The Safeguard Mechanism is one of the Australian Government’s main policies for regulating greenhouse gas emissions from large industrial facilities, including coal and gas projects, mines and heavy industry.

In 2026, the Australian Government reviewed how the Safeguard Mechanism has operated since major reforms took effect in 2023.

EJA’s submission to the 2026–27 Safeguard Mechanism Review argues the scheme is not delivering the deep, rapid and sustained emissions reductions needed from Australian industry, and needs reform to drive genuine onsite emissions cuts and decarbonisation.

A summary of key submissions

Prioritise real, onsite emissions cuts

Companies can currently meet their Safeguard obligations by buying carbon credits rather than reducing emissions at their facilities. In 2024-25, facilities used 10.8 million tonnes of carbon credits for compliance, compared with just 0.5 million tonnes of onsite emissions reductions.

EJA recommends progressively limiting the use of carbon credits and phasing out land-sector credits by 2035.

Strengthen the integrity of carbon credits

EJA argues land-based carbon credits cannot permanently compensate for fossil fuel emissions and should not become an indefinite alternative to cutting pollution at its source.

The rules should also ensure Safeguard Mechanism Credits are only issued where companies can demonstrate genuine onsite emissions reductions, rather than changes caused by temporary shutdowns or emissions accounting.

Close loopholes for coal and gas projects

Major expansions of existing coal and gas operations can avoid stricter “international best practice” emissions requirements because they are not always treated as new facilities.

EJA recommends changing the rules so new developments and expansions capable of using cleaner technologies face stronger emissions standards.

Better address methane pollution

EJA argues the Safeguard Mechanism understates the climate impact of methane and does not adequately address problems with measuring fugitive methane emissions from coal mines.

The scheme should better recognise methane’s short-term warming impact and strengthen emissions measurement and regulation.

Require credible plans for cutting emissions

Companies should have to publish plans explaining how and when they will reduce emissions onsite, including how much they expect to rely on carbon credits.

This would help regulators and the public assess whether the scheme is actually driving industrial decarbonisation.

Strengthen the scheme beyond 2030

EJA recommends a stronger 2035 emissions target, faster baseline declines and different treatment for fossil fuel industries that need to be phased out and other industries that need to decarbonise.

EJA also recommends retaining the ban on international offsets and reviewing the Safeguard Mechanism again by 2029-30.

Overall

EJA’s submission argues that the Safeguard Mechanism relies too heavily on carbon credits and does too little to guarantee real emissions reductions from Australia’s biggest industrial polluters.

Reform should focus the scheme on genuine onsite emissions cuts, stronger industrial decarbonisation and greater transparency.

The Safeguard Mechanism also only regulates direct emissions from Australian facilities. It does not address the much larger emissions created when Australian coal and gas exports are burned overseas, meaning broader action to wind down fossil fuel production is also needed.