Safeguard Mechanism (Crediting) Amendment Bill 2023

The majority voted in favour of agreeing with the amendments made by the Senate to the bill. This means that the bill has now been agreed to in its final form by both houses of parliament and so will now become law.

What does the bill do?

The bills digest, which is a document put together by the parliamentary library, sets out the following key points:

• Proposed revision of the existing ‘Safeguard Mechanism’ applying to Australia’s largest emitters is a central element of the Australian Government’s commitment to achieve a 43% reduction in greenhouse gas emissions by 2030 and net zero by 2050.
• The Safeguard Mechanism commenced operation on 1 July 2016 and has, to date, operated as a greenhouse gas emissions reporting mechanism for around 212 of Australia’s largest industrial facilities.
• The Safeguard Mechanism (Crediting) Amendment Bill 2022 amends relevant Acts to alter the Safeguard Mechanism so that covered facilities must reduce their scope 1 (direct) emissions in future.
• The primary amendments to the National Greenhouse and Energy Reporting Act 2007 and Australian National Registry of Emissions Units Act 2011 establish the administrative architecture to create ‘safeguard mechanism credit units’ (SMCs). The amendments provide for dealings in SMCs in the same manner as Australian Carbon Credit Units (ACCUs).
• Key elements of the revised scheme will be implemented via amendments to existing legislative instruments (rules) made by the Minister. The Clean Energy Regulator (CER) will also be able to make key determinations, as provided for in these instruments.
• Stakeholders have expressed concern about the limited timeframe for consultation and staggered release of key documents (including legislative instruments and the Independent Review of Australian Carbon Credit Units (Chubb Review)), which they regard as limiting a fulsome consideration of the proposed amendments.
• Moreover, whilst environment and climate focused groups have argued that amendments are insufficient, key industry stakeholders acknowledge the need for change but have expressed concern about particular aspects of the proposed amendments.