In an historic milestone, the Australian Parliament has passed the Safeguard Mechanism (Crediting) Amendment Bill 2023 to establish the framework for key elements of the Safeguard Mechanism reforms.
The reforms will ensure Australia’s 215 largest emitters play their part in meeting our national climate targets of 43% below 2005 levels by 2030 and net zero by 2050.
The covered facilities account for around 28% of Australia’s emissions production across:
- oil and gas production
- waste facilities.
The final policy settings for the reforms involved extensive stakeholder engagement, including 3 rounds of public consultation on design options, draft legislation, and a proposed design with draft statutory rules.
Since the initial design phase, the Australian Government made improvements to the scheme while strengthening industry competitiveness as the world moves to net zero. This includes:
- Providing flexibility and additional support for strategic industries
- Clarifying how the rules will apply to new fossil fuel developments
- Improving integrity, by enhancing transparency and accountability measures.
With the Bill passed, the Government will amend the Safeguard Rules and other subordinate legislation in April 2023, to provide further policy detail of the scheme.
The updated Safeguard Mechanism scheme will be in operation as of 1 July 2023.