The Australian Government has opened consultation on the 2026-27 review of the Safeguard Mechanism, seeking feedback on how the policy should operate beyond 2030.
For the Hunter, where major industrial facilities play a central role in the regional economy, the review provides an opportunity for businesses to contribute to discussions on the future operation of one of Australia’s key industrial emissions policies.
The Department of Climate Change, Energy, the Environment and Water said the review was scheduled as part of the 2023 reforms and Australia’s Net Zero Plan released in 2025. Its purpose is to ensure the mechanism continues delivering emissions reductions while remaining appropriately calibrated.
Written submissions on the consultation paper are open until 11:59 pm AEST on Friday 18 September 2026.
Review focuses on existing framework
Rather than redesigning the Safeguard Mechanism, the review will examine whether the current policy settings remain suitable after 2030.
Consultation will consider the baseline decline rate between 2030 and 2035, coverage arrangements for facilities under the scheme, the future role of Safeguard Mechanism Credits, Australian Carbon Credit Units and international units, incentives for onsite emissions reduction, arrangements for trade exposed facilities, and the recommendations of the Carbon Leakage Review.
The department expects policy positions and any draft rule amendments to be released in early 2027 following consultation.
Independent advice to inform government
The Climate Change Authority will provide advice to the Australian Government on the baseline decline rate for 2030-31 to 2034-35.
It will also consider how effectively the current reforms are encouraging onsite emissions reduction and whether further incentives are needed. The authority conducted its own consultation between 2 July and 9 August 2026 to support that work.
Government says mechanism is performing as intended
Climate Change and Energy Minister Chris Bowen said the first two years of the reformed mechanism indicate it is meeting its objectives.
“The first two years of operation show the mechanism is working as intended. Gross and net emissions from covered facilities are tracking well, and the scheme remains on course to deliver its proportionate contribution to Australia’s legislated 2030 emissions reduction target.”
He said the review would build on the existing framework rather than replace it.
“Importantly, the review is not intended to fundamentally redesign the Safeguard Mechanism. Rather, it will examine how the existing framework can continue to deliver effective emissions outcomes beyond 2030, consistent with its contribution to the 2030 target.”
Opportunity for industry to contribute
According to the Government, the review will examine policy settings needed to support Australia’s 2035 emissions target while maintaining a focus on domestic emissions reduction. It will also consider industrial decarbonisation, greater electrification and the use of Australian renewable energy within the existing framework.
For businesses across the Hunter’s energy, manufacturing and industrial sectors, the consultation period provides an opportunity to contribute to the policy settings that are expected to guide emissions reduction requirements and investment decisions beyond 2030, ahead of the Government releasing its policy positions in early 2027.
