Safeguard Mechanism Update

The Safeguard Mechanism was amended in March 2019. Calculated baseline applications have been simplified by giving businesses the option to use prescribed production variables and default emissions intensity values (collectively referred to as ‘default values’). In March 2020, the majority of default values were included in Schedules 2 and 3 of the Safeguard Rule.

The Department of Industry, Science, Energy and Resources (the Department) has worked closely with industry to develop additional default values for remaining Safeguard-covered sectors. The Department has now released an exposure draft of the National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment (Additional Prescribed Production Variables) Rule 2020 (the Amendment Rule), which would have the effect of:

  • setting default values for the majority of remaining sectors;
  • inserting corresponding default emissions intensity values for some prescribed production variables included in the Safeguard Rule in March 2020, which did not have a default emissions intensity value; and
  • updating all default emissions intensity values to incorporate revised global warming potentials from the Intergovernmental Panel on Climate Change’s Fifth Assessment Report, which apply under the National Greenhouse and Energy Reporting scheme from 1 July 2020.

Accompanying the Amendment Rule are an Explanatory Document and a document setting out additions to the Safeguard Mechanism: Prescribed production variables and default emissions intensities document, which details the types of emissions included in the default emissions intensity calculations. The consultation documents and information on how to make a submission are available here.

Public consultation ends on 28 August 2020.

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