The Australian federal government expects to deliver 205mn t of greenhouse gas (GHG) abatements from its emissions-intensive trade-exposed (EITE) industry by 2030, according to details of the planned reforms to the safeguard mechanism released in Canberra today.
The proposed plan, which is open for consultation until 24 February, demands that the safeguarded facilities reduce GHGs by an average of 4.9pc/yr to 2030, although operators may alter the pace of reduction through the seven-year programme under certain circumstances. The mechanism is scheduled to take effect on 1 July 2023 and keeps an intensity baseline framework that allows emissions baselines to grow and fall with production. It is part of the government's plan to cut GHG emissions by 43pc of 2005 levels by 2030.
"We know that that 70pc of facilities, representing over 80pc of scheme emissions, already have corporate commitments to net zero by 2050. This reform helps deliver the framework to get there," the federal minister for climate change and energy Chris Bowen said on releasing the details of the safeguard mechanism on 10 January.
The mechanism covers scope 1 emissions by major coal and gas export projects operated by Australian firms BHP, Woodside, South32 and Santos, as well as by Chevron, Switzerland-based trading firm Glencore and UK-South African firm Anglo-American. The top 10 scope 1 GHG emitters under the mechanism also include iron ore and aluminium producer Rio Tinto and steel producers BlueScope Steel and GFG Alliance.
It allows for new gas and coal facilities to be included after 1 July with their baseline set at international best practice to ensure the latest emissions abatement technology is applied. This is opposed by lobby groups, like the Climate Council, that argue that the government should not be encouraging any new fossil fuel developments by helping offset their scope 1 emissions while ignoring the higher scope emissions from burning the fuels.
The Climate Council also questioned the use of the Australian carbon credit scheme, which was found in a recent review to need improving, although it welcomed the removal of international offsets for EITEs to abate emissions.
Bowen also announced an initial A$600mn ($414mn) in funding to support EITEs to transition to lower GHG emissions. He also agreed to tailored treatment for some EITE facilities to ensure that emissions do not leak overseas to jurisdictions with looser emissions regulations.
Facilities covered by the safeguard mechanism contributed 28pc of national emissions in the 2020-21 fiscal year to 30 June.
