We report under NGER. Does that automatically capture us?

It can. If you are a corporation registered under the NGER Act and your Scope 1 and Scope 2 emissions are at or above the 50,000 tonne CO2-e publication threshold, you are in Group 1. Every other registered NGER corporation sits in Group 2, regardless of size.

Where do Australian emission factors come from?

The National Greenhouse Accounts Factors, published each year by the Department of Climate Change, Energy, the Environment and Water. They give Scope 1 factors by fuel and Scope 2 electricity factors by state and territory. NGER-registered corporations must use NGER measurement methods for their NGER reporting.

Glossary›Regulation, capture and thresholds / Regulation, capture and timing›Safeguard Mechanism

Glossary term

Cluster B · B18

Tier 2

Safeguard Mechanism

Definition

The Safeguard Mechanism sets declining emissions baselines on Australia’s highest-emitting industrial facilities, being those with covered Scope 1 emissions above 100,000 tonnes CO₂-e a year. Covered facilities must keep net emissions at or below their baseline each year, surrendering carbon credits where they exceed it. It is a compliance obligation, not a disclosure obligation.

National Greenhouse and Energy Reporting Act 2007 (Cth) and the Safeguard Mechanism Rules

· administered by the Clean Energy Regulator, baselines declining 4.9% a year to 2030 ·

In force

On this page

In practice
What the assurer does with it
Commonly confused with
Timing and relief
Sources
Related terms
Related questions

Cluster

B · Regulation, capture and thresholds / Regulation, capture and timing, 26 terms

In practice

Safeguard sits on top of NGER and applies to roughly 215 facilities, covering around 28 per cent of national emissions. For most captured sustainability reporters it is simply not relevant. It earns a glossary entry because the two regimes are routinely conflated, and because for the minority of entities in both, the interaction is material.

The mechanics. A covered facility receives a baseline. Baselines decline by 4.9 per cent a year from 2023-24 to 2029-30. A facility whose covered emissions exceed its baseline must surrender Australian Carbon Credit Units or Safeguard Mechanism Credits to make up the difference. A facility that comes in below its baseline can be issued Safeguard Mechanism Credits, which are tradeable and can be banked for use in any year to 2030.

It does not capture anyone for climate disclosure. Safeguard coverage is not a section 292A trigger. In practice the distinction is academic, because a facility emitting over 100,000 tonnes sits inside a corporate group that is comfortably over the 50,000 tonne NGER corporate threshold and is therefore captured as a Group 1 entity on the NGER limb.

Where it becomes a disclosure question. For an entity in both regimes, the Safeguard obligation is a climate-related transition risk with a quantified, legislated trajectory, and it belongs in the sustainability report. A declining baseline is a known future cost with a known decline rate. The credit surrender obligation is a financial effect. The abatement or credit-purchase strategy is transition plan content. An entity disclosing a transition plan while holding a Safeguard liability it does not mention has a connected-information problem, and the credits it surrenders are the kind of carbon credit reliance AASB S2 requires to be disclosed against a target.

There is also a live review to watch. The statutory review of the scheme is running in 2026-27, decline rates for 2031 to 2035 must be set by 1 July 2027, and the outcome interacts with Australia’s 2035 national target. An entity with Safeguard facilities disclosing a long-dated transition plan is disclosing against a policy setting that is scheduled to change, and saying so is a stronger disclosure than ignoring it.

What the assurer does with it

For a Safeguard entity, the assurer treats the Safeguard position as both a data source and a risk disclosure. The Clean Energy Regulator submission is corroborating evidence for Scope 1 at facility level, on the same reconciliation logic as the NGER report. On the disclosure side, they test whether the Safeguard obligation appears in the risk and strategy disclosures, whether the credit surrender is reflected in the target and carbon credit disclosures, and whether any provision or liability recognised in the financial statements is consistent with what the sustainability report says. They reject a transition plan that omits a legislated baseline decline the entity is already subject to.

Commonly confused with

A carbon tax, which Australia does not have. Safeguard is a baseline-and-credit scheme applying to specific facilities, not a price on all emissions. Also confused with NGER, which is the measurement and reporting scheme underneath it: every Safeguard facility reports under NGER, but most NGER reporters are not Safeguard facilities.

Timing and relief

Baselines decline by 4.9 per cent a year from 2023-24 to 2029-30. The statutory review of the scheme is running in 2026-27, and decline rates for 2031 to 2035 must be set by 1 July 2027.