ALERT: Updated timeline for the release of Safeguard Mechanism policy reform

In with our earlier market update, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) yesterday notified stakeholders that the Government will release its proposed Safeguard Mechanism reform framework for consultation in early-mid January. The updated timetable comes in light of the Government’s current focus on its Energy Price Relief Plan, which is expected to pass both houses of Parliament today, with the support of the Greens and Senator Pocock (and Lambie).

No change has been made to the Government’s regulatory timetable for the new reform package, with consultation to run through January and February on proposed draft rule amendments, including the methodology (or methodologies) for setting baselines (site-specific or industry average), baseline decline rates (for phases one and two), rules for the use of prescribed units (such as limits on the use of SMCs), allocations for emissions intensive trade exposed (EITE) facilities, and the treatment of new entrants.

In parallel, the Government will seek to legislate its Safeguard Mechanism (Crediting) Amendment Bill by end-March 2023, establishing the legal framework for the creation of new SMCs by covered facilities, including how credits will be issued, purchased, traded and reported. The Bill also contains architecture for the creation