Reforms to the Safeguard Mechanism
The Government is reforming the Safeguard Mechanism to reduce emissions baselines predictably and gradually over time for facilities already covered by the Safeguard Mechanism, on a trajectory consistent with achieving net zero by 2050.
The Government has conducted two formal consultation processes:
- a consultation paper on options to reform the Safeguard Mechanism; and
- the exposure draft of legislation to enable the reforms.
The proposed final detailed design of the reforms will be released for consultation later in 2022.
Reforming the Safeguard Mechanism: online information session
The Safeguard Team presented an online information session on Wednesday 31 August as an opportunity for stakeholders to:
- learn more about the proposed reforms
- help prepare responses to the consultation.
The session discussed the main themes in the consultation paper, and included time for Q&A.
About the Safeguard Mechanism
Our department is the policy lead for the Safeguard Mechanism. The Safeguard Mechanism requires Australia’s largest greenhouse gas emitters to keep their net emissions below an emissions limit (a baseline).
The Safeguard Mechanism builds on the National Greenhouse and Energy Reporting scheme’s reporting and record keeping requirements.
The government will gradually reduce emissions limits under the Safeguard Mechanism to help Australia reach net zero emissions by 2050. We will consult industry and the community on these changes to ensure they are fair, efficient and effective.
See the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (the Safeguard Rule).
The Clean Energy Regulator administers the National Greenhouse and Energy Reporting scheme and the Safeguard Mechanism. The regulator publishes information like:
- obligations and deadlines
- names of facilities
- baseline emissions numbers
- the amount of covered emissions
- the number of Australian Carbon Credit Units surrendered for compliance purposes.
Facilities required to register
The Safeguard Mechanism covers around half of Australia’s emissions, which mainly come from:
- oil and gas production
- waste facilities.
The Safeguard Mechanism applies to facilities emitting more than 100,000 tonnes of carbon dioxide equivalent per year.
The responsible emitter who has operational control of the facility must ensure the facility’s net emissions do not exceed the baseline determined by the Regulator.
Read the definitions of a facility and operational control on the regulator’s website.
The Safeguard Mechanism document helps businesses:
- understand emissions sources and calculations under the Safeguard Mechanism
- calculate site-specific emissions intensity values for facilities.
The Clean Energy Regulator is responsible for the Safeguard Mechanism.
The Emissions Reduction Fund encourages businesses to adopt smarter practices to cut their greenhouse gas emissions.