Safeguard Mechanism

To drive emissions reduction, the government has committed to implementing meaningful policy change and reformed the Safeguard Mechanism legislation from July 1, 2023.

The Australian Government’s Safeguard Mechanism was introduced in 2016 and places limits on Australia’s largest emitting sites or ‘facilities’. Currently around 215 facilities that emit over 100,000 tonnes of carbon dioxide equivalents (tCO2-e) are covered under the Safeguard Mechanism.

The Safeguard Mechanism is administered through the governments Clean Energy Regulator (CER) via the National Greenhouse and Energy Reporting scheme (NGERs). NGERs provides a framework for Australia’s highest emitting organisations to measure, manage and report on their emissions.

The Safeguard Mechanism covers 28% of Australia’s emissions, usually in complex and hard to abate sectors. This makes it a critical piece of the government’s climate change policy and target to achieve 43% emissions reduction by 2030 and net zero by 2050.

As of July 2023, the Safeguard Mechanism requires facilities to reduce emissions by 4.9% annually and has introduced tradeable safeguard mechanism credit units (SMCs). For reporting entities to maximise the benefits of these – and avoid liability for exceedance, there is now a clear reason to cut emissions faster and harder. 

Large emitters in Australia are increasingly focusing on not just compliance to the Safeguard Mechanism, but also how to strategically navigate the framework to reduce risk and capitalise on opportunities, while navigating the decarbonisation pathway.

Now is the time for large emitters to ensure their decarbonisation strategy is robust and future proof because the pace of change will only accelerate towards 2030 and beyond.

Our team of Australian compliance auditors and strategic advisors is dedicated to helping medium to large businesses achieve their sustainability and decarbonisation goals and comply with the Safeguard Mechanism.

Anthesis has deep expertise in the Safeguard Mechanism and NGERs, advising many of Australia’s largest and most complex sites reporting under the legislation. Our Managing Director was a key member of the Australian Government team that designed and implemented the NGER legislation, and our technical specialists have delivered dozens of complex NGERs and Safeguard Mechanism projects.

We assist reporting entities to understand their legislative obligations, reduce emissions and augment their strategic decision-making. We excel at navigating technically and legislatively complex problems, to ensure our clients are better informed and better prepared for the deep decarbonisation required to achieve Australia’s net zero future. 

Our Safeguard Mechanism audit and advisory services include:

  • Modelling potential emissions reduction trajectories, prioritising decarbonisation initiatives and understanding future capex, opex and production impacts
  • Leveraging grants and subsidies to accelerate decarbonisation and limit capital impact
  • Reporting and compliance support
  • Assisting with policy consultation and submission

The team at Anthesis helps us navigate the complexities of NGERs and the Safeguard Mechanism in Australia. We have been continually impressed with their technical expertise and diligence over the journey to date. Importantly our work together puts Orica in a strong position to both anticipate and respond to evolving climate policies and regulation.

The Anthesis team are a credible, trusted and experienced advisor that has helped Orica turn our ideas into industrial scale emissions reduction.

Troy Powell, Head of Sustainability, Orica

We work with ambitious leaders who want to define the future, not hide from it. Together, we achieve extraordinary outcomes.