Carbon Markets

IN FOCUS: Safeguard Mechanism policy threads the needle to addresses structural concerns

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

The government yesterday presented its detailed design proposal for the Safeguard Mechanism emissions compliance framework, releasing a position paper and draft amendments to the Safeguard Rule and related subordinate legislation. Consultation will run to 24 February 2023, with the enhanced safeguard framework to commence from 1 July 2023 (start FY24).

The position paper outlines the government’s proposed approach on:

  • the Safeguard Mechanism’s share of the national emissions reduction target;
  • setting baselines for existing and new facilities, including the annual decline rate;
  • arrangements for issuing and using Safeguard Mechanism Credits (SMCs);
  • compliance arrangements, including access to credits, offsets, banking and borrowing, multi-year monitoring periods and cost containment measures; and
  • the treatment of emissions-intensive, trade-exposed facilities.

Notably, changes to the Safeguard Mechanism will now align industry emissions with Australia’s 43% emissions reduction target by 2030, and net-zero by 2050, with the setting of a transparent emissions reduction trajectory providing a critical signal for industry investment in on-site emissions reductions and external offsets.

In this update, we summarise the key outcomes of the government’s newly announced Safeguard Mechanism reform, along with potential impacts on market prices and forward dynamics.

Restricted Access

This is a subscriber report. Please login to access this content.

Tour our EnergyIQ platform

RepuTex research insights and market data is published via our EnergyIQ platform.

Click below to learn more about our services.

Sign up for regular insights

LATEST UPDATES

  • Carbon Markets

    UPDATE: Lumpy buying bumps Generics higher mid-week and HIR down from short term resistance level

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Our latest Carbon Weekly report has now been published, reviewing activity in the Australian and […]

    Research Insights | February 19th, 2024
  • Carbon Markets

    UPDATE: Intermittent buyer interest in Generic No-AD nudges prices higher

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Our latest Carbon Weekly report has now been published, reviewing activity in the Australian and […]

    Research Insights | February 12th, 2024
  • Carbon Markets

    UPDATE: Muted ACCU market activity sees Generic/HIR spread compress, voluntary cancellations lower in January

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Our latest Carbon Weekly report has now been published, reviewing activity in the Australian and […]

    Research Insights | February 5th, 2024
  • Carbon Markets

    OUTLOOK: NEM wholesale electricity and LGC price forecast 2024-43 (Jan-24)

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Our latest Australian Electricity Outlook (AEO) for wholesale electricity and LGC prices in the National […]

    Research Insights | February 1st, 2024
  • Carbon Markets

    UPDATE: ACCU prices continue their rise with recent highs for HIR re-tested

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Our latest Carbon Weekly report has now been published, reviewing activity in the Australian and […]

    Research Insights | January 29th, 2024
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone