Emissions to be slashed under promised reforms
11 January 2023 at 6:05 pm
The sector says net zero is at risk under the government’s proposal, but a consulting firm says some businesses are already taking steps to curb the climate crisis.
Big polluters will be forced to drastically cut their emissions under the federal government’s proposed changes to the safeguard mechanism.
Minister for Climate Change and Energy Chris Bowen announced the government’s long promised reforms to the safeguard mechanism, saying that the changes will “ensure that Australia’s industries are fit for purpose in reducing emissions”.
Under the plan, which is currently out for consultation, 28 per cent of emissions reductions will come from safeguards.
“We’ve decided that we will require safeguard facilities to do their fair share – 28 per cent of emissions come from safeguard facilities. We’ll require 28 per cent of emissions reduction to come from safeguard facilities,” Bowen said at the announcement of the plan.
Big polluters will be expected to curb their emissions by 4.9 per cent each year by 2030.
According to the government, the reforms will deliver 205 million tonnes of abatement by the end of the decade.
Trade-intensive businesses will be able to access $600 million from the Powering the Regions Fund for decarbonisation and investment in new technologies.
Businesses will earn tradable credits when their emissions are below their baseline, and businesses that face higher abatement costs will be able to buy credits from others if it’s cheaper than reducing their own emissions.
At the same time, access to Australian Carbon Credit Units (ACCUs) will continue unchanged.
See more: The carbon credits review focused on transparency, but has it missed the mark?
The price of ACCUs will be capped at $75 per tonne in 2023-24, increasing with the CPI plus 2 per cent each year.
The reforms are set to begin on 1 July.
Bowen described the plan as “pro climate, pro-industry, pro-competitiveness”.
Net zero at risk
The Australian Conservation Foundation (ACF) said allowing unlimited access to offsets and credits would “continue to facilitate an increase in climate-heating emissions from Australia’s biggest polluters”.
“This redesign significantly improves on the Coalition’s safeguard mechanism in several respects, but we can’t offset our way to net zero,” said ACF’s climate change program manager Gavan McFadzean.
See more: Safeguard mechanism reform needed urgently: ACF
“Unlimited offsets allow big, publicly listed companies like Woodside, Glencore and Santos – which have done more than enough climate damage already – to pay to keep polluting. Unlimited offsets puts net zero by 2050 at risk and that means unlimited extreme climate events for Australia.
“ACF urges the government to revise its design so the safeguard mechanism can actually become an effective scheme to cut emissions from Australia’s major polluters.”
A path for businesses to take action
Franziska Curran, principal at climate change and sustainability consultant Ndevr Environmental, said businesses set to be impacted by the reforms now need to devise a plan for how they will hit their emissions reduction targets.
“That will really influence what decisions they can make around technologies to install and when to do it,” she told Pro Bono News.
She said although the government would need to release further details on variables and treatment for different industries, businesses now have their work cut out for them.
“[This] has to happen to be in line with Australia’s [climate] commitments. The writing was on the wall, so to speak,” she said.
Curran added that many businesses were already taking action on emissions abatement and reduction through voluntary schemes based on climate science.
“There’s a unique opportunity for those industry leaders who already know they’re going to reduce their emissions to sort of step forward and say, hey, look, we’re committed to do better than this. For those companies, the safeguard provides this additional incentive and penalty that supports people who are [making] really earnest efforts to reduce emissions rapidly,” she said.
“And over time, I think we’ll see more safeguard facilities reduce emissions rapidly, not just because of the safeguard, but because of their own company’s net zero target.”
Consultation on the safeguard mechanism is open until 24 February and further information is available online.
