What is the 2026-27 Safeguard Mechanism Review?

What the review covers

• The baseline decline rate after 2030.
• Whether the scheme is doing enough to encourage onsite abatement.
• Whether arrangements for trade-exposed facilities remain suitable.
• Findings from the Carbon Leakage Review.

Setting the post-2030 decline rate is the first item in the review’s published scope.

The current settings

• Baselines decline by 4.9% a year to 2029-30 by default.
• After 2030, the CER shows an indicative decline rate of 3.285% a year, with rates to be set in five-year blocks.
• TEBA determinations can lower the decline rate to as little as 1% for manufacturing facilities and 2% for others, for three years.
• Multi-year monitoring periods must end by 30 June 2030.
• Emissions intensity determinations move facilities fully to default intensities by 2029-30.

Why it matters for responsible emitters

The post-2030 decline rate sets how quickly baselines tighten from 2030-31. That in turn affects whether a facility exceeds or comes in under its baseline, and so its need for ACCUs or its eligibility for SMCs. Several current settings, including multi-year monitoring periods and the emissions intensity transition, run only to 2030.

The consultation paper

DCCEEW released a consultation paper in August 2026 setting out the questions for the review. It is available in PDF and Word formats from the consultation page, which remains the reference point for the Government’s next steps.

What to watch

Consultation has closed. Responsible emitters should watch for the Government’s response, as the review’s outcomes will shape baselines, TEBA arrangements and compliance costs after 2030. Questions about the review go to DCCEEW’s Safeguard Mechanism Taskforce, listed on the consultation page.