So far I am finding these discussions [with the government] very constructive, and we have a number of ideas.''


Under Tony Abbott's $2.55 billion direct-action policy, companies can win money for projects that reduce emissions, so BHP could, in theory, apply for such funding.


Mr Mackenzie's predecessor, Marius Kloppers, was outspoken in calling for a price on carbon in 2010, but BHP was ultimately unhappy with the ''carbon tax'' that Labor designed, on the grounds that it disadvantaged Australian companies competing against international rivals that were not subject to such a tax.