Set the post-2030 decline rate and the trade-exposed pathway together

The question addressed

The consultation paper states that the decline rate for 2030-31 to 2034-35 must be calibrated to meet the agreed target, and lists the factors that calibration has to take into account: the target, production at existing facilities, facility entry and exit, uptake of concessional baselines, policy changes from the review, the reserve and credits issued to below-threshold facilities. The published estimates (RepuTex, EY and Australian Energy Producers) give different ranges for the final rate, and their published methods generally do not separate the mechanical effect of the Rule from assumptions about production, abatement, entry and exit. This submission separates the result produced by the Rule from later assumptions about production, abatement, new facilities and closures. It gives a rule-based starting point from public data, the adjustments that connect it to a final rate, and a way to test those adjustments after implementation.

Key findings

1. The default decline rate and the post-2030 trade-exposed pathway must be calibrated together.

   For a given 2035 target, each combination of the two rates that meets the target lies on one iso-target curve. Reducing the trade-exposed rate by one percentage point a year increases the default rate required of the other 187 facilities by approximately 0.2 points a year.

2. Under current rules the rule-based starting point is 3.53% a year for the 62% target and 5.99% for the 70% target.

   The starting point is calculated from the FY2024-25 register, the Rule’s own formulas, published commodity projections and a limited set of stated scenario conventions, and can be reproduced from the inputs listed in the submission. At the legislated indicative rate of 3.285% the starting point reaches FY2034-35 net emissions of 70.25 Mt, 1.4 Mt above the 62% point target of 68.8 Mt.

3. The difference from the Department’s projection of 66 Mt comes from stated assumptions rather than from the Rule.

   The Department’s projection assumes that facilities change their behaviour, including by reducing emissions onsite. Our rule-based starting point assumes no additional onsite abatement. Annex B compares the two series year by year and shows how assumptions about production, new facilities, closures and abatement explain the difference.

4. Publicly visible new entrants would add about 17.0 Mt a year of covered emissions against 2.59 Mt of baseline once all operate.

   The pipeline is 41 coal mines, 5 LNG trains and 16 iron ore mines in public trackers, entered on a phased profile. The calibration should list large known projects separately, including the off-grid data-centre proposal examined in Annex F, instead of including them in a general growth assumption.

5. The annual register can test the main assumptions.

   The Department should publish how emissions intensity changed across existing facilities, by industry (Annex G). That measure shows whether onsite abatement is tracking the path assumed in the calibration. The Department should also state in advance when it would recalibrate the rate.

6. The covered population is 208 facilities.

   The published register has 228 rows. Nineteen of those rows are eligible facilities under Rule s 58B, which are facilities still listed after falling below the coverage threshold. Removing them leaves 209 rows, and Telfer Gold Mine occupies two of them after a mid-year change of operator. Covered emissions are 132.8 Mt on either count. The Safeguard Atlas recomputes the submission’s published figures in the browser from the same inputs.

Recommendation

Adopt and publish a framework for post-2030 calibration that others can reproduce. Use three published steps and review them regularly.

1. Establish the starting point

   Set the default rate and the trade-exposed rate together, either recomputed by the Department on the same assumptions or taken from the rule-based starting point in this submission. State whether the compliance condition is the FY2034–35 point target or the five-year budget.

2. Quantify the adjustments

   Before the period begins, publish the effect of each adjustment separately: production, entry and exit, trade-exposed treatment, onsite abatement, below-threshold credits and the reserve. State how much each one moves the rate, and list large publicly identified projects individually.

3. Monitor outcomes and recalibrate

   Publish the relative-intensity effect of covered facilities with each annual register, compare it with the abatement pathway used in the calibration, and set out the recalibration mechanism in advance.

Open questions

Annex E lists the information that is not publicly available and identifies who is likely to hold it. We do not estimate the missing values. Instead, we state the rule used for each scenario.

• Post-2030 production at existing facilities.
• The commissioning probability and timing of new projects.
• Closures of non-coal facilities beyond the four confirmed.
• Trade-exposed applications and renewals after 2030.
• Policy changes arising from the review.
• Credits issued to below-threshold facilities.
• The size and composition of the reserve.

Annex H.2 records the limits of the evidence base.

• The closure search cannot show that the list is exhaustive.
• The Regulator publishes neither stable facility identifiers nor facility-level production, so 61 candidate identity matches await manual review.
• Assuming full compliance puts the modelled base year about 1.7 Mt below the reported outcome.
• Phasing in the project pipeline puts the modelled series 1–3 Mt below the Department’s projection from FY2026–27 to FY2028–29.
• The minimum baseline is applied only to facilities with a base-year baseline of at least 50,000 t.

Sources

Evidence used

DCCEEW, 2026-27 Safeguard Mechanism Review consultation paper, August 2026 (consultation paper). National Greenhouse and Energy Reporting Act 2007 and the NGER (Safeguard Mechanism) Rule 2015, compilation F2024C00846 (legislation). Clean Energy Regulator, Safeguard facility baselines and emissions data 2024-25, and the trade-exposed baseline-adjusted facility table (public register). DCCEEW, Australia’s emissions projections 2025 and chart data (report and data workbook). Office of the Chief Economist, Resources and Energy Quarterly, December 2025 forecast workbook (official statistics). Global Energy Monitor coal, LNG and iron ore trackers, 2025–26 editions (dataset). National Pollutant Inventory and Geoscience Australia Operating Mines Map (public register and dataset). RepuTex, EY for IGCC and Australian Energy Producers published estimates (reports and submission). The full reference list with page numbers is Annex H.1 of the PDF.

The Department receives a workbook containing the formulas behind every table and figure. It is not published on this site. Copyright and reuse terms are on page 2 of the PDF.

Corrections

No corrections have been issued. Any material correction identified after lodgement will be notified to DCCEEW and recorded here with the date of the change, the original figure, the corrected figure and the source relied on, as Annex H.2 of the submission undertakes.

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