The Greens have used a parliamentary report to make clear that a key Labor climate policy – revamping the safeguard mechanism – will fail unless the Albanese government agrees to change its plan.
In a dissenting report to a Senate committee inquiry released on Monday night, the Greens concluded the changes to the safeguard mechanism should not be introduced in their current form “given the danger that new coal and gas projects pose to a stable climate and safe society”.
The minor party had previously offered to pass the legislation if the government agreed to ban new fossil fuel developments, but described its position as an “offer, not an ultimatum”.
The safeguard mechanism applies to 215 major industrial and resources polluting facilities responsible for about 30% of national greenhouse gas emissions. Under Labor’s changes, those companies would need to cut greenhouse gas emissions intensity – how much they emit per unit of production – by 4.9% a year.
The safeguard mechanism was introduced by the Coalition in 2016. It was promised to put a limit on greenhouse gas emissions from about 200 major industrial facilities.
It applies to facilities that emit more than 100,000 tonnes of carbon dioxide equivalent a year. Each facility is set an emissions limit, known as a baseline.
The Coalition said companies that emitted above their baseline would have to buy carbon offsets or pay a penalty. In practice, facilities were allowed to change their baselines, few were penalised and industrial emissions continued to increase.
Labor plans to revamp the scheme.
It would set new baselines based on emissions intensity – how much a facility releases per unit of production. Baselines will be reduced by 4.9% a year.
Companies could choose whether to make onsite emissions cuts or buy Australian carbon credit units.
New polluting facilities, including gas and coalmines, could open and would be set baselines at “international best practice”.
Companies that emit less pollution than their baseline allows would be awarded a new type of “safeguard credit”. These within-scheme credits could be sold to other polluting facilities that emit more than their baseline and need offsets.
Labor wants the changes to start on 1 July 2023.
Speaking earlier, Greens leader Adam Bandt said an analysis by RepuTex – a consultancy that Labor used to model its climate policies before the 2022 federal election – had found there would be an emissions “blowout” under the safeguard.
The report, commissioned by the Climate Council and the Australian Conservation Foundation, found that if proposed fossil fuel projects that had already reached financial commitment stage went ahead and emitted at expected levels, the government would still meet its emissions target for the scheme, but if production at those developments was higher than forecast due to greater than expected demand for exports, it could push pollution beyond the government’s goal.
Bandt said the Greens would continue to have discussions about the safeguard mechanism “in good faith”, but the government would “need to shift a bit if they want to get legislation through the Senate”.
“The one thing we haven’t yet heard a satisfactory answer to publicly from the government, is why they want to keep opening up new coal and gas mines,” he said.
The climate change minister, Chris Bowen, has said the government was open to changes to the safeguard that were not at odds with Labor’s election commitments, which included not banning privately financed coal and gas developments that met local environmental requirements.
The Greens said they were open to other ways of dealing with coal and gas other than an outright ban, including pausing new fossil fuel developments until separate changes to national environment laws were considered later this year. They want to include a climate trigger, which would require the environment minister to formally consider a project’s climate impact before approving a major development.
Debate over the government’s legislation – which will turn the safeguard into an emissions trading scheme – is expected in the House of Representatives this week. Other parts of Labor’s plan will be implemented through regulation. The government wants to pass its bill this month through the Senate, where it needs the support of the Greens and at least two other crossbenchers, ahead of a 1 July start.
In his comments in the Senate inquiry report, the independent senator David Pocock said he believed Labor’s plan should be introduced subject to the government agreeing to several changes.
They included the inclusion of “an absolute cap” on emissions to ensure that the government’s goal of no more than 1,233m tonnes of CO2 was released from the facilities covered by the scheme between 2021 and 2030. He also called for more exacting conditions to be placed on new fossil fuel developments, including that they should have to offset all their emissions and be net zero from when they started operating.
Pocock said new fossil fuel developments should not be allowed to use Australian carbon credits created through forest regeneration and other land-based projects, in part due to integrity concerns. Instead, they should have to use new “safeguard credits”, bought from companies that had been rewarded for onsite emissions cuts below their individual pollution limit, he said.
Labor senators used the committee’s majority report to call for the safeguard to be passed. But they said the government should prioritise implementing the recommendations of the Chubb review into the Australian carbon credit system, including amend the legislation so that more information about forest regeneration and other projects could be quickly made public.
In a separate dissenting report in the inquiry, Coalition senators repeated their opposition to the legislation. They said the changes had not been properly assessed and it was not clear “what costs will be passed on to consumers”.
• This article was amended on 8 March 2023 to clarify the point of the RepuTex report referred to by Adam Bandt.
