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Safeguard Mechanism

Greens strengthen climate Safeguard

Because Labor needed The Greens support to pass their Safeguard Mechanism Bill, we were able to secure significant amendments to their original proposal, so now there will be a hard cap on emissions, and the dodgiest offset schemes are now frozen. 

The detail is fairly technical – more is included below – but here are the key takeaways: 

✅ A legislated hard cap on actual emissions that can be ratcheted down. This means actual pollution must decrease, not just be offset.

✅ A pollution trigger which will force the government to assess the impact new coal and gas projects have on the climate.

✅ The dodgiest class of offsets are now frozen and subject to a review – which could take a quarter of future offsets out of circulation and mean companies have to commit to more actual pollution reduction.

✅ New gas fields will have to pay to offset their full emissions from day one, which will significantly increase the financial barriers to opening up new gas.

Many of the 116 projects in the pipeline have been derailed, including the terrible Beetaloo Basin and Barossa climate bombs.

The history of a bad policy

After trashing the 2011 Clean Energy Act with the ‘axe-the-tax’ campaign in opposition, PM Tony Abbott invented the Safeguard Mechanism in 2015. It is essentially an emissions trading scheme that allows big polluters to buy ‘carbon offsets’ if their emissions exceed a certain level. Under the LNP safeguard, emissions jumped by 7%.

In 2022, Labor adopted a suggestion from the Business Council of Australia that they focus on improving the flawed Safeguard Mechanism scheme, rather than risk the LNP running lines about carbon tax during the election. 

Labor’s proposal

As designed by Abbott, the Safeguard Mechanism scheme allowed big polluters to continue to pollute and make enormous profits while pretending to take action on the climate crisis. The reforms proposed by Labor under their version of the scheme did not sufficiently amend the scheme to change this. They still seemed designed to safeguard the profits of the most polluting corporations, particularly in the coal and gas industry. 

Labor’s Bill:

  • Allowed new coal and gas projects to be approved
  • Relied on dodgy carbon offsets to reduce emissions
  • Rewarded companies financially even if their total emissions go up

The cost of paying for offsets was so low that many corporations would simply factor it into their projections, pay the cost and expand their emissions. Analysis from the Parliamentary Library last year showed that for big mining and gas companies to offset their emissions each year to be in-line with the safeguard mechanism the cost would only be 0.1% of their historic profits.

The reforms to Tony Abbott’s Safeguard Mechanism amounted to Labor’s signature piece of climate change legislation. Their Bill would be the framework for years to come, locking us into increased emissions. It would make the problem worse, as I said in a speech to Parliament.



The Greens’ offer

The Greens offered to support Labor’s Bill if they committed to a ban on all new coal and gas. If just one of the 116 new coal and gas projects in the pipeline was approved, we would blow our emissions reductions targets and the climate crisis that has already caused so much devastation and heartache for Australian communities will get worse. 


Labor would not commit to a ban on new coal and gas. Adam Bandt has said “negotiating with the Labor Party is like negotiating with the political arm of the coal and gas industry”. 

Greens’ Amendments

In brief, the Greens secured amendments include:

  1. A hard cap or ceiling on actual or absolute (gross) emissions, which won’t be able to exceed current pollution levels (140 MT per annum), and there will be a decreasing cap over time. Pollution will actually now go down, not up, and the coal and gas corporations can’t buy their way out of it with offsets. This puts a limit on coal and gas expansion in Australia. Actual pollution from safeguard entities was forecast to rise under Labor’s original safeguard, from about 140MT now to between 155-184MT in 2030.
  2. A pollution trigger in the Safeguard Mechanism Bill that will require the Climate Change Minister to test a new or expanded project’s impact on the hard cap and net carbon Budgets. If the assessment finds that the project would contribute to exceeding the cap or Budget, the Minister must consult and recalibrate the rules (such as by limiting ACCUs, reducing the value of ACCUs or adjusting the decline rates of baselines) or impose conditions on new entrants. Using these wide-ranging powers, the Minister could set baselines at zero and ACCU allowance at zero, effectively stopping a project from proceeding. The Minister's action or lack of action would be subject to legal enforcement. Approvals under the EPBC and advice from the Climate Change Authority would trigger the assessment as would assessment of emissions data and forecasts.
  3. All Scope 1 emissions from the Beetaloo gas project will have to be net-zero with Scope 2 and 3 emissions referred to the Ministerial Energy Council. This will be a significant financial barrier in the way of the project proceeding.
  4. All new gas fields for LNG export will need to be net zero CO2 from day one.
  5. The agreement will significantly improve the integrity of ACCUs with a freeze on the most dubious offset class (Human Induced Regeneration) until they are subject to an independent audit. 
  6. The Bill will include a requirement for incentives for onsite abatement and to ensure facilities are encouraged to actually cut pollution.
  7. Corporations will be required to justify their use of offsets if they use offsets for more than 30% of their baseline.
  8. A review by the CCA in 2026-27 will look at the use of offsets and implementing measures to restrict their use if on-site abatement isn’t occurring to satisfactory levels.
  9. The Powering the Regions fund will not be used to fund coal or gas projects. 
  10. The grant funding power the Liberal government used to subsidise fossil fuel projects will be changed in the Act to prevent funding for extracting coal and gas.
  11. Increased methane monitoring, leading to greater coal and gas emissions reductions.
  12. A Climate Change Authority-led sectoral emission reduction plans to make it harder for coal and gas projects to get financed and to support the litigation of greenwashing.
  13. For the first time the Act will require reporting of all types of gases and offset generation use creating greater transparency and pressure on corporations to do more.

Without a complete ban on new coal and gas, the Safeguard Mechanism remains very flawed. But through the work of the Greens, it now represents a genuine step forward, rather than locking in failure and increased emissions. Greenhouse gas pollution will go down, instead of up. 

The Fight Continues 

This isn’t the end of the fight for no new coal and gas, and for a sensible but swift transition from existing fossil fuels. It’s just one more step. The Greens will keep fighting for a ban on coal and gas – but Labor will keep fighting us!

We know the community supports a ban; we know the Senate is willing to act. The only barrier to transformative climate action is Labor - and their fossil fuel donors. 

The coal and gas industry are enormously powerful in this country. From day 1 of these mechanisms coming in, they’ll be looking for new loopholes, they’ll be lobbying for watering this down, they’ll be finding ways to continue to pollute and increase their pollution because of the immense profits they gain from it. One of the big omissions from this Bill is a real plan to account for the emissions from coal and gas exported from Australia. As a community, we need to keep up the pressure on Labor and the fossil fuel industry. 

The Greens’ platform

Despite the fossil fuel industry’s self-serving propaganda to the contrary, we do not need new coal and gas to keep Australia’s economy going. 

At the Federal election last year the Greens proposed a comprehensive plan for the kind of investment in new industries that would drive economic growth, jobs, and prosperity in the absence of new coal and gas projects, including investing in green manufacturing. 

Getting more Greens elected, at every level of government, looks like the only way we can force real action.