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Overview

The Safeguard Mechanism is part of the National Greenhouse and Energy Reporting Act 2007. Together with the emissions reporting obligations under the Act, the Safeguard Mechanism provides a framework for Australia’s largest emitters to measure, report and manage their emissions. It places legislated emissions limits (called baselines) on facilities that emit more than 100,000 tonnes of carbon dioxide equivalent each year.

We amended the Safeguard Mechanism in March 2019 to make it simpler and fairer. Calculated and production adjusted baseline applications were simplified by giving businesses the option to use prescribed production variables and default emissions intensity values (referred to as ‘default values’). In March 2020, the majority of default values were included in Schedules 2 and 3 of the Safeguard Rule. We have worked closely with industry to develop additional default values for a number of Safeguard-covered sectors. 

Proposed changes

The National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment (Additional Prescribed Production Variables) Rule 2020 would:

  • set default values for the majority of the remaining Safeguard-covered sectors

  • include corresponding default emissions intensity values for prescribed production variables that were set in the Safeguard Rule in March 2020

  • update relevant default emissions intensity values to the latest global warming potentials from the Intergovernmental Panel on Climate Change’s Fifth Assessment Report (which apply under the National Greenhouse and Energy Reporting Scheme from the 2020-21 year).

Exposure draft

We invite submissions on the Exposure Draft package, which includes 3 documents:

  1. Exposure draft of the National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment (Additional Prescribed Production Variables) Rule 2020 [1MB PDF] [141KB DOCX]

  2. Tranche 2 additions to the Safeguard Mechanism: prescribed production variables and default emissions intensities document [1.2MB PDF] [109KB DOCX]

  3. Explanatory document [690KB PDF] [109KBDOCX]

Outcomes

The National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment (Additional Prescribed Production Variables) Rule 2020 became law on 29 September 2020.

The amendment sets prescribed production variables and default emissions intensity values in the Schedules to the Safeguard Rule. These default values can be used by Safeguard facilities to set baselines (or emissions limits) under the Safeguard Mechanism.

The amendment instrument implements the technical detail of the amendments made to the Safeguard Mechanism in March 2019.

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