Safeguard Mechanism

Our department is the policy lead for the Safeguard Mechanism. The Safeguard Mechanism requires Australia’s largest greenhouse gas emitters to keep their net emissions below an emissions limit (a baseline).

The Safeguard Mechanism builds on the National Greenhouse and Energy Reporting scheme’s reporting and record keeping requirements.

Together, the National Greenhouse and Energy Reporting scheme and the Safeguard Mechanism help businesses to measure, report and manage their emissions.

Baselines support business growth and allow businesses to continue normal operations, while encouraging lower emissions production.

See the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (the Safeguard Rule).

The Clean Energy Regulator administers the National Greenhouse and Energy Reporting scheme and the Safeguard Mechanism. The Regulator publishes information like:

• obligations and deadlines
• names of facilities
• baseline emissions numbers
• the amount of covered emissions
• the number of Australian Carbon Credit Units surrendered for compliance purposes

Facilities required to register

The Safeguard Mechanism covers around half of Australia’s emissions, which mainly come from:

• mining
• electricity
• oil and gas production
• manufacturing
• transport
• waste facilities

The Safeguard Mechanism applies to facilities emitting more than 100,000 tonnes of carbon dioxide equivalent per year.

The responsible emitter who has operational control of the facility must ensure the facility’s net emissions do not exceed the baseline determined by the Regulator.

Read the definitions of a facility and operational control on the Regulator’s website.

Read how the Regulator sets baselines, how facilities can manage excess emissions and about the Regulator’s discretionary options to deter noncompliance on the Regulator’s website.

Changes in response to the 2017 review

A 2017 review of the Australian Government’s climate change policies recommended amending the Safeguard Mechanism to make it simpler and fairer.

The Safeguard Mechanism was amended in March 2019 to bring baselines up-to-date and allow them to keep pace with business growth. These amendments give facilities the option to use published production variables and industry default emissions intensity values in baseline applications.

The Safeguard Rule was amended by the National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment (Additional Prescribed Production Variables) Rule 2020 in October 2020 to:

• include additional prescribed production variables and default emissions intensity values
• update default emissions intensity values that apply from the 2020-21 compliance year

For changes in the Safeguard Rule see:

• Compilation 5 of the Rule for default emissions intensity values that apply to the 2019-20 compliance year.
• Compilation 6 (and any later compilation) of the Rule for default emissions intensity values that apply to the 2020-21 compliance year and later.

The Safeguard Mechanism document defines published production variables. It also provides guidance for facilities who want to calculate site-specific emissions-intensity values .

Changes in response to the COVID-19 pandemic

The Safeguard Mechanism was amended in May 2020 to address the impacts of the COVID-19 pandemic. In response to the significant and widespread workforce disruptions at covered facilities, a number of administrative timing changes were made. These maintain the integrity and accuracy of baseline applications.

The National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment (Extended Transition) Rule 2020 started on 12 May 2020.

Read more

The Emissions Reduction Fund encourages businesses to adopt smarter practices to cut their greenhouse gas emissions.

Contact us

Email safeguard.mechanism@industry.gov.au