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New incentive for businesses to reduce energy costs and emissions

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Industries have been invited to contribute to the design of a new Safeguard Crediting Mechanism, which will help Australia’s largest energy using businesses adopt new technologies to reduce energy costs and emissions – without compromising competitiveness. 

The existing Safeguard Crediting Mechanism provides a framework for Australia’s largest emitters to measure, report and manage their emissions. It applies to more than 150 businesses across the industrial, manufacturing, mining, transport and oil and gas sectors. 

The new Safeguard Crediting Mechanism will aim to provide an incentive to businesses to reduce their energy costs and emissions through transformative projects. 

The policy was a recommendation by the 2020 Expert Panel review led by Mr Grant King. It looked at ways to unlock low-cost abatement across the economy. 

The federal government’s “technology not taxes” approach means reducing emissions without imposing new costs on households, businesses or the economy, minister for Energy and Emissions Reduction Angus Taylor said. 

“Many of the businesses covered by the Safeguard Mechanism produce goods for export, or compete with products imported from overseas,” Taylor said. 

“They operate in a highly competitive international trade environment and are critical to our economy. That’s why our approach is focused on building voluntary markets and incentives to accelerate the adoption of new technologies. 

“The Morrison government knows the best way to reduce emissions across the economy is to drive innovation and technology, and we are doing this without imposing new costs that would hurt businesses and communities or destroying jobs.” 

The 2021-22 Federal Budget has committed $279.9 million for over 10 years, to allow the Clean Energy Regulator to purchase abatement from businesses under the new Safeguard Crediting Mechanism. 

Submissions can be made via the Consultation Hub on the Department of Industry, Science, Energy and Resources website and by clicking the “Make a Submission” button. 

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