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The safeguard mechanism

28 October 2019

NGER​​

Important information for responsible emitters

In response to the coronavirus (COVID-19) pandemic, amendments have been made to the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 in recognition of the widespread disruption that COVID-19 has caused for business operations. The amendments:

  • Retain reported baselines for an extra year (reported baselines now cease on 1 July 2021)
  • Extend calculated baselines that ceased on 1 July 2019, by a year (the expired calculated baseline will have effect for 2019-20, unless replaced with a new baseline determination)
  • Allow facilities to use site-specific values for calculated baselines that commence in 2020-21 (formerly 2019-20 was the last year)
  • Allow responsible emitters to opt-in to extend a multi-year monitoring period that ceases on 1 July 2020, by one year
  • Allow a new facility criteria calculated baseline to commence in 2020-21 at the latest (formerly 2019-20), and
  • Delay the introduction of benchmark baselines for new facilities by a year (now will commence 1 July 2021).

This follows another recent amendment to include prescribed production variables and default emissions intensities in Schedules 2 and 3 of the Safeguard Rule which means that applications can now use prescribed production variables and default emissions intensities.


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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