Submission to the Department of Climate Change, Energy, the Environment and Water

Submission to the Safeguard Mechanism Reform consultation on proposed design

ATSE welcomes the opportunity to provide a submission to the Department of Climate Change, Energy, the Environment and Water on the reforms to the Safeguard Mechanism. The process of reforming the Safeguard Mechanism occurs on the back of a recent independent review of the Australian Carbon Credit Unit (ACCU) system led by Professor Ian Chubb and ATSE encourages the Australian Government to implement the findings of that review. ATSE previously contributed a submission to the review of the ACCU system, as well as to the previous consultation on the Safeguard Mechanism.

This submission argues that it is essential that the Safeguard Mechanism is transparent and subject to regular monitoring and reporting, to allow for adjustments to the scheme to meet market and environmental requirements. ATSE welcomes the 4.9% per annum reduction in emissions proposed as part of the reform process and the proposed $75 per tonne cap on ACCUs. The use of carbon credits to abate unavoidable emissions is necessary for many industries but should be limited to those circumstances where it is not currently practical to reduce direct carbon emissions from facilities. Where they are necessary, high-quality international carbon credits should be redeemable in Australia to provide industry with additional carbon abatement options.

ATSE makes the following recommendations for the Australian Government:

Recommendation 1: Engage in clear, continual and transparent monitoring and reporting of the efficacy of the Safeguard Mechanism at reducing carbon emissions, and the impacts on local industry.

Recommendation 2: Restrict the use of carbon credits to lower emissions to only those facilities that can demonstrate they have exhausted all current available options to reduce carbon output, and that demonstrate a plan towards medium- and long-term emissions reduction.

Recommendation 3: Co-invest in emissions-reduction upgrades for Australian industry.

Recommendation 4: Implement the recommendations of the Independent Review of Australian Carbon Credit Units prior to allowing the use of ACCUs under the Safeguard Mechanism.

Recommendation 5: Restrict access to carbon credits to existing facilities; require all new facilities entering the Safeguard Mechanism to meet emissions targets through low emissions technologies or processes.