Which Facilities Are Covered By The Safeguard Mechanism?

The Safeguard Mechanism covers every facility whose covered emissions exceed 100,000 tonnes of carbon dioxide equivalent (t CO2-e) in a financial year. The law calls these designated large facilities. They are Australia’s largest industrial emitters, across mining, oil and gas, manufacturing, transport and waste.

Key points

The threshold is 100,000 t CO2-e of covered emissions a year
Covered emissions are Scope 1 only
The responsible emitter is the person with operational control
Grid-connected electricity generators share one sectoral baseline
Safeguard data is lodged with the NGER report

What counts as covered emissions

Covered emissions are a facility’s Scope 1 emissions, including emissions from fuel combustion, fugitive sources, industrial processes and waste disposal. Some landfill and electricity generation emissions are excluded. Scope 2 emissions from purchased electricity do not count towards the threshold.

Who carries the obligation

The responsible emitter is the person with operational control of the facility. It must keep the facility’s net emissions at or below its baseline, and resolve any excess by the compliance deadline.

Electricity generators

Grid-connected electricity generators are covered by a single sectoral baseline that applies collectively across Australia’s main interconnected electricity networks.

How it links to NGER

The Safeguard Mechanism runs on NGER data. A Safeguard facility’s covered emissions come from its NGER report, and its Safeguard production data is lodged with that report by 31 October each year.

Facilities that drop below the threshold

A facility that falls below the threshold is no longer a designated large facility for that year. If it meets the eligible facility criteria in the Safeguard Rule, it can still be issued Safeguard Mechanism credit units.

Why it matters

The Clean Energy Regulator describes the Safeguard Mechanism as Australia’s principal policy for reducing emissions from its largest industrial facilities. It supports the national targets of a 43% cut below 2005 levels by 2030 and net zero by 2050, so baselines for covered facilities fall every year.

What a covered facility does each year

Lodges its NGER report and Safeguard production data by 31 October.
Receives a Safeguard position statement from the CER in Online Services, showing its baseline for the year.
Resolves any excess emissions by the 1 April compliance deadline, or applies for SMCs if it came in under baseline.

References & sources

Primary regulatory documents and authoritative references underpinning this answer.