Delivered on the eve of COP28 negotiations, the government’s second annual climate statement to Parliament is a welcome and important public stocktake on Australia’s progress towards its climate targets, according to the Carbon Market Institute (CMI). Notably, this year’s projections also revealed the Safeguard Mechanism as the biggest driver of decarbonisation after renewable energy.
The statement and associated reports demonstrate progress in projected emissions reductions getting close to Australia’s recently enhanced 2030 targets, while Safeguard Mechanism reforms are also projected to see covered industrial facilities significantly step up on-site decarbonisation over time.
CMI noted that both 2030 and 2035 emission reductions currently fall short of alignment with Australia’s fair share of Paris Agreement goals. To close the gap, it believes Australia’s 2050 sectoral policies being developed in 2024 will be critical in increasing climate investments, along with a stronger Safeguard Mechanism to provide a bridge across the sectors.
CMI CEO John Connor said: “This year’s climate statement is another vital milestone in bringing transparency and accountability to Australia’s climate progress, and we welcome the detailed input from the Climate Change Authority as an important watchdog and independent source of advice.”
“The Safeguard Mechanism reforms, which require our biggest emitting facilities to increase their investments in emission reduction by nearly 5% per year, are the biggest driver in emissions reductions in these projects behind the transition to renewable energy.
“These reforms are projected to incentivise an increasing proportion of on-site reductions in stationary energy, fugitive emissions and industrial processes, while supporting investment in climate solutions in land and other sectors through Australian carbon credit and safeguard mechanism credit units.”
The projections report (p30) includes analysis of the Safeguard Mechanism driving 23 million tonnes (Mt) of on-site decarbonisation in 2030, and 27 Mt of net reductions elsewhere in the economy through carbon credits. This is expected to rise to 46Mt on-site decarbonisation by 2035, compared with 28 Mt reductions through carbon credits. In total, the Mechanism is expected to deliver almost 260 million tonnes of on-site abatement by 2035.
“While Australia is getting closer to its 2030 target of 43%, this target and the projected 2035 target of 53% fall well short of Australia’s fair share of Paris Agreement temperature goals that are being discussed in Dubai at COP28. CMI believes 2030 reductions should be at least 50% and 2035 reductions at least 70%.”
“The Government is developing a 2035 target in 2024 alongside net-zero sectoral plans. It is clear from today’s reports that it will be vital, in addition to accelerating the rollout of renewable energy, to deepen and broaden the Safeguard Mechanism to drive further on-site industrial decarbonisation, alongside other policies in transport, efficiency and agriculture.”
See CMI COP28 Priorities & Calls to Action paper released yesterday here. CMI’s latest Policy Positions statement is available here.
For further information, please contact Thomas Hann:
thomas.hann@carbonmarketinstitute.org.au
About the Carbon Market Institute
The Carbon Market Institute (CMI) is a member-based institute accelerating the transition towards a negative emissions, nature positive world. It champions best practice in carbon markets and climate policy, and its 150+ members include primary producers, carbon project developers, Indigenous organisations, legal, technology and advisory services, insurers, banks, investors, corporate entities and emission intensive industries. The positions put forward constitute CMI’s independent view and do not purport to represent any CMI individual, member company, or industry sector.
