Understanding Safeguard Reforms: Australia’s Bold Move Towards Greener Industries

safeguard reforms

In an effort to combat climate change, Australia has initiated a series of environmental regulations known as the Safeguard Reforms. These reforms began in July 2023 and are currently undergoing ongoing updates. In a nutshell, the goal is to align Australia’s industries with international standards for environmental practices, especially those concerning greenhouse gas emissions.

So, how are we going about this? Well, the government department overseeing these changes is closely studying what’s been successful in other countries. They’re identifying top-performing industries around the globe that are producing less waste and pollution. Then, they’ll use these examples to set ‘benchmarks’—or standards—for Australian industries.

Now, here’s where it gets interesting. Suppose a country like Japan invents a new, super-efficient technology that significantly reduces emissions. If it’s among the best in the world, it will set the standard for Australian industries, even if it was tailored specifically for Japan’s unique economic needs. So, Aussie companies will need to keep pace, adopting any new technology and training staff to use it.

There’s still much to be decided in this ongoing process. For example, annual benchmarks will initially drop by 4.9% each year until 2030. After that, it’s suggested that changes will occur in 5-year increments. This will be confirmed in consultations planned for 2027.

By the end of this year, we can expect to see the finalisation of these benchmarks. They’ll be incorporated into law and take effect in the financial year of 2024.

One area under specific review is the coal industry. A new rule is being introduced that covers all emissions related to coal mining, including waste gas. The goal is to have a single standard, or ‘production variable’, that covers all activities in the industry. This could potentially revolutionise how we manage waste and emissions from mining, and it will certainly keep coal companies on their toes!

However, these new regulations are still open for debate. Public consultations are currently ongoing, giving citizens and industries a chance to voice their opinions and concerns. If you want to have your say on these changes, make sure to submit your thoughts before the deadline on August 11.

Australia is taking a significant step towards greener industries. By adopting these internationally informed practices, we’re pushing for a cleaner, more sustainable future.

The team at Edge Utilities are passionate about renewables and sustainability, we are energy brokers with an eye on the planet. We are committed to helping businesses reach their net zero goals through renewable power contracts.
To discuss options and plans for your business contact us at save@edgeutilities.com.au  or call us on 1800 334 336 to discuss. 

Is It Time for Australia to Bring Renewable Energy Manufacturing Home?

Edge Utilities_Renewable Energy_Wind Turbines

Australia’s renewable energy sector is facing a litany of challenges, with a number of recent wind project delays marking just the tip of the iceberg. The halt in investment for the Karara Wind Farm, due to delays in turbine parts and escalating costs, highlights a broader problem. Queensland’s ambitions of generating 50 per cent of new renewable energy within the state now hang in the balance, a setback that underlines the pressing need for an overhaul in our approach to green energy.

As the Conference of Parties (COP 28) approaches in November, and with Australia seemingly off-course to meet its 2030 climate targets, international pressure is increasing. Engie Australia’s CEO, Rik De Buyserie, suggests that to even approach the 2030 climate targets, Australia would need 10,000km of new transmission, 44GW of new renewables, and 15GW of firming capacity.

Key figures in the industry, such as Markus Brokhof, COO of AGL, and De Buyserie have been vocal about the urgency of the situation. They argue that the current investment in renewable electricity is woefully inadequate to compensate for the looming closure of coal generation. Brokhof posits that it might be time for Australia to not just invest more, but to also bring the manufacturing of renewable energy components home.

The notion of upskilling our workforce and developing our own green manufacturing industry is a compelling one. With the logistical challenges of imports, scarcity of components, and rising costs, it may be the most feasible path towards our 2030 climate targets. Thus, echoing the sentiment of the famous 1996 football anthem, it might indeed be time to bring renewable energy ‘home’, transitioning Australia towards a self-reliant, green energy future.

This is a summary article from Edge2020 – read the original article.

The team Edge Utilities are passionate about renewables and sustainability, we are energy brokers with an eye on the planet. We are committed to helping councils and business communities reach their net zero goals through renewable power purchasing agreements (PPAs) and smart portfolio management.
To discuss options and plans for your community contact us at save@edgeutilities.com.au  or call us on 1800 334 336 to discuss. 

Europe’s Climate Stride: Unpacking the Carbon Border Adjustment Mechanism

Container Ship on the Ocean

In an ambitious bid to combat climate change, the European Parliament has introduced legislation, including a Carbon Border Adjustment Mechanism (CBAM), aiming to drastically cut greenhouse gas emissions.

With a target of at least a 55% reduction by 2030, this initiative could have far-reaching effects, particularly for large industries whose operations produce considerable carbon emissions.

Central to this package are two key measures. Firstly, it proposes to phase out free allowances under the European Emission Trading Scheme (ETS) by 2026. Secondly, it introduces the Carbon Border Adjustment Mechanism (CBAM), which sets tariffs on goods produced using carbon-intensive processes, particularly those prone to ‘carbon leakage’ — a term for shifting carbon-intensive production stages to countries with more lenient climate policies.

While the CBAM concept is gaining momentum globally, with countries like the UK, Japan, Canada, and the US exploring similar mechanisms, it presents its own challenges. Despite Australia’s ongoing considerations for a CBAM amidst resistance from carbon-intensive sectors, the complexity and cost of compliance, including intricate accounting and potential auditing bottlenecks, could pose significant obstacles to its widespread implementation.

This is a summary article from Edge2020 – read the original article.

The team Edge Utilities are passionate about renewables and sustainability, we are energy brokers with an eye on the planet. We are committed to helping councils and business communities reach their net zero goals through renewable power purchasing agreements (PPAs) and smart portfolio management.
To discuss options and plans for your community contact us at save@edgeutilities.com.au  or call us on 1800 334 336 to discuss. 

Australia’s first net zero emissions, hydrogen/gas power plant gets the green light.

EnergyAustralia has announced that the expansion of its existing Tallawarra power station in the Illawarra region is proceeding, following an agreement reached with the Government of New South Wales.

Tallawarra B will be Australia’s first net zero emissions hydrogen and gas capable power plant, with direct carbon emissions from the project offset over its operational life. EnergyAustralia will offer to buy 200,000kg of green hydrogen per year from 2025.

The 300+ megawatt power station will be powering New South Wales homes and businesses in time for summer, following Liddell power station’s retirement.

Not only will the new power station deliver reliable power to around 150,000 homes but it will also contribute $300 million to the economy and create 250 well-paid jobs during construction.

“EnergyAustralia has a goal of being carbon neutral by 2050. Today we provide further evidence of another energy project that can help keep the lights on for customers with reliable, affordable, and cleaner energy,” Managing Director Catherine Tanna said.

CARBON PRICES INCREASE

As the next round of auctions are set to take place under the Emissions Reduction Fund, prices for Australian Carbon Credits (ACCU) have increased steadily since January and are now trading at $18.40 per certificate, 10% higher than in January.

The growth in the ACCU market is partially from the Federal government’s Safegaurd mechanism, but also due to an increasing number of companies implementing zero emission targets and using ACCU’s to offset their emissions.

As more companies choose to aim for a net zero emission position, the supply / demand balance in the ACCU market has shifted and the price of the commodity is increasing. Some forecasts predict ACCUs could reach as high as $45 per certificate by 2030.

The biggest jump in the price for ACCUs was recorded in February when the Prime Minister endorsed a net zero target by 2050.

As highlighted in previous articles, many companies are responding to shareholder pressure to reduce emissions and decarbonise.  The European market, Emissions Trading System (ETS), a block of 27 countries, has seen EU carbon permits jump from €23 in November to €41 in March.  They were trading closer to €5 only two years ago. The price increase has been the result of the EU’s tougher climate change policies.

Large emitting companies had until February 2021 to purchase their ACCUs to comply with their Safeguard liabilities, hence the  increases in price. However as seen from the chart above the prices of ACCUs has remained high. This leads to the assumption that voluntary purchases of ACCUs are maintaining upward pricing pressure.

Across Australia, large emitters such as AGL have been joined by large energy users including the Coles Group and Woolworths to commit to net zero greenhouse gas emissions by 2050. Other large gas and petrochemical exporters have started to sell carbon neutral LNG and other carbon neutral products, this is achieved by carbon offsets such as ACCU’s.

As the demand for carbon offsets increases the ACCU price is likely to continue to rise until cheaper abatement solutions develop such as improved farming practices resulting in improved soil carbon storage and broad acre management such as Savanna burning.

Common to all markets, the offset market is currently in a state of flux.  Demand will most likely increase the price of ACCUs while new project and pressure from international carbon offsets will put downward pressure on prices. The positive takeaway is businesses are clearly proactively moving to reducing their carbon footprint.

What are you doing to reduce yours?