Authoritative answers about Australia’s Safeguard Mechanism under the National Greenhouse and Energy Reporting Act 2007. Covers emissions baselines, the 4.9% annual decline rate, Safeguard Mechanism Credits (SMCs), ACCUs, and compliance obligations for facilities emitting more than 100,000 tonnes of CO2-e annually.
Australia’s Safeguard Mechanism under the National Greenhouse and Energy Reporting Act 2007. Covers emissions baselines, the 4.9% annual decline rate, Safeguard Mechanism Credits (SMCs), ACCUs, and compliance obligations for facilities emitting more than 100,000 tonnes of CO2-e annually.
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A Safeguard borrowing adjustment lets a facility raise its baseline for one year by up to 10% of its unadjusted baseline, with the amount…
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Emissions baselines define the maximum allowable emissions for a facility each year under the Safeguard Mechanism. They are calculated using the formula: Baseline =…
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A facility's net emissions number starts with its covered emissions from its NGER report, less any ACCUs and SMCs surrendered, plus any ACCUs issued…
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Safeguard Mechanism credit units (SMCs) are tradeable credits issued to a responsible emitter for each tonne of carbon dioxide equivalent by which a facility's…
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Safeguard Mechanism dates follow the financial year to 30 June. NGER reports with Safeguard production data are due 31 October, along with TEBA, emissions…
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If a facility's net emissions exceed its baseline, it is in an excess emissions situation. The responsible emitter must resolve it before 1 April…
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A multi-year monitoring period (MYMP) assesses a facility's net emissions against its baseline over two to five financial years instead of each year. It…
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An emissions intensity determination (EID) lets an existing Safeguard facility calculate its baseline from a blend of its own historical emissions intensity and the…
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A trade-exposed baseline-adjusted (TEBA) determination gives an eligible trade-exposed facility a lower baseline decline rate for three financial years. A key test is that…
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An Emission Reduction Contribution (ERC) is a declining multiplier applied to a facility’s baseline to ensure cumulative reductions in allowable emissions over time. It…
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The 2026-27 Safeguard Mechanism Review is the Australian Government's review of the scheme, led by DCCEEW. It covers the post-2030 baseline decline rate, incentives…
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The default baseline decline rate under the Safeguard Mechanism is 4.9% per annum from FY2023–24 through FY2029–30. These reductions apply uniformly across most covered…
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The Safeguard Mechanism is a legislative tool under the National Greenhouse and Energy Reporting Act 2007, introduced to ensure Australia's largest emitters contribute proportionally…
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The Safeguard Mechanism cost containment measure lets a responsible emitter with excess emissions buy ACCUs from the Clean Energy Regulator at a fixed price.…
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Only in narrow cases. The Clean Energy Regulator can make an exemption declaration that no excess emissions situation exists if the whole excess was…
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Facilities are covered by the Safeguard Mechanism when their Scope 1 covered emissions exceed 100,000 tonnes of carbon dioxide equivalent in a financial year.…
Beyond a glossary
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Book a friendly callSafeguard Mechanism credit units (SMCs) are tradeable credits issued to a responsible emitter for each tonne of carbon dioxide equivalent by which a facility's emissions come in under its baseline. They can be held, sold, or surrendered to reduce a facility's net emissions.
An emissions intensity determination (EID) lets an existing Safeguard facility calculate its baseline from a blend of its own historical emissions intensity and the industry default. The facility's own share phases out each year until only the default applies from 2029-30.
Only in narrow cases. The Clean Energy Regulator can make an exemption declaration that no excess emissions situation exists if the whole excess was caused directly by a natural disaster or criminal activity. Applications are due by 31 October after the monitoring period.
The 2026-27 Safeguard Mechanism Review is the Australian Government's review of the scheme, led by DCCEEW. It covers the post-2030 baseline decline rate, incentives for onsite abatement and arrangements for trade-exposed facilities. DCCEEW's public consultation closed on 18 September 2026.
Facilities are covered by the Safeguard Mechanism when their Scope 1 covered emissions exceed 100,000 tonnes of carbon dioxide equivalent in a financial year. These are called designated large facilities, and the person with operational control of each one is its responsible emitter.
Safeguard Mechanism dates follow the financial year to 30 June. NGER reports with Safeguard production data are due 31 October, along with TEBA, emissions intensity determination and exemption applications. Excess emissions must be resolved by 1 April, and the CER publishes Safeguard data on 15 April.
A trade-exposed baseline-adjusted (TEBA) determination gives an eligible trade-exposed facility a lower baseline decline rate for three financial years. A key test is that the cost of the facility's excess emissions exceeds 3% of its revenue, or 3% of its earnings before interest and taxes for manufacturers.
A Safeguard borrowing adjustment lets a facility raise its baseline for one year by up to 10% of its unadjusted baseline, with the amount repaid from the next year's baseline plus interest. For 2025-26 onwards, the repayment is the borrowed amount plus 10%.
A multi-year monitoring period (MYMP) assesses a facility's net emissions against its baseline over two to five financial years instead of each year. It is available to facilities with a credible plan to cut emissions intensity, and every MYMP must end by 30 June 2030.
The Safeguard Mechanism cost containment measure lets a responsible emitter with excess emissions buy ACCUs from the Clean Energy Regulator at a fixed price. The price for 2026-27 is $87.72, indexed each year to CPI plus 2%, and the ACCUs must be surrendered immediately.