The proposed revamp of the Safeguard Mechanism, Australia’s main policy to regulate corporate emissions, risks repeating past mistakes through loopholes that can be exploited by big polluters, says Greenpeace Australia Pacific.

The details were announced by Climate and Energy Minister Chris Bowen in Gladstone today, following a consultation process beset by heavy-handed lobbying from the fossil fuel industry.

Glenn Walker, Head of Advocacy and Strategy at Greenpeace Australia Pacific, said the Safeguard Mechanism must be significantly strengthened and rule out handouts to the fossil fuel industry.

“While it’s an improvement on the Coalition’s failed policy, the revised Safeguard Mechanism is still a licence to pollute. There’s a lot of work to be done to make it fit for purpose, including closing some loopholes you could drive a coal train through,” he said.

“We need the Federal Government to raise its ambition and bring Australia’s big corporate polluters to heel. This includes capping the use of offsets and setting a zero emissions baseline for new entrants. 

“It’s imperative that Minister Bowen does not give any of the $600 million earmarked for ‘trade exposed’ industries to fossil fuel companies. Coal and gas companies got us into this mess and Australian taxpayers should not pay to bail them out of it.

“It’s good that the Federal Government has ruled out use of dodgy international offsets, but we’re concerned about the proposed unfettered access to Australian offsets, which have serious integrity issues. This means corporate polluters can buy carbon offsets to avoid and delay actually reducing or removing harmful greenhouse gas emissions in their own operations.

“Massive new entrant gas projects like Woodside’s Burrup Hub could blow Australia’s emissions baseline out of the water under the current policy proposal. This places an unfair burden on other Australian businesses and sectors, which would need to do more heavy lifting to reduce emissions.”

Greenpeace Australia Pacific’s recommendations for a strong, effective Safeguard Mechanism:

  1. Set an ambitious emission reduction target to 2030, falling year-on-year: In order to meet the Paris Agreement 1.5 degree target, the Safeguard Mechanism emission reduction target must be set to a baseline of 57Mt in 2029-2030. 
  2. Zero emissions baseline for new entrants: To ensure an equitable and effective policy, the emissions baseline set for new facilities entering the scheme must be set to zero.
  3. No special treatment or complex arrangements: There should be no favourable treatment or complex special emissions calculations for specific companies like Woodside Energy, including multi-year monitoring. The coal and gas industry should not receive any “trade exposed” assistance.
  4. Disallow Australian carbon offsets (ACCUs) for coal, gas and oil companies: Fossil carbon kept underground is far more stable than carbon actively cycling between the land, ocean and atmosphere. The priority should therefore be to keep the fossil carbon in the ground and not equate this with land-based carbon offsets. For this reason coal, gas and oil companies – the primary global drivers of climate change – should not be permitted to use Australian Carbon Credit Units (ACCUs) as part of the scheme and should be forced to use Safeguard Mechanism Credits (SMCs) instead.


Climate Council. 2016. Land carbon: no substitute for action on fossil fuels.