Australian prime minister Tony Abbott made the repeal of the tax a central manifesto policy in September's general election. The move will remove a tax on the country's top polluters and make fossil fuels cheaper to produce.
After twice being defeated in the Australian Senate in the last year, the bill to repeal the tax on carbon was passed by 39 votes to 32.
It was introduced last year by the previous Labour government and targeted businesses, mainly energy companies, which produced carbon pollution. The tax was passed on to consumers' bills. With the repeal, Liberal party leader Abbott said households would save A$550 (US$ 515) a year.
The tax, which was brought in in 2012, imposed a fixed carbon tax of A$23 per tonne on the country's top 500 polluters.
The removal means the country does not have a policy to reduce the 5% emissions cut.
Wind power companies have been concerned about the repeal of the tax as it means fossil fuels will be cheaper to produce.
The wind industry has been vocal in its warnings to the Australian government. In June, Goldwind spoke up about recent comments by Abbott about Chinese investment and the government's attitude towards a review of the country's renewable energy target (RET).
In a bid to improve the public image of wind power, Danish manufacturer Vestas launched its global Acts on Facts campaign in Australia last year. The campaign is designed to dispel myths on wind power and combat the anti-wind lobby, which is highly active in Australia.
In 2012, Senvion CEO Andreas Nauen called on the Australian government to leave the target unchanged.
Australia's RET is a federal government policy designed to ensure that at least 20% of electricity is sourced from renewable sources by 2020. The 12-year old policy has cross-party support and legislation includes a two-yearly review, next due in 2014.