Implications of an expanded Safeguard Mechanism

The Federal Government's Safeguard Mechanism (SGM) review is scheduled to start in the second half of 2026. The Productivity Commission has recommended lowering the coverage threshold from 100,000 tCO₂-e to 25,000 tCO₂-e. If accepted, this change would see more than 100 new organisations enter the scheme for the first time.

Prospective new entrants to the SGM would include:

     

      • Meat and poultry processors with gas boilers, rendering, and wastewater treatment

      • Dairy manufacturers producing milk powder, cheese and butter

      • Large landfills with fugitive methane emissions

      • Glass and brick manufacturers with gas-fired furnaces.

    Most have zero SGM infrastructure; no baselines, no ACCU strategy, no compliance owner.

    With around 18 months to get ready, organisations in the 25-100 kt range can use that time to:

       

        • Lock down facility-level scope 1 numbers

        • Test likely baseline treatment

        • Model ACCU exposure under review scenarios

        • Develop investment strategies

        • Build compliance capability.

      Create Advisory is running pre-review exposure assessments to help understand your exposure, map the compliance pathway, and stress-test P&L impact before the review lands. Contact us directly for more information.

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      The Federal Government's Safeguard Mechanism (SGM) review is scheduled to start in the second half of 2026. The Productivity Commission has recommended lowering the coverage threshold from 100,000 tCO₂-e to