Regulation Impact Statement – Department of the Environment and Energy
On 6 March 2019, the Government registered and published the National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment Rule (No. 1) 2019 to amend the Safeguard Mechanism.
The Safeguard Mechanism was established as part of the Emissions Reduction Fund (ERF). The ERF provides an incentive for activities that count towards meeting Australia’s international climate commitments. The Safeguard Mechanism complements the emissions reduction elements of the ERF by sending a signal to businesses to avoid large unconstrained increases in emissions beyond business-as-usual levels. It achieves this by placing a legislated obligation on Australia’s largest greenhouse gas emitters to keep net emissions below their emissions limit (or baseline). The amendments are designed to:
- bring baselines up-to-date by transitioning all facilities to calculated baselines over 2018-19 and 2019-20
- give businesses the option to use Government-determined prescribed production variables and default emissions intensity values for calculating baselines
- allow baselines to be adjusted annually for actual production where facilities use eligible production variables, so they continue to reflect facility circumstances.
A Regulation Impact Statement (RIS) was prepared and certified by the Department of the Environment and Energy under the Australian Government’s best practice regulation requirements, and has been assessed as compliant and consistent with best practice by the Office of Best Practice Regulation (OBPR).
The RIS estimates the average annual regulatory cost saving at $117,000 over a ten year period.