A trade-exposed baseline-adjusted (TEBA) determination lowers a trade-exposed facility’s baseline decline rate for three financial years, in place of the default 4.9% a year. It is designed for facilities where meeting the baseline would be costly relative to the size of the business.
Key points
- Lower decline rate for three financial years
- Primary production variable must be trade exposed
- Assessed cost impact must exceed 3%
- Lowest rates: 1% for manufacturing, 2% for others
- Due 31 October with an audit report
Who is eligible
- The facility’s covered emissions exceed its hypothetical baseline in the first financial year.
- Its primary production variable is trade exposed, as listed in Schedule 2 of the Safeguard Rule.
- Its assessed cost impact for the first financial year is greater than 3%.
- It has no multi-year monitoring period or borrowing adjustment for that year.
- Its covered emissions were not artificially inflated to qualify.
The cost impact test
The assessed cost impact is the cost of the facility’s excess emissions at a default price, divided by its revenue. For a manufacturing facility, the divisor is earnings before interest and taxes (EBIT) instead of revenue.
What it changes
The facility receives its own decline rate. The lowest possible rate is 1% for a manufacturing facility and 2% for other facilities.
How to apply
Applications are due by 31 October after the end of the first financial year and must include an independent audit report. The CER aims to decide within 60 days of a complete application. A TEBA determination can be voluntarily revoked, with requests also due by 31 October.
What the audit must cover
The independent audit report provides assurance on the facility’s financial data, its covered emissions, the trade-exposed classification of its production variable and the cost impact calculation.
How it fits with other options
A TEBA determination cannot run in the same year as a multi-year monitoring period or a borrowing adjustment, so a facility needs to choose the option that suits its position. The CER publishes the list of trade-exposed baseline-adjusted facilities each April. Arrangements for trade-exposed facilities are also within scope of the 2026-27 Safeguard Mechanism Review.
References & sources
Primary regulatory documents and authoritative references underpinning this answer.
- Clean Energy Regulator: TEBA determination application guidelinecer.gov.au
- Clean Energy Regulator: Managing excess emissionscer.gov.au
- Clean Energy Regulator: Safeguard datacer.gov.au
- Federal Register of Legislation: National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015legislation.gov.au