The mechanism was designed to force big polluters to reduce their emissions. It was reformed in 2023 and has since become a central plank in the government's net-zero ambitions.
But world-renowned climate analyst and Senior Research Fellow at The Australia Institute, Ketan Joshi, reveals how the oil and gas industries are using loopholes to continue doing enormous damage to the planet and, in many cases, are being rewarded for doing so.
His analysis finds that the scheme not only sets shamefully weak emissions limits but, when big polluters inevitably (and easily) fall below those limits, they're rewarded with credits which they can sell to other polluters.
"The whole idea of the safeguard mechanism was to limit emissions. In practice, it's just a system which lets companies cheat on their obligations," said Ketan Joshi, Senior Research Fellow at The Australia Institute.
"This isn't just ineffective regulation. This is actually helping fossil fuel companies pollute. It's giving them money.
"Here's an eye-opening example: Chevron's Gorgon facility in WA, one of the highest emitting gas facilities in the world, ended up with an emissions limit that was far, far higher than its 2023-24 emissions – the weakest target the project has ever received.
"Because it was under its limit, it was issued 388,803 'safeguard mechanism credits', which another polluter can buy from Chevron to meet its emissions target. This is despite Gorgon's emissions being the highest they've been since the 2019 financial year."
