The Safeguard Mechanism is an Australian Government policy that sets facility-level emissions baselines for the country’s largest industrial emitters and requires them to keep net emissions at or below those baselines.
It was reformed significantly in July 2023, introducing declining baselines that require covered facilities to reduce emissions by approximately 4.9% per year on average through to 2030, in line with Australia’s national emissions targets.
The Safeguard Mechanism applies to any facility reporting 100,000 tonnes of CO₂-e or more in direct (Scope 1) emissions under NGER in a given year. Covered sectors include mining and resources, oil and gas, manufacturing, waste, and other heavy industry.
Facilities that exceed their baseline must surrender ACCUs or SMCs. Facilities that manage their emissions well and come in below baseline can generate SMCs – tradeable credits that can be sold to other covered facilities, creating a genuine financial incentive to decarbonise ahead of the curve.
We help Safeguard-covered facilities understand their baseline trajectory, develop compliance strategies, and evaluate carbon offset options where reduction alone is insufficient.
