Australia could issue over 9mn safeguard carbon units

Spanish Market: Emissions
29/11/24

Australia's Clean Energy Regulator (CER) could issue over 9mn safeguard mechanism credits (SMCs) to facilities that reported emissions below their baselines for July 2023-June 2024.

This was 4-6 times higher than previously estimated, the Climate Change Authority (CCA) said in its 2024 Annual Progress Report released late on 28 November. A total of 60 out of 215 facilities covered by the safeguard mechanism reported scope 1 greenhouse gas (GHG) emissions below their baselines and could be eligible to apply for a total estimated 9.2mn SMCs, the CCA said.

Australia's Department of Climate Change, Energy, the Environment and Water (DCCEEW) late last year estimated SMC issuances would start at just 1.4mn units in 2023-24, while the Clean Energy Regulator (CER) indicated issuances would be "relatively modest initially" in September.

The estimates are based on preliminary 2023-24 safeguard data provided by the CER, with the CCA noting the final number of SMCs issued could be affected by possible baseline variations, because of changes in methods used to calculate emissions. The use of flexibility mechanisms, including trade-exposed baseline adjusted (Teba) arrangements and multi-year monitoring periods, will also affect facility baselines and affect the final number of SMCs generated, it added.

"An important ongoing watchpoint will be the extent to which safeguard facilities rely on Australian Carbon Credit Units (ACCUs) and SMCs to meet their declining baselines, as opposed to reducing their onsite emissions," the CCA said.

Preliminary data showed 153 of the 215 covered facilities — or 71pc of the total — had emissions higher than their baselines in 2023-24, by an estimated aggregate amount of 10.7mn t of CO2e. This would be the maximum exceeded volume, the CCA said, although the exact number will be determined once any use of the flexibility mechanisms is finalised by the CER. This will affect the number of ACCUs or SMCs that facilities that went above their baselines will be required to surrender by the 31 March 2025 deadline under the reformed safeguard mechanism.

A total of 219 facilities were under the mechanism in 2022-23, with reported emissions of 138.7mn t of CO2e and ACCU retirements rising to 1.22mn units from 739,000 the previous year. The preliminary data for 2023-24 indicated covered emissions of 135.8mn t of CO2e, down by 2.9mn t of CO2e from the previous year, the CCA said.

By Juan Weik

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29/11/24

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German opposition insists on carbon pricing role

28/11/24

German opposition insists on carbon pricing role

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Cop 29 climate finance deal settled but work remains

28/11/24

Cop 29 climate finance deal settled but work remains

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28/11/24

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27/11/24

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