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Safeguard Mechanism Report

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Energy Resource Insights Briefing Report: Money for Nothing - Australia coal mines under the reformed Safeguard Mechanism

The report finds that:

  1. A number of large Australian coal mines will be able to significantly increase their emissions this decade under the reformed Safeguard Mechanism. 
  2. Rather than reducing emissions, one-in-five coal mines will be permitted to increase emissions compared to the most recent financial year.
  3. This will see those mines issued with 6 million tonnes worth of mitigation credits - at a potential commercial value of $180 million dollars - without taking any measure to reduce emissions.

What’s the story?

The “flaw of averages” in the Government’s flagship climate change policy for the industrial sector will let ten large open cut coal mines off the hook while other industries are reducing greenhouse gas emissions.

Even worse, these mines are set to reap millions of dollars in bogus ‘credits’ for emissions reduction, without taking any action to reduce their pollution.

Watch our short explainer video


The Safeguard Mechanism is one of the Australian Government’s central measures to address climate change. Big industrial facilities and mines together have an emissions budget for the rest of this decade.

Each facility will have forecast annual greenhouse emissions, called baselines, calculated in part by the average pollution levels of their industry, and these are supposed to fall by 4.9% per year in order to meet the budget. 

But there’s a problem. 

The “flaw of averages'' is the reason a statistician could drown fording a river that is, on average, less than a metre deep. The flaw of averages in the Safeguard Mechanism could blow a hole in Australia’s climate change commitments. 

That’s because not many coal mines emit “average” greenhouse gas emissions. Some emit a lot more, and some much much less, relative to the amount of coal they dig, and that’s left a big hole in our climate change safeguard. 

For ten open cut coal mines with among the lowest rate of emissions per tonne of coal in the country the application of the “industry average” formula under the Safeguard Mechanism will result in rising emissions baselines out to the end of the decade, undermining the integrity and fairness of the scheme. 

And these mines are big. Some 30% of total coal production covered by the Safeguard Mechanism comes from the ten mines that will have increasing emissions baselines between 2023 and 2030. 

And these mines are getting bigger. More than half of them have plans to expand in the next year or two. 

They include the Moolarben coal mine in NSW, which plans to extend its mine from 2025 to 2034 and mine an extra 40 million of coal – Moolarben’s emissions baseline will more than double between 2023 and 2030 unless we fix the coal hole in the Safeguard Mechanism.

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