Safeguarding fossil fuels - Submission to the Safeguard Mechanism Reforms Consultation
26 September 2022
The Government should release the list of new coal and gas projects (or the amount of emissions from such projects) that were assumed to occur when the feasibility of the 43 percent target was being modelled and how this is managed in the Safeguard Mechanism. [...] In turn, the principles of integrity, transparency and impact should form the foundation of the redesign of the Safeguard Mechanism if the public and industry are to have confidence that it will fairly and legitimately reduce emissions. [...] However, whether such a ‘reserve’ is created at the commencement of the new scheme or if emissions from existing facilities are reduced as new polluters are allowed to enter the scheme, the result is still the same: emissions from new facilities will increase the cost to the rest of the economy of meeting the 43 percent target. [...] Given the high and uncertain price of ACCUs,33 the significant questions about the integrity of the current ACCU supply, and the inevitability that any changes that lead to an increase in the integrity of carbon credits will lead to an increase in the price of those credits, it is sensible that the Government develop a fixed price option for firms that do not meet their emission reduction obligati. [...] While in theory the purchase of an ACCU, as opposed to the payment of a voluntary fixed price to the Commonwealth Government, has the advantage that the ACCU delivers emission reductions as well as a price signal to polluters to change their behaviour, in practice as there is no direct link (and possibly no link at all) between some ACCUs and the emissions recorded in the NIR.