The federal government has seemingly secured the support it needs to implement its Safeguard Mechanism legislation after reaching a deal with the Greens that will put a hard, declining cap on emissions in the industrial sector, and places some new restrictions on new coal and gas projects but falls short of explicitly ruling them out.
In separate statements, Federal Energy Minister Chris Bowen and Greens leader Adam Bandt confirmed the two parties had come to an agreement on changes to the proposed Safeguard Mechanism Bill that is seen as central to the federal government meeting its 43% emissions reduction target by 2030.
The Greens had previously demanded, as a condition of supporting the bill, the government commit to no new coal and gas projects but the government has repeatedly rejected the request.
Greens leader Adam Bandt said the two parties have however now agreed to a suite of reforms to the proposed legislation, including the introduction of a hard emissions cap, or ceiling, on actual or absolute emissions, which won’t be able to exceed current pollution levels and will decrease over time.
Bandt said the hard cap “puts a limit on coal and gas expansion in Australia”, making it unviable for “about half” of the 116 new coal and gas projects in the pipeline because they would be unable to get their emissions below the limit.
“Coal and gas have taken a huge hit,” he said. “Real pollution must actually come down and the coal and gas corporations can’t buy their way out of the cap with offsets.”
Bandt said the bill will also include a pollution trigger that will require the climate change minister to test the impact of new or expanded projects against the country’s cap and net carbon budgets.
“For the first time in history, new projects must be assessed for their impact on climate pollution, and they can be stopped,” he said.
Another key amendment will see expansions to existing gas projects treated as new facilities, and therefore given a net zero baseline for the carbon emissions in the new fields. Another reform will ensure public funding through the Powering the Regions Fund is not directed to coal and gas projects and only supports future-focused industries.
Bowen said the finalisation of the Safeguard Mechanism Bill was a key milestone in achieving Australia’s 43% emissions reduction target by 2030.
“Today, we are a step closer to achieving net zero by 2050,” he said. “We thank those across the Parliament who continue to approach this legislation in a constructive way to ensure accountability, transparency and integrity for the scheme, and ensure flexibility and support for industry.”
“These reforms are crucial to our climate and our economy – supporting Australian industry and ensuring they will continue to be competitive in a decarbonising world.”
The changes agreed to by Labor and the Greens build on previously confirmed design features of the Safeguard Mechanism, including the creation of Safeguard Mechanism Credits which will enable large industrial facilities to earn credits when they reduce their emissions below their baselines.
Bowen said the government will finalise the further amended Safeguard Rules next month with the law expected to be in operation as of 1 July, 2023.
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