Safeguard facilities are required to keep their net emissions at or below their prescribed emissions baseline.
If a facility's emissions exceed or are expected to exceed its baseline, the facility operator has a number of options available to them to manage the excess emissions, including:
There is a range of enforcement options available to the Clean Energy Regulator where a responsible emitter fails to take one of the above actions. These options include entering into an enforceable undertaking, issuing an infringement notice, or court proceedings to seek an injunction or civil penalties.
There are several circumstances in which a facility's baseline may be temporarily or permanently increased.
Calculated baselines are intended for facilities that do not have sufficient historical emissions data to make a reported baseline, or for which historical emissions may be a poor indicator of future emissions.
Emissions intensity baseline variations are intended to cover circumstances where expanding production is accompanied by an emissions intensity improvement (that is, the emissions intensity of production has decreased).
Safeguard facilities can surrender ACCUs to offset their emissions and stay below their baseline. Both Kyoto and non-Kyoto ACCUs can be used as offsets under the safeguard mechanism.
The responsible emitter can either
purchase ACCUs from other businesses, or generate their own ACCUs for abatement under the
Emissions Reduction Fund.
ACCUs will be subtracted from the facility's net emissions number in two circumstances:
In these circumstances, the net emissions number of the
person who was the responsible emitter at the time the ACCUs were issued, will be decreased by the number of ACCUs delivered.
To avoid counting offsets twice, a facility that is both covered by safeguard and a participant in the Emissions Reduction Fund will have ACCUs it has generated added to its net emissions number. When the facility surrenders ACCUs, they will be subtracted from its emissions number. This way, each tonne of abatement represented by an ACCU is only counted once. See the Department of the Environment and Energy's
double counting fact sheet for more information about this process.
Surrender of ACCUs for the purpose of reducing a net emissions number can be performed from any Australian National Registry of Emissions Units (ANREU) account. This means that the responsible emitter for the facility does not need their own account – any person with an ANREU account will be able to surrender units on their behalf. Each year, after reports have been submitted under the
National Greenhouse and Energy Reporting Act 2007, the Clean Energy Regulator will contact all responsible emitters that are in an excess emissions situation. Those responsible emitters that have their own ANREU account will receive a ‘surrender initiation notification’ in their ANREU account. They can use this notification to start the safeguard surrender process. Those entities that do not have an ANREU account will need to advise the Clean Energy Regulator which ANREU account the ‘surrender initiation notification’ should be sent to. Receipt of a ‘surrender initiation notification’ does not compel the responsible emitter to surrender ACCUs. Surrender of ACCUs is one of a number of excess emissions management options available under the safeguard mechanism.
To accommodate natural variability, safeguard facilities may apply for a multi-year monitoring period using our
Documentasset: Multi-year monitoring application form.
Multi-year monitoring allows a facility to exceed its baseline in one year, so long as average emissions over a two or three year period are below the baseline.
The monitoring period can cover two to three years, giving businesses sufficient time to implement emissions reduction projects, acquire offsets or help capture natural peaks and troughs in emissions.
Facilities whose excess emissions are the direct result of exceptional circumstances, such as a natural disaster or criminal activity, may be exempted from safeguard obligations for a defined period of time.
We will consider whether reasonable steps were taken to mitigate the risk of excess emissions arising from the exceptional circumstances, both before and after its occurrence.
Exemptions will not apply to events that reflect normal market dynamics or as a mechanism for addressing drivers of emissions variation, such as changes to price, production inputs and outputs, or maintenance.
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