Safeguard mechanism reforms will provide pathway to lower emissions

The Australian Chamber of Commerce and Industry welcomes proposed changes to the safeguard mechanism to drive down carbon emissions while providing business with much-needed certainty.

“The safeguard mechanism will play an important role in assisting Australia to reach its 2030 emissions reduction target, and net-zero by 2050,” ACCI chief of policy and advocacy David Alexander said.

“The 215 largest facilities covered by the safeguard mechanism should be doing their fair share of the emissions reduction task.

ACCI supports the move towards production-adjusted baselines set on a facility-by-facility basis.

“This recognises that the emissions reduction effort for some facilities is more difficult than others due to location, the nature of production and the current technologies installed at each site,” Mr Alexander said.

“The safeguard mechanism needs to be structured so that facilities are encouraged to lower their emissions intensity, not simply cut production in order to meet targets.”

The use of safeguard mechanism credits will provide an incentive for businesses to exceed carbon-reduction targets, and allow others to buy credits in industries that have limited options for lower-emissions technology.

Emissions-intensive, trade exposed businesses should have tailored treatment in order to remain competitive internationally.

The government today announced $600 million in support through Powering the Regions fund for grants that support decarbonisation efforts.

“The funding will assist emissions-intensive trade-exposed businesses to invest in low-emissions technology and enable them to remain internationally competitive,” Mr Alexander said.

ACCI will oppose an Australian carbon border adjustment mechanism, which will be considered by the government this year.

“A carbon border adjustment mechanism is simply a punitive tax on imported goods that will do little to incentivise investment in low-emissions technology or increase the competitiveness of Australian industry,” Mr Alexander said.

ACCI’s submission on safeguard mechanism reforms can be viewed here.