The Department of Climate Change, Energy, Environment and Water (DCCEEW) is consulting on options to reform the Safeguard Mechanism to help industry reduce emissions in line with Australia's climate targets.
The Safeguard Mechanism requires Australia's largest greenhouse gas emitters to keep their net emissions below an emissions limit (a baseline). The Australian Government proposes:
Visit DCCEEW’s consultation hub for more information on these reforms and the consultation activities.
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 requiring large facilities, whose net emissions exceed the safeguard threshold, to keep their emissions at or below emissions baselines 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 equivalent (CO2-e) per year. See
coverage for more information.
Under the safeguard mechanism, facilities are given a baseline which is the reference point against which net-emissions levels will be assessed. Net-emissions are the covered emissions from the operation of the facility plus any Australian carbon credit units (ACCUs) issued in relation to abatement activities occurring at the facility, minus any ACCUs surrendered for the facility, for that year. Facilities must keep their net emissions at or below their baseline. See the
baselines section of our website for more information.
Safeguard obligations rest with the person with
operational control of the facility. This person is referred to as the 'responsible emitter' and may be an individual, a body corporate, a trust, a corporation sole, a body politic or a local governing body. The responsible emitter is required to keep the facility's net emissions at or below its emissions baseline.
Responsible emitters with a facility that has, or is likely to, exceed its baseline have several options to manage the excess emissions situation.
The safeguard mechanism is administered through the National Greenhouse and Energy Reporting (NGER) scheme and is designed to minimise additional mandatory reporting requirements.
This means that as well as keeping their net emissions below the 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 financial year in which the facility first exceeds emissions of 100,000 tonnes CO2-e of covered emissions.
The Clean Energy Regulator is required to publish information about all designated large facilities covered by the safeguard mechanism. This publication will occur after the 1 March deadline for managing excess emissions from the prior financial year.
For each facility covered by the safeguard mechanism, 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.
Safeguard facility reported emissions for more information.
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