Discussion paper

The Albanese Government has increased the ambition of Australia’s climate goals, committing to reduce national emissions to 43 percent below 2005 levels by 2030, and reaffirming Australia’s commitment to achieve net zero emissions by 2050. The Powering Australia policy sets out the government’s plan to meet these climate targets—including by building on the existing Safeguard Mechanism to reduce industrial sector emissions. The federal government has announced a 1 July 2023 start date for the reforms.

The Safeguard Mechanism has been in place since 2016. It provides a legislated framework that limits the emissions of around 215 large industrial facilities. Together, Safeguard Mechanism facilities contributed 28 per cent of national emissions in 2020-21. Building on this framework will promote policy certainty and stability.

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:

  • gradually reducing baselines to help Australia reach net zero emissions by 2050
  • introducing credits for facilities that emit less than their baseline
  • providing tailored treatment to emissions-intensive, trade-exposed (EITE) facilities so businesses are not disadvantaged compared to international competitors and emissions do not increase overseas.

The Australian government is seeking feedback on this consultation paper, which outlines options for these reforms in more detail.

Submissions close 20 September 2022.


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