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

  • What impact will a net-zero emissions target have on forecast ACCU prices?

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

    The Australian carbon market is undergoing a “fundamental repricing” on the prospect of a national […]

    Research Insights | April 7th, 2021
  • OUTLOOK: Long-term Australian carbon price, supply and demand outlook

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

    The price of Australian Carbon Credit Units (ACCUs) has risen 11 per cent calendar year-to-date, […]

    Research Insights | April 7th, 2021
  • ALERT: Australian CO2 spot price hits record high of $18.50/t, up 12% YTD

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

    The price of Australian carbon credit units (ACCUs) reached $18.50/t on Monday, a record high, […]

    Research Insights | February 16th, 2021
  • EU levy could impose carbon price of A$65-140 on Australian exports, with more climate tariffs to come

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

    The European Parliament’s environment committee last week endorsed the proposed Carbon Border Adjustment Mechanism (CBAM), […]

    Research Insights | February 10th, 2021
  • Australian carbon offset price climbs past $17/t, a 12-month high: Here’s why

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

    The price of Australian carbon offsets broke through $17 a tonne on Wednesday, reaching a […]

    Research Insights | February 4th, 2021
  • 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