The Minerals Council of Australia (MCA) has called on the federal government to maintain the key design principles of the Safeguard Mechanism, warning that restricting access to carbon offsets could push up compliance costs and undermine Australia’s decarbonisation goals.
In its submission to the government’s consultation on the 2026–27 Safeguard Mechanism Review, the peak industry body said the framework is operating as intended.
According to the MCA, net emissions across covered mining and processing facilities fell by 12 per cent in the 2024 to 2025 financial year compared to 2022–23 levels.
MCA CEO Tania Constable stated that early evidence demonstrates the scheme is meeting its objectives of reducing industrial emissions while preserving economic growth and policy stability.
The council urged the government to preserve the net emissions framework, which allows resources companies to meet targets through a combination of on-site abatement, Safeguard Mechanism Credits, and Australian Carbon Credit Units (ACCUs).
“Restrictions on the use of ACCUs would undermine the scheme’s design to efficiently deliver emissions reductions at lowest cost through flexible compliance,” the MCA cautioned in its submission.
Looking beyond 2030, the MCA recommended that the annual baseline decline rate transition from its current 4.9 per cent rate down to the legislated default rate of 3.285 per cent.
The industry body noted that this trajectory remains fully aligned with achieving net zero by 2050 and would ensure facility emissions intensities in the 2034–35 financial year are less than half their initial levels.
The council argued that maintaining flexible rules represents a prudent policy approach amid global economic volatility and energy security concerns.
“The MCA does not support measures that restrict access to ACCUs or otherwise devalue their compliance use,” according to the MCA.
“Where government considers further incentives for onsite abatement, priority should be given to enabling technologies, infrastructure investment, demonstration projects and regulatory reform over imposing additional compliance constraints.”
