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. See
managing excess emissions for more information.
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 becomes a responsible emitter.
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