ARTICLE: Looming large – How will Australia’s new 2035 target re-shape the Safeguard Mechanism, and when?

While the Australian Carbon Credit Unit (ACCU) market has been relatively stable over the past six months, Australia’s climate policy landscape is again about to change gears.

By the end of February, Australia will submit its updated Nationally Determined Contribution (NDC) under the Paris Agreement, including a 2035 emissions target.

For Australia’s carbon market, this will guide the shape of the Safeguard Mechanism compliance scheme after 2030 – including the re-setting of emissions baseline decline rates – the key lever to drive industrial decarbonisation, and demand for ACCU offsets.

While final baseline decline rates will not be set until 2026-27,