New modelling commissioned by the Climate Council and the Australian Conservation Foundation (ACF) shows the way the federal government deals with coal and gas in the Safeguard Mechanism will determine whether its reforms succeed or fail.

The modelling, undertaken by RepuTex, shows emissions from just 16 proposed new coal and gas projects, including Woodside’s ultra-polluting Scarborough gas project, is equal to one-quarter of overall emissions reductions the Safeguard Mechanism currently aims to achieve this decade.

“If we don’t get the settings right, new coal and gas will eat a large and growing share of the Safeguard Mechanism’s emissions budget in the years ahead,” Dr Jennifer Rayner, Climate Council Head of Advocacy said.

“Worse, if the production of coal and gas is even a little higher than the government has predicted, this risks blowing the carbon budget entirely. That’s before taking into account the more than 100 further fossil fuel projects still in the development pipeline.

“Either this would mean Australia fails to meet our 2030 emissions reduction target, or existing facilities would have to cut their emissions by far more to make up the gap – there’s only two ways this can go.”

The modelling shows baseline decline rates of up to 8.9% per year for existing polluters covered by the Safeguard Mechanism may be needed by 2030 to keep within the emission budget if fossil fuel production increases.   

The Climate Council and the Australian Conservation Foundation are calling for the federal government to strengthen the Safeguard Mechanism reforms to avoid a fossil fuel emissions blowout by:

  • Making the proposed 1,233 MtCO2e emissions budget for the scheme a hard cap in legislation.
  • Ensuring the scheme prioritises genuine emissions reduction, not offsets to cover up pollution as usual.
  • Making certain new and expanded fossil fuel projects are treated as new entrants with full accountability for their emissions.   
  • Ensuring any new entrants to the Safeguard Mechanism undergo a rigorous environmental assessment under an improved Environment Protection and Biodiversity Conservation Act.

Gavan McFadzean, ACF Climate Change and Clean Energy Program Manager said: “A huge flaw in the proposed Safeguard Mechanism is that it doesn’t distinguish between essential industries that Australia needs to decarbonise – like steel, cement and aluminium – and big polluting industries that should be rapidly phased out, like coal and gas.

“Industries like cement and steel shouldn’t have to do more to compensate for Australia’s biggest fossil fuel polluters.

“The government should prioritise the decarbonisation of future-focused industries, helping Australian businesses, communities and workers to thrive in a world headed to net zero, while rapidly phasing coal and gas out of the economy.”

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