Bill
Safeguard Mechanism (Crediting) Amendment Bill 2023
passed, as at 2023-04-11. Climate Change, Energy, the Environment and Water portfolio.
- Sponsor
- Not recorded
- Portfolio
- Climate Change, Energy, the Environment and Water
Recorded stages
- second reading — 2023-03-08
- second reading — 2023-03-09
- second reading — 2023-03-20
- second reading — 2023-03-21
- second reading — 2023-03-22
- second reading — 2023-03-27
- second reading — 2023-03-27
- committee — 2023-03-27
- third reading — 2023-03-27
- introduced — 2023-03-28
- second reading — 2023-03-28
- second reading — 2023-03-28
- second reading — 2023-03-29
- committee — 2023-03-29
- committee — 2023-03-30
- third reading — 2023-03-30
- other — 2023-03-30
- other — 2023-03-30
- passed — 2023-03-30
- royal assent — 2023-04-11
Divisions
- The majority voted against clause (c) of a [motion](https://www.openaustralia.org.au/senate/?id=2023-03-21.116.1): > *That—* > > *(a) the Senate notes:* > >> *(i) the failure of the Minister representing the Minister for Climate Change and Energy to comply with order for the production of documents no. 162, relating to Australian Carbon Credit Units (ACCUs), and* >> >> *(ii) the Minister failed to comply with the order despite the Senate rejecting the Minister's claim of public interest immunity in relation to the documents that he provided to the Environment and Communications Legislation Committee on 1 March 2023;* > > *(b) the Senate again rejects the Minister's claim of public interest immunity, provided to the Senate on 9 March 2023;* > > *(c) further consideration of the [Safeguard Mechanism (Crediting) Amendment Bill 2022](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fbillhome%2Fr6957%22) be postponed and made an order of the day for the next day of sitting after the documents and modelling relied on for the forecast usage of ACCUs over the decade to 2030 are laid on the table; and* > > *(d) the Senate further notes that the Government has indicated that it will use regulations to implement elements of its safeguard mechanism reforms, which will come before the Senate for scrutiny through the disallowance process.* Read more about these types of motions on the [parliamentary website](https://www.aph.gov.au/About_Parliament/Senate/Powers_practice_n_procedures/Brief_Guides_to_Senate_Procedure/No_12). — 2023-03-21, Senate: negative, ayes 31, noes 37
- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Second Reading - Stop Bruce MP from speaking — 2023-03-22, House of Representatives: affirmative, ayes 79, noes 53
- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Second Reading - Stop Newcastle MP from speaking — 2023-03-22, House of Representatives: affirmative, ayes 86, noes 52
- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Second Reading - Let Newcastle MP speak more — 2023-03-22, House of Representatives: affirmative, ayes 86, noes 52
- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Second Reading - Don't stop Hawke MP from speaking — 2023-03-22, House of Representatives: affirmative, ayes 78, noes 52
- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Second Reading - Let Mr Rae speak more — 2023-03-22, House of Representatives: affirmative, ayes 79, noes 53
- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Second Reading - Agree with bill's main idea — 2023-03-27, House of Representatives: affirmative, ayes 89, noes 56
- The majority voted in favour of [government amendments](https://www.openaustralia.org.au/debate/?id=2023-03-27.31.2) introduced by the Minister for Climate Change and Energy and McMahon MP [Chris Bowen](https://theyvoteforyou.org.au/people/representatives/mcmahon/chris_bowen) (Labor), which means they will now be included as part of the bill. ### What were the amendments? The amendments were introduced along with a [supplementary explanatory memorandum](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/display.w3p;query=Id%3A%22legislation%2Fems%2Fr6957_ems_fb2b27bb-096e-4970-ad60-5cd3e696d1a1%22;rec=0). Mr Bowen also [provided a brief explanation](https://www.openaustralia.org.au/debate/?id=2023-03-27.31.2) in his speech: > *Today I'm introducing government amendments to the Safeguard Mechanism (Crediting) Amendment Bill 2022 which will enact some of the recommendations of the [ACCU review](https://www.dcceew.gov.au/climate-change/emissions-reduction/independent-review-accus). These are legislative changes to the Carbon Credits (Carbon Farming Initiative) Act 2011 that will increase transparency and robustness of the scheme while we continue to consult on the implementation of other recommendations. These recommendations will: require publication of carbon estimation area information and other information prescribed by the rules, recommendation 4.1; require the minister to be satisfied that a methodology determination or a varied methodology determination complies with the offsets integrity standards before the minister can make or vary the determination, recommendation 5.22; and change the Emissions Reduction Assurance Committee, ERAC, chair's position from part time to full time, recommendation 2.1—consistent with the recommendations of the review. I will appoint a full-time chair and a First Nations member of ERAC through an open and transparent process. The government will also establish an independent secretariat, re — 2023-03-27, House of Representatives: affirmative, ayes 89, noes 56
- Safeguard Mechanism (Crediting) Amendment Bill 2022 - Consideration in Detail - Agree with the bill as amended — 2023-03-27, House of Representatives: affirmative, ayes 87, noes 56
- The majority voted in favour of an amendment to the usual second reading motion, which is "*That this bill be now read a second time.*" To [read a bill for a second time](https://peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/) is to agree with its main idea. This amendment does not make any changes to the bill itself but still has political significance because it represents the will of the Senate. It was introduced by Victorian Senator [Lidia Thorpe](https://theyvoteforyou.org.au/people/senate/victoria/lidia_thorpe) (Independent). ### Amendment text > *At the end of the motion, add “, but the Senate calls on the Government to:* > > *(a) in line with its commitment to implementing recommendation 9.8 of the final report of the [Pepper Scientific Inquiry into Hydraulic Fracturing in the Northern Territory](https://territorygas.nt.gov.au/sustainability-and-responsibility/the-scientific-inquiry-into-hydraulic-fracturing), ensure the gas industry in the Northern Territory’s Beetaloo Basin is required to offset all Scope 2 and 3 emissions by referring this matter to the Energy and Climate Change Ministerial Council, and work with the Northern Territory Government to achieve this;* > > *(b) support First Nations communities in carbon sequestration projects on Country, including but not limited to savanna burning, and on Sea Country, including but not limited to kelp farming; and* > > *(c) support First Nations-led verification assessment of environmental, social and cultural values of carbon farming and sequestration projects and invest in training for these purposes in First Nations communities, including but not limited to communities in regional and remote areas and on missions and reserves”.* — 2023-03-29, Senate: affirmative, ayes 31, noes 25
- Safeguard Mechanism (Crediting) Amendment Bill 2023 - Second Reading - Agree with bill's main idea (with comment) — 2023-03-29, Senate: affirmative, ayes 31, noes 25
- Safeguard Mechanism (Crediting) Amendment Bill 2023 - Consideration of Senate Message - Agree with Senate amendments and so pass bill — 2023-03-30, House of Representatives: affirmative, ayes 89, noes 51
- The majority voted in favour of [government amendments](https://www.openaustralia.org.au/senate/?gid=2023-03-29.27.1) introduced by NSW Senator [Jenny McAllister](https://theyvoteforyou.org.au/people/senate/nsw/jenny_mcallister) (Labor), which means they will now be included as part of the bill. ### What do the amendments do? An [explanatory memorandum](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/display.w3p;query=Id%3A%22legislation%2Fems%2Fr6957_ems_7161b7cf-a6bb-4cbf-8fb4-c06acf729878%22;rec=0) was provided by the government, which explains the amendments in detail. Senator McAllister also [gave a summary](https://www.openaustralia.org.au/senate/?gid=2023-03-29.27.1) of them in her speech: > *Today the government is moving amendments to amend the objects of the National Greenhouse and Energy Reporting Act to specify that net carbon emissions from safeguard facilities decline consistent with Australia's greenhouse gas emissions reduction targets and that covered emissions decline over time; that each facility has a material incentive to reduce emissions; and that the competitiveness of trade exposed industries is appropriately supported as Australia and its regions seize the opportunities to move to a global net zero economy.* > > *These amendments also require public advice from the Climate Change Authority on how emissions are tracking against the carbon budget. Importantly, they add a requirement to make changes to subordinate legislation if the budget is not on track or to take other steps to address that problem. To inform this advice, the environment minister would be required to provide information about emissions from proposed actions that are likely to result in a new facility being covered by the safeguard mechanism or a safeguard facility increasing its emissions after approving the action under the Environment Protection and Biodiversity Conservation Act. This advice would be provided to the Climate Cha — 2023-03-30, Senate: affirmative, ayes 32, noes 26
- Safeguard Mechanism (Crediting) Amendment Bill 2023 - in Committee - Onshore shale gas projects — 2023-03-30, Senate: negative, ayes 12, noes 39
- The majority voted against [amendments](https://www.openaustralia.org.au/senate/?gid=2023-03-30.119.1) introduced by ACT Senator [David Pocock](https://theyvoteforyou.org.au/people/senate/act/david_pocock) (Independent), which means they failed. ### What do the amendments do? The amendments related to the surrender of units, judicial review, a maximum offset percentage and the price of offsets. In his speech, Senator Pocock [explained that](https://www.openaustralia.org.au/senate/?gid=2023-03-29.337.1): > *Amendments (1) and (2) on sheet 1903 revised circulated in my name improve the way that offsets are used under the reform. Offsets are a very necessary part of this but should be reserved for hard-to-abate industries. They should only be used as a last resort, and this amendment will make sure that is the case.* > > *Amendment (3) on sheet 1903 removes the price cap on ACCUs and limits the risk to taxpayers should the cap be breached. If we're going to have a market mechanism, I don't see a reason to put a ceiling on the price. If you're going to use the market to try and fix this, then it really doesn't make sense to cap it and, in doing so, potentially expose the Commonwealth and taxpayers to a liability should the Commonwealth run out of ACCUs.* > > *The amendments on sheet 1915 discount the value of offsets if more than 50 per cent of compliance with baseline is achieved through offsetting. This will drive onsite abatement and bring forward investment in decarbonisation. If we're not going to have a hard cap on ACCUs there is provision in the regulation-making powers for the minister to discount ACCUs, referred to as the four-fifths rule, and I really believe this would be a valuable tool in imposing a carbon mitigation hierarchy which is well-established and acknowledged around the world. It makes sense for Australia to have one of them embedded in this legislation.* > > *The amendments on sheet 1907 extend standing to allow third parties to challenge issues — 2023-03-30, Senate: negative, ayes 13, noes 38
- Safeguard Mechanism (Crediting) Amendment Bill 2023 - in Committee - Fossil fuel programs — 2023-03-30, Senate: affirmative, ayes 32, noes 26
- Safeguard Mechanism (Crediting) Amendment Bill 2023 - Third Reading - Pass the bill — 2023-03-30, Senate: affirmative, ayes 32, noes 26
Plain-language summary
Written by a model from the explanatory memorandum; not the record, as at 2022-11-30.
The bill would create a system for facilities covered by the Safeguard Mechanism to earn tradable credits for staying below their emissions baselines.
It amends the National Greenhouse and Energy Reporting Act 2007 and the Australian National Registry of Emissions Units Act 2011 to set up how Safeguard Mechanism Credits are issued, bought, and recorded.
The government says the changes are part of a plan to meet Australia's legislated emissions targets, including net zero by 2050 and a 43% cut by 2030.
- Enable facilities below their baselines to generate tradable Safeguard Mechanism Credits.
- Phase out eligible offsets projects at Safeguard-covered facilities.
- Amend the Carbon Credits (Carbon Farming Initiative) Act 2011 to start implementing the government's response to an independent review of Australian Carbon Credit Units.
Facilities covered by the Safeguard Mechanism, and businesses that operate them.
Sources
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