Choose your own baseline – Industrial emissions and the Safeguard Mechanism

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

IN SHORT:

High emitting industrial facilities covered by the ‘safeguard mechanism’ (excluding the generation sector) are projected to drive national emissions growth through to 2030, with companies given flexibility to re-set their baselines, without being held accountable to a hard emissions cap.

As of 25 January 2018, 57 industrial facilities, across 48 companies, have been given permission to increase their emissions baselines under the safeguard mechanism, potentially allowing an additional 22 million tonnes of carbon dioxide equivalent (Mt CO2/e) increases per annum. Reported baselines therefore act as a limit in name only, with companies largely free to ‘choose their own cap’, with no penalty or requirement to offset emissions increases.

Emissions from Australia’s largest industrial facilities, covered by the safeguard mechanism, are projected to reach 30 per cent above 2005 levels by 2030, an increase of 16 per cent since the commencement of the scheme. This will see covered industrial emissions surpass the electricity generation sector as Australia’s largest emitting sector in the mid-2020’s.

With electricity sector emissions on a downward trend, emissions from large industrial facilities represent a growing problem for policymakers, with the scale of emissions increases to erode the progress of other schemes – such as the National Energy Guarantee (NEG) or Emissions Reduction Fund (ERF) – towards meeting Australia’s 2030 target.

Restricted Access

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

Not a subscriber?

To learn more about our research services for the Australian energy and emissions markets, click the button below, or email our subscriptions team.

Sign up for regular insights

LATEST UPDATES

  • The King Review: Government steps toward a ‘grey’ baseline and credit scheme

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

    The federal government today released the findings of its Expert Panel review (the King Review), […]

    Analyst Alerts, Research Insights | May 19th, 2020
  • UPDATE: Australia’s Expert Panel Climate Policy Review – What to Expect?

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

    2020 is shaping up as (another) key year for Australian climate policy, with the government’s […]

    Research Insights | May 13th, 2020
  • Where to for wholesale electricity prices under a 1.5-2°C “Step Change” scenario?

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

    In part two of this two-part series we discuss our long-term expectations for wholesale electricity […]

    Research Insights | April 28th, 2020
  • OUTLOOK: NEM wholesale electricity and LGC price forecast 2020-40 (Q3 FY20)

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

    Dear Subscriber, Our Q3 FY19-20 Australian Electricity Outlook (AEO) for medium- and long-term price development […]

    Research Insights | April 17th, 2020
  • Could COVID-19 pandemic create a ‘perfect storm’ for wholesale electricity prices?

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

    In part one of this two-part series we discuss our medium-term expectations for the National […]

    Analyst Update, Research Insights | April 16th, 2020
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone
  • Quick Navigation

  • Electricity

    Learn more about our modelling and price outlooks for the NEM
  • Renewable Energy

    Learn more about our services for wind and solar developers
  • Carbon Market

    Learn more about our Australian carbon price and market analysis
  • Latest Insights

    View our latest articles, white papers, reports and publications