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The safeguard mechanism

15 December 2017



The safeguard mec​hanism commenced​ on 1 July 2016.​​

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. 


The safeguard mechanism applies to facilities with scope 1 covered emissions of more than 100,000 tonnes of carbon dioxide equivalence (tCO2-e) per year. See coverage for more information.​

Emissions baselines

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.

Who is responsible?​

Safeguard obligations rest with the person with operationa​l 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 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. See manag​ing excess emissions for more information.

Meeting safeguard requirements

The safeguard mechanism will be administered through the 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 2007must apply to register​. Applications for registration are due by 31 August following the year in which the person first beco​mes a responsible emitter.


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