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The safeguard mechanism

18 June 2021

NGER​​

Important information for responsible emitters

The final elements of the transition to the new baseline setting arrangements, including the expiry of reported baselines, will be in place for the 2021-22 compliance period.

We encourage you to start your planning now. Options for setting baselines will be more limited for baselines commencing 1 July 2021.

Please be aware that:

  • The final year reported baselines will apply is 2020-21, unless you are a grid-connected electricity generator.
  • 1 July 2020 is the final commencement date for calculated baselines that use site-specific production variables and/or site-specific (estimated) emissions intensities.
  • Calculated baselines commencing after 2020-21 must use prescribed production variables and default emissions intensities unless applying under the inherent emissions variability criteria.
  • Production adjusted baselines commencing after 2020-21 must use prescribed production variables and default emission intensities unless moving from a calculated baseline with site-specific values.
  • Facilities coming off reported baselines can apply for a production-adjusted baseline, without needing a calculated baseline first, provided they use prescribed production variables and default emissions intensities.
  • If your facility's baseline was affected by changes to Global Warming Potentials, we will contact you to discuss updating this number to reflect the current values.

Note: If you want to use site-specific emission intensities for some or all production variables in a calculated baseline you must apply by 1 November 2021.

Together with the reporting obligations under the National Greenhouse and Energy Reporting Act 2007, the safeguard mechanism provides a framework for Australia’s largest emitters to measure, report and manage their emissions. It does this by encouraging large facilities, whose net emissions exceed the safeguard threshold, to keep their emissions at or below emissions baselines set by the Clean Energy Regulator.

Threshold

The safeguard mechanism applies to facilities with scope 1 covered emissions of more than 100,000 tonnes of carbon dioxide equivalent (CO2-e) per year. See coverage for more information.

Emissions baselines

Emissions baselines represent the reference point against which emissions performance will be measured under the safeguard mechanism.

Baselines are set in different ways depending on whether the facility is new, the facility’s industry sector and whether the baseline is fixed or annually adjusted for production. A baseline may be adjusted to accommodate economic growth or natural resource variability. See baselines for more information.

Who is responsible?

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.

Managing emissions

Responsible emitters with a facility that has, or is likely to, exceed its baseline have a number of options to manage the excess emissions situation. For example, the responsible emitter can reduce the facility’s net emissions by purchasing and surrendering Australian carbon credit units (ACCUs) to offset their emissions. 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.

See managing excess emissions for more information.

Meeting safeguard requirements

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 record keeping 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.

Publishing reported emissions

The Clean Energy Regulator is required to publish information about all designated large facilities covered by the safeguard mechanism for each reporting year. This publication will occur 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 ACCUs 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.

See safeguard facility reported emissions for more information.

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