The safeguard mechanism ensures that emissions reductions purchased through the
Emissions Reduction Fund are not offset by significant increases in emissions above business-as-usual levels elsewhere in the economy. It does this by encouraging large businesses not to increase their emissions above historical levels.
Facilities whose net emissions exceed the safeguard threshold must keep their emissions at or below a baseline set by the Clean Energy Regulator.
Emissions baselines represent the reference point against which future emissions performance will be measured under the safeguard mechanism.
Baselines are set in different ways depending on whether the facility is new or well established, how much historical data it has reported under the National Greenhouse and Energy Reporting (NGER) scheme and, in some instances, what type of facility it is.
A baseline may be adjusted to accommodate economic growth, natural resource variability or other circumstances where historic emissions are not representative of future business-as-usual emissions performance for the facility. See
baselines for more information.
Safeguard obligations rest with the person with
operational control of the facility, the ‘responsible emitter’. This person is required to keep the facility’s net emissions at or below its emissions baseline. The responsible emitter may be an individual, a body corporate, a trust, a corporation sole, a body politic or a local governing body.
Responsible emitters can keep their emissions down in number of ways. For example, a responsible emitter may purchase
Australian carbon credit units (ACCUs) and surrender them to offset their emissions, or generate their own ACCUs by
carrying out a project under the Emissions Reduction Fund. Both Kyoto and non-Kyoto ACCUs can be used as offsets under the safeguard mechanism. Responsible emitters may also apply for a calculated baseline or access other management options in certain circumstances where they have, or expect to, exceed their baseline.
managing excess emissions for more information.
The safeguard mechanism is administered through the National Greenhouse and Energy Reporting (NGER) scheme and is designed to minimise additional mandatory reporting requirements.
As well as keeping their emissions below their baseline, safeguard facilities must adhere to
the reporting and recordkeeping requirements of the NGER scheme.
Responsible emitters for safeguard facilities who are not already registered under the
National Greenhouse and Energy Reporting Act 2007 must
apply to register. Applications for registration are due by 31 August following the year in which the person first becomes a responsible emitter.
The Clean Energy Regulator is required to publish information about all designated large facilities covered by the safeguard mechanism for each reporting year, after the 1 March compliance deadline.
For each facility covered by the safeguard mechanism in a reporting year, information published includes the baseline emissions number in force for that year, total reported emissions, the responsible emitter(s) for each facility, and any Australian carbon credit units surrendered.
Information is also published about any designated large facilities that remain in an
excess emissions situation on or after the 1 March compliance deadline.
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The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.
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