Safeguard Mechanism (Crediting) Amendment 2022

✦ Plain-English Summary

# Safeguard Mechanism (Crediting) Amendment 2022

**What it does**
This law tightens Australia's emissions reduction system by setting hard caps on how much greenhouse gas large industrial facilities can emit. If a factory, power station or similar big polluter exceeds its baseline emissions limit, it must buy carbon credits to offset the excess—or face penalties. The law also aims to make sure total emissions from these facilities keep dropping year on year.

**Why it matters**
Australia's committed to cutting emissions, and this puts real teeth into that commitment by forcing major polluters to either clean up their operations or pay for it. It's essentially Australia's main tool for holding big industry accountable to climate targets without banning businesses outright.

**Key details**
- The law applies to "designated large facilities"—think coal-fired power plants, cement factories, and major industrial operations that cross a certain emissions threshold
- Facilities get individual baselines (limits) set by the government; they can't exceed these without buying offsets
- The changes come into effect the day after the law receives Royal Assent (it's already passed parliament)
- It connects to a broader emissions registry system and the Clean Energy Regulator, which oversees compliance and can issue penalties for breaches

Official Description

Amends the: National Greenhouse and Energy Reporting Act 2007 to create safeguard mechanism credit units (SMCs) and provide for related registration, transfer and compliance arrangements consistent with the treatment of Australian Carbon Credit Units (ACCUs); Income Tax Assessment Act 1997 to provide that SMCs receive the same tax treatment as other specified units; Australian National Registry of Emissions Units Act 2011 to: provide ownership and transfer arrangements for SMCs; require the publication of information about holdings and cancellations of SMCs; and provide for the making of legislative rules to increase transparency of information on unit holdings or allow for the voluntary surrender of units; Clean Energy (Consequential Amendments) Act 2011 , Clean Energy Regulator Act 2011 and National Greenhouse and Energy Reporting Act 2007 to: provide that protected information includes all information held by the Clean Energy Regulator regardless of when it was obtained; and make consequential amendments; and Carbon Credits (Carbon Farming Initiative) Act 2011 to: enable legislative rules to prevent the regulator from entering into carbon abatement contracts that reduce covered emissions of facilities covered by the safeguard mechanism; require the regulator to consider the safeguard mechanism when assessing the regulatory additionality of proposed offsets projects; and make a consequential amendment.

Committee Referrals

Senate Environment and Communications Legislation Committee; Senate Standing Committee for the Scrutiny of Bills

Full bill PDF →APH page →

Audit History

Introduced

30 Nov 2022

Last updated on APH

10 Apr 2026

Outcome date

11 Apr 2023

Last checked by Crossbench

yesterday

Full text indexed

yesterday

How Parliament Voted

Senate30 Mar 2023

Safeguard Mechanism (Crediting) Amendment Bill 2023 - Third Reading - Pass the bill

AYES

–

NOES

FAILED

Constituent votes

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