The Albanese Government is reviewing the Safeguard Mechanism to ensure it continues to deliver the emissions reductions Australia needs while supporting a strong and competitive industrial base.
In 2023, when the Government reformed the Abbott Government’s Safeguard Mechanism, we committed to undertaking a review in 2026-27 to assess whether the mechanism was achieving its emissions reduction objectives and remained fit for purpose beyond 2030.
The first two years of operation show the mechanism is working as intended. Gross and net emissions from covered facilities are tracking well, and the scheme remains on course to deliver its proportionate contribution to Australia’s legislated 2030 emissions reduction target.
With Australia now setting its sights on 2035, this review is focused on ensuring the Safeguard Mechanism continues to drive real, durable emissions reductions across Australia’s largest industrial facilities and contributes its fair share to achieving the nation’s emissions targets.
The consultation paper released today seeks feedback on the policy settings needed to support the Safeguard Mechanism’s contribution to the 2035 target, including how to maintain a strong focus on domestic emissions reduction as Australia transitions to net zero.
Policy certainty is critical to the investment decisions required to decarbonise industry and transform Australia’s economy. The review will consider post-2030 settings while providing a clear and stable framework for emissions reduction over the long term.
Importantly, the review is not intended to fundamentally redesign the Safeguard Mechanism. Rather, it will examine how the existing framework can continue to deliver effective emissions outcomes beyond 2030, consistent with its contribution to the 2030 target.
The review will place particular emphasis on domestic abatement, industrial decarbonisation and strengthening Australia’s energy security through greater electrification and the use of Australian renewable energy.
The Safeguard Mechanism Review is scheduled to be completed in early 2027. Feedback on the consultation paper is invited until Friday, 18 September 2026.
The consultation paper can be found here https://consult.dcceew.gov.au/2026-27-safeguard-mechanism-review
