Movement on Climate Change Policy

Author: Dr. Sandra Eady

The last few months have heralded much welcome progress on policy to support Australia’s 2050 net zero emissions target. The Federal Government is taking a two-pronged approach - setting a “safeguard mechanism” that will require large emitters to reduce or offset emissions, and supporting a high integrity offset market.

The safeguard mechanism applies to facilities with scope 1 emissions of more than 100,000 tonnes CO2-eq per year. These businesses are already reporting to National Greenhouse and Energy Reporting (NGER), and will now be set a hard baseline (which reduces each year by about 4.9%) against which they need to operate. Initially, the baseline will be current site-specific emissions but over time this moves to an industry average baseline. Businesses that do better than their baseline can sell credits to other businesses who overshoot their emissions cap. The safeguard mechanism will initially cover about 215 entities producing 28% of Australia’s emissions.

The second policy prong is to strengthen the integrity of Australian carbon credit unit (ACCU) offsets generated under the Emissions Reduction Fund. The recent review of the Fund has identified several changes that will strengthen integrity: cessation of offsets generated by landholders opting not to clear land for which they hold a permit to clear, strengthening the evidence link between land management changes and revegetation, and stronger benchmarks for waste facility emissions reductions.

The third prong will be business response to these policies, and this is where the LCA community can provide support, giving advice backed by robust metrics. While legislation is yet to be passed and recommendations adopted to implement these policies, we at Lifecycles are excited to see such a strong move towards evidence-based change with an increased level of integrity of the metrics behind carbon offsets.