A report by the environmental group Australian Conservation Foundation (ACF) has found that just nine facilities plus Qantas are responsible for a third of all emissions reported under the ‘safeguard mechanism’ – a 2016 federal policy introduced as part of its climate change legislation to try to reduce greenhouse gas emissions.
In the face of consistent criticisms that the policy is not forcing companies to reduce pollution, the Labor Government is reviewing the mechanism. The ACF report highlights the country’s biggest polluters.
The list contains four LNG companies, two steelworks, two alumina refineries, a coal mine and Qantas.
“We’re not arguing that all of these facilities should close tomorrow. Absolutely not,” says one of the members of the ACF Investigation team, Kim Garratt.
“But these 10 facilities have produced 10% of Australia’s emissions in the last five years. They have to pitch in and do their fair share to start reducing their emissions.”
It’s important to note that Qantas is not really a ‘facility’ in the same way as the others, and it does not list in the top three highest polluting companies on the list – those are Rio Tinto, Chevron and Woodside.
“We’ve looked at the data that is reported by the Clean Energy Regulator about Australia’s most polluting facilities,” she told Cosmos.
“Qantas is up there because they produce around about 4 million tonnes of carbon dioxide equivalent every year.”
The safeguard mechanism tracks facilities that emit more than 100,000 tonnes of carbon dioxide equivalent emissions per year, and although the number fluctuates, around 200 businesses are included in the data.
In total those reporting under the safeguard mechanism are responsible for about 28% of Australia’s emissions.
“The way that the safeguard mechanism is supposed to work is that it sets limits on the amount of pollution that these big industrial facilities can create,” says Garratt.
“But in practice, so far, those limits have been astronomically high. And that makes it very unlikely that a facility will actually go over the limit.
Garratt says some of the top LNG facilities have only begun operating recently, while others are expanding.
According to the Climate Council, the safeguard mechanism has been unable to deliver emissions reduction, and is not set up to do so.
“While the scheme may have been enacted to avoid emissions increases from Australia’s largest emitters, the reality is that over the first five years of its operation emissions from covered facilities – our largest industrial emitters … have trended upward,” they write in a submission to the safeguard mechanism review.
Labor has promised to reform the safeguard, and issued a consultation paper on options for reform. The response period is now closed.
“The role of Australian industry will be crucial in ensuring the nation reduces emissions by 43% by 2030,” said Bowen.
“We are building on the existing architecture of the safeguard mechanism but getting the settings right to get emissions heading downwards while supporting industry competitiveness.”
According to the paper, the changes are due to be legislated no later than March 31 next year, before taking effect from July 1.
“Climate Change and Energy Minister Chris Bowen has committed to change the safeguard, but there are many ways this could go wrong if big polluters get to set the rules,” says ACF’s lead investigator, Annica Schoo.
“While emissions from coal mining have increased slightly over the five years, emissions from gas and oil extraction have ballooned by 20%, primarily due to the emergence of several new players in the sector.”
They have suggested gradually resetting baseline emission levels to help Australia reach net zero emissions by 2050, while the Climate Council has recommended that large gas-fired electricity generators be included in the mechanism, and no new high emissions projects are accommodated.
“If we don’t see some really strong reforms to the safeguard mechanism, Australia will really struggle. I don’t see how it’s possible that we could make that 43% reduction,” says Garratt.