4 April 2023.
Australia’s Safeguard Mechanism (Crediting) Amendment Bill 2023 has been passed by Parliament, marking a significant milestone in the country’s efforts to address climate change. With the new arrangements taking effect from 1 July 2023, the reformed Safeguard Mechanism aims to ensure that Australia’s largest emitters are contributing towards the nation’s emissions reductions task.
The Safeguard Mechanism covers 215 sites across the country that each emit more than 100,000 tonnes of carbon dioxide a year, together producing 28% of Australia’s emissions. Fossil fuel operations, such as gas extraction sites, liquefied natural gas processing plants, and coal mines, make up roughly half of the facilities covered. Meanwhile, the rest of the facilities include steelworks, aluminum smelters, cement producers, chemical manufacturers, major transport companies, and airlines.
Determining Emissions Limits
Each major polluting facility was given an emissions limit, known as a baseline, which was mostly based on historic output. The Safeguard Mechanism will force coal mines and oil refineries to curb emissions by about five percent each year. The purpose of the Safeguard Mechanism is to stop industrial emissions from increasing and wiping out the emissions cuts paid for by taxpayers.
The implementation of the Safeguard Mechanism will address the climate change and help Australia its target of net zero emissions by 2050. It will play a major role in the government’s emissions reduction plan. The passing of the new bill is a significant milestone, but much work remains to be done to ensure that the mechanism is effectively implemented and enforced.