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The safeguard mechanism

09 November 2017
ERF

​The Emissions Reduction Fund has three components: crediting, purchasing and safeguarding emissions reductions.

While the crediting and purchasing elements provide incentives for businesses to reduce their emissions, the safeguard mechanism will ensure that emissions reductions purchased by the government are not offset by significant increases in emissions above business-as-usual levels elsewhere in the economy.

Under the safeguard mechanism, covered facilities are required to keep their emissions at or below a baseline set by the Clean Energy Regulator. 

The safeguard mechanism applies to facilities with direct scope 1 emissions​ of more than 100 ​000 tonnes of carbon dioxide equivalent (tCO2-e) per year. This extends to businesses across a broad range of industry sectors, including electricity generation, mining, oil and gas, manufacturing, transport, construction and waste. Collectively, these facilities account for about half of Australia’s emissions.

Safeguard facilities will be able to surrender Australian carbon credit units (ACCUs) to offset emissions over their baseline. For more information see Buying ACCUs.

The safeguard mechanism will come into effect on 1 July 2016, and will operate under the framework of the National Greenhouse and Energy Reporting scheme.

Read more about the safeguard mechanism.​

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