Australia's emissions regulator recorded 13.4 million offset units surrendered under the safeguard scheme

On 15 April 2026 the Clean Energy Regulator published the compliance results for the 2024-25 year of the safeguard mechanism, Australia's principal instrument for limiting greenhouse gas emissions from its largest industrial facilities. The regulator recorded 132.8 million tonnes of carbon dioxide equivalent in covered emissions, 2.3 per cent below the previous year, against aggregate baselines of 126.2 million tonnes, which fell 7.3 per cent. Facilities closed the difference by surrendering 13.4 million units, comprising 10.8 million Australian Carbon Credit Units and 2.6 million Safeguard Mechanism Credits. A further 6.7 million Safeguard Mechanism Credits were issued to facilities that came in under their baselines.

The mechanism applies to facilities emitting more than 100,000 tonnes of carbon dioxide equivalent a year, a group that includes coal mines, liquefied natural gas plants, steelworks and large manufacturers. Under the scheme rules a responsible emitter must keep net emissions below a declining baseline. An emitter above its baseline by 1 April must surrender Australian Carbon Credit Units or Safeguard Mechanism Credits, or obtain a flexibility measure from the regulator. On that test, the published figures describe a scheme in compliance. They do not, on their own, establish where the reductions physically occurred.

That gap is what two documents released on 12 August 2026 seized on. The Climate Council report Free Ride, written by senior adviser Ben McLeod, examined 197 facilities continuously covered since the 2023 reforms and found they had cut emissions by 0.4 per cent, about 543,000 tonnes, over two years, against a decline rate of 4.9 per cent a year set out in the law. Facilities in coal, gas and oil increased emissions by 0.2 per cent. The report projects the covered sector reaching a 7.6 per cent reduction by 2030 against a national target of 19 per cent for that group.

"We need to see some limits put on offsets because for as long as facilities are able to buy an unlimited number of offsets, they're able to shirk the responsibility for cutting their own climate pollution," McLeod said. The report recommends lifting the annual decline rate to 6.8 per cent, confining offsets to between 5 and 10 per cent of baselines by 2035, retaining the prohibition on international offsets, and setting pollution limits of zero for fossil fuel facilities.

The analysis also identifies where the largest recorded falls came from. According to reporting by RenewEconomy on 12 August 2026, the biggest reductions were at facilities that dropped below the 100,000 tonne coverage threshold altogether, including a Queensland mine closure and the shutdown of the Darwin liquefied natural gas plant. A facility that stops operating leaves the scheme. It does not abate.

The Australia Institute published its own report the same day. Koalas for Coal, by Fergus Green, argues that crediting the proposed Great Koala National Park in New South Wales under the Improved Native Forest Management method would generate credits usable by safeguard covered emitters. "The credits generated from the project will enable the coal and gas industry and other big industrial polluters to cause more climate pollution than would otherwise be the case," the report states, and recommends that Parliament disallow the legislative instrument enabling it. The two think tanks converge on offsets and diverge on remedy: one wants the decline rate raised and offsets capped, the other wants a specific crediting method stopped before it starts.

The regulator's enforcement powers bite in a narrower place. On 7 August 2026 the Clean Energy Regulator permanently suspended the registration of Emerging Environmental Group Pty Ltd under the Renewable Energy (Electricity) Act 2000, a decision announced on 13 August 2026. The regulator said it was no longer satisfied the company was a fit and proper person for the purposes of the Act, citing associations with individuals or entities previously found unfit to participate in its schemes. The company can no longer create certificates under the Small-scale Renewable Energy Scheme and has 60 days from notification to seek internal review. That is a decision about who may participate, not about how many tonnes are emitted.

The statutory review of the safeguard mechanism closes for submissions on 18 September 2026, with findings expected in early 2027.

What is not yet public is how many individual facilities exceeded their baselines in 2024-25 and were required to surrender units, and how the 13.4 million surrendered units were distributed across them. The regulator publishes excess emissions situation data, but the aggregate release does not state the facility count. Nor is it known whether the review will alter the decline rate or the treatment of offsets, or whether the suspended company will seek review of the decision against it.