The Australian government has released its design proposal for the reformed Safeguard Mechanism framework, outlining the establishment of a constraint on Scope 1 emissions from high emitting facilities, implemented via declining emissions baselines aligned with Australia’s 2030 target.

To understand the potential risks to meeting the Safeguard Mechanism emissions budget, RepuTex was engaged by the Climate Council and the Australian Conservation Foundation to model the potential effects of higher-than-expected emissions growth due to variation in fossil fuel production, and new entrants, on the Safeguard Mechanism emissions budget through to 2030.

Specifically, analysis presents different scenarios for coal and LNG production, and the impact on Scope 1 emissions covered by the Safeguard Mechanism, evaluating the baseline decline rates required to meet the emissions budget where production growth is higher-than-expected. In doing so, analysis also considers alternative regulatory options for the treatment of new projects.

This document presents the key findings and results for each scenario, and a description of the methodological approach applied by RepuTex.