What happens if a Safeguard facility exceeds its baseline?

Surrendering units

The main way to resolve an excess is to surrender Australian carbon credit units (ACCUs) or Safeguard Mechanism credit units (SMCs) through the Unit and Certificate Registry. Each unit reduces the net emissions number by one tonne. Surrenders must be completed by midnight AEDT on 31 March, and the CER recommends lodging at least 10 business days earlier.

Units surrendered beyond what the excess requires cannot be refunded, transferred or carried forward, except in limited error cases.

Other options

• Buy ACCUs from the CER at a fixed price under the cost containment measure, if they cannot be bought for less in the market.
• Apply for a trade-exposed baseline-adjusted (TEBA) determination, due 31 October.
• Apply to borrow up to 10% of the baseline from the following year, due 28 February.
• Apply for a multi-year monitoring period, due 15 November.
• Apply for an exemption declaration if the whole excess was caused by a natural disaster or criminal activity, due 31 October.

Penalties

The primary penalty is the excess tonnes multiplied by the value of a penalty unit. A further 100 penalty units accrue for each day the excess continues, for up to two years from 1 April. The CER publishes the responsible emitters of facilities that have been in an excess emissions situation.

When ACCUs make up 30% or more

If the ACCUs surrendered for a facility equal 30% or more of its baseline, the responsible emitter must give the CER a written explanation of why more onsite abatement was not undertaken.