Policy Overview

Following the update of Australia’s greenhouse gas emissions targets as a reduction of 43% by 2030 and net-zero by 2050, the federal government announced that it is reforming the Safeguard Mechanism with the aim to bring the policy in line with these targets. The reformed Safeguard Mechanism will require the country's largest emitters to keep emissions below a baseline that will decline over time in line with Australia's updated climate targets. The reform also proposes to introduce credits for facilities that emit less than their baseline, while recognizing the need to provide tailored treatment to trade-exposed facilities.

The consultation on the Safeguard Mechanism Reforms, which was released in August 2022, proposed a range of reforms to raise the ambition of the policy, including resetting baselines, introducing declining baselines and the formation of new ‘cap-and-trade’ credits, called Safeguard Mechanism Credits (SMC’s), which would be accredited to facilities that emit below their baseline and sold to facilities that have exceeded theirs.

Following the consultation on the Safeguard Mechanism Reforms, the government released its consultation on the draft Safeguard Mechanism (Crediting) Amendment Bill 2022, which took place in October 2022. In this consultation, the government asked for feedback on the creation of Safeguard Mechanism Credits (SMCs) and use of Australian Carbon Credit’s (ACCU’s) for reducing direct emissions.

In January 2023, the government released its proposed design of the policy, which is under consultation until the 24th February. It includes ‘cost containment measures’ in the form of a price cap of $75 per ton on Australian Carbon Credit Units (ACCU’s) which can be used to meet Safeguard obligations, despite the original consultation paper stating that ‘there may not be a need at this stage for further price stability measures’. Various forms of price containment measures have been advocated for by industry across both consultations to date, therefore it appears the measure has now been included in the proposed design in response to the positions held by industry.

InfluenceMap will continue to track the development of the reforms in 2023 and will update this page to reflect any policy developments.

InfluenceMap Query

Alignment with IPCC on Climate Action; Emissions Trading; GHG Emission Regulation

Policy Status

Under development

Evidence Profile

1937243714

Key

opposing not supporting mixed/unclear
supporting strongly supporting

Policy Engagement Overview

InfluenceMap has detected that the overall engagement with the reforms across both consultations to date appears to be largely not supportive or oppositional. Entities holding these positions appeared to be industry associations representing the oil and gas and resource sector companies. Companies generally held more mixed positions in comparison, however there remains a greater number of unsupportive positions compared to supportive.

Policy Engagement Trends

  • Overall engagement with the Safeguard Mechanism consultation appeared to be negative. A total of 37 companies and industry associations in InfluenceMap's database submitted a response to both the Safeguard Mechanism consultation and the consultation on the draft legislation. Of these respondents, 20 entities (54%) appeared to advocate against ambitious elements of the reforms, while 7 entities (19%) appeared supportive. Among the 15 respondents that also responded to the consultation on the draft legislation, 8 (53%) continued to appear to advocate against ambitious reforms, while 3 (20%) entities appeared to be supportive.
  • The most oppositional positions appear to have been taken by resource sector associations such as the Australian Petroleum Production and Exploration Association (APPEA) as well as mining associations such as the Minerals Council of Australia (MCA) amongst four others. These associations appeared to oppose the unilateral removal of headroom from the policy (resetting baselines), expressed concern at baseline decline rates and advocated for tailored treatment for EITE’s to come within the policy through the direct provision of SMC’s and differentiated baselines. Companies Glencore, and Whitehaven also continued to hold unsupportive positions, additionally calling for a price cap on SMC’s to be introduced.
  • BP and AGL supported the reforms in their individual submissions along with a number of industry associations such as the Clean Energy Council (CEC), Carbon Market Institute (CMI) and the Energy Efficiency Council (EEC), which opposed the support of tailored treatment for EITE’s within the policy, instead advocating for direct funding for low emissions' technology.

Engagement on this policy is ongoing, lobbying details, and trends will be added here as they become available.

InfluenceMap Query

Alignment with IPCC on Climate Action; Emissions Trading; GHG Emission Regulation

Policy Status

Under development

Evidence Profile

1937243714

Key

opposing not supporting mixed/unclear
supporting strongly supporting

Live Lobbying Alerts

Woodside, APPEA and SACOME lobby to weaken Safeguard Mechanism Reforms

03 March 2023

​​Australian associations adopt mixed positions on the proposed design of the Safeguard Mechanism Reforms. The South Australian Chamber of Mines and Energy (SACOME) appeared to oppose key components of the Australian Government’s reforms in its February 24 submission on the proposed design of the mechanism. SACOME called for a delayed implementation of the reforms and for “far greater” financial assistance to EITE facilities. ​Both the Australian Petroleum Production and Exploration Association (APPEA) and Woodside called for expanded support for emissions intensive facilities and supported the proposed price cap on Australian Carbon Credits, while APPEA also advocated for further cost containment measures. ​​​

Carbon Market Institute supports Australian Safeguard Mechanism Reforms and EPBC Act

03 March 2023

The Carbon Market Institute actively supported the proposed reforms to the Safeguard Mechanism in its February 27th submission, advocating for the ratcheting of baseline decline rates from 2030 and the expansion of the scheme. Further, in a statement on the Safeguard Mechanism Reforms at the 27-28th February Senate Standing Committee Public Hearing on the Safeguard Mechanism (Crediting) Amendment Bill, CMI actively supported the policy, calling for broader coverage of the scheme. CEO John Connor also appeared to express support for a "budget approach" to limit future fossil fuel investment. CMI Director Kurt Winter went on to issue support for the implementation of a climate trigger in the Environment Protection and Biodiversity Conservation Act.

Industry groups advocate for the passage of the Safeguard Mechanism reforms

03 February 2023

​​News that the main opposition party will oppose Labor’s proposed reform of the Safeguard Mechanism appears to have not been welcomed by industry groups. In an Australian Financial Review article posted on January 31st, the Business Council of Australia CEO Jennifer Westacott stated that it still supported the reforms, as did Ai Group CEO Innes Willox who stated that it was in everyone’s interest for the reforms to pass. The CEO of the Australian Chamber of Commerce and Industry also stated that the legislation must pass ‘for the sake of certainty and the achievement of our emissions' reduction goals’​

Carbon Market Institute welcomes the Albanese Government's draft Safeguard Mechanism Rules

20 January 2023

In a January 10th press release, Carbon Market Institute (CMI) CEO, John Connor, welcomed the release of the Albanese Government’s draft Safeguard Mechanism Rules. Connor stated that the draft Rules were an important step forward in guiding the decarbonization of Australian industry, whilst also emphasizing the need for baseline decline rates to be steepened over time.

Business Council of Australia and Ai Group support Safeguard Mechanism Reforms with exceptions

03 March 2023

A number of Australian companies and industry associations have provided statements on the Safeguard Mechanism Reforms at the 27-28th February Senate Standing Committee Public Hearing on the Safeguard Mechanism (Crediting) Amendment Bill. Both the Business Council of Australia (BCA) and the Ai Group urged the bill to be passed, while stating support for provisions for emissions intensive facilities. The BCA and the Ai Group also opposed demands from the green party to ban new fossil fuel projects.

Orica generally supports Australian Safeguard Mechanism Reforms

03 March 2023

Orica provided a statement on the Safeguard Mechanism Reforms at the 27-28th February Senate Standing Committee Public Hearing on the Safeguard Mechanism (Crediting) Amendment Bill. Orica stated general support for the Safeguard Reforms, although it also advocated for the extension of deemed surrender provisions,

Minerals Council of Australia emphasize need to maintain competitiveness of industry under Safeguard Mechanism Reforms

20 January 2023

In a January 11th Sydney Morning Herald article, Minerals Council of Australia CEO, Tania Constable, appeared to emphasize the need to keep trade-exposed export industries strong and competitive under reforms to Australia’s Safeguard Mechanism.

Minerals Council of Australia advocates to lower price cap on carbon credits under Safeguard Mechanism

13 January 2023

Minerals Council of Australia CEO, Tania Constable, has welcomed the inclusion of a cost-containment measure in the Australian government’s proposed Safeguard Mechanism reforms, as reported on January 10th by the Australian Financial Review. Constable appeared to advocate for a lowering of the price cap on Australian Carbon Credit Units to $50, stating that the $75 figure was still relatively high.

Entities Engaged on Policy

The table below lists the entities found to be most engaged with the policy. InfluenceMap tracks over 400 companies and 200 industry associations globally. Each entity name links to its full InfluenceMap profile, where the evidence of its engagement can be found.

Influencemap Performance BandOrganizationEngagement Intensity
E+Australian Petroleum Production & Exploration Association (APPEA)43EnergyOceania
D-Minerals Council of Australia (MCA)49Metals & MiningOceania
CAustralian Industry Group (Ai Group)56All SectorsOceania
BCarbon Market Institute45All SectorsOceania
A-Clean Energy Council39EnergyOceania
C+AGL Australia39UtilitiesOceania
CAustralian Energy Council43EnergyOceania
E+Australian Chamber of Commerce & Industry20All SectorsOceania
D-Woodside40EnergyOceania
DSouth Australian Chamber of Mines and Energy20Metals & MiningOceania
C-Ampol Limited (formerly Caltex Australia)11EnergyOceania
D+BHP38Metals & MiningOceania
E-Whitehaven Coal21Metals & MiningOceania
D+Anglo American23Metals & MiningEurope
E+Association of Mining and Exploration Companies24Metals & MiningOceania
D+Rio Tinto Group39Metals & MiningEurope
ENSW Minerals Council32Metals & MiningOceania
D+Virgin Australia7TransportationOceania
C-Bluescope Steel35Metals & MiningOceania
D-Chamber of Minerals and Energy of Western Australia (CME)27Metals & MiningOceania
D+South3215Metals & MiningOceania
C-Gas Energy Australia19EnergyOceania
DEnergy Users Association of Australia25EnergyOceania
C-Business Council of Australia53All SectorsOceania
E+Australian Institute of Petroleum10EnergyOceania
C-Origin Energy44EnergyOceania
CBP61EnergyEurope
D+Australian Pipelines and Gas Association19EnergyOceania
CEnergy Networks Australia16EnergyOceania
A-Energy Efficiency Council27EnergyOceania
D-Glencore International31Metals & MiningEurope
DTamboran Resources13EnergyOceania
C-Fortescue Metals Group29Metals & MiningOceania
DBeach Energy10EnergyNorth America