Are you set for Safeguard in 2021?

Welcome to the second instalment of In sync with Safeguard newsletter to keep you up to date with important information about the Safeguard mechanism.

As noted in the previous newsletter, the final parts of the transition to the new baseline setting arrangements, including the expiry of reported baselines, will take place in 2021.

Close to 100 facilities have already moved to replace expiring reporting baselines with a transitional calculated baseline or production-adjusted baseline.

As baseline options become more limited after 1 November 2021 it is important that you have plans in place to replace any expiring baselines.

Final deadline for 2020-21 baseline applications – 1 November 2021

1 November 2021 is the deadline to apply for calculated or production-adjusted baselines that start on 1 July 2020.

It is important to remember that 1 November 2021 is the deadline for a calculated baseline application using site-specific production variables and/or site-specific emissions intensities, unless applying under the inherent emissions variability criteria.

Any calculated baseline application received after 1 November 2021 can only use prescribed production variables and the associated default emissions intensities from Schedule 2 or 3 of the Safeguard Rule, unless applying under the inherent emissions variability criteria.

Baseline options

If you are still deciding which baseline type to apply for, we encourage you to make your decision as soon as possible before your baseline options become more limited. If you need assistance in understanding your options, please contact us.

Importantly, if you are planning to submit a calculated baseline application for the 1 November 2021 deadline, we recommend that you begin preparing the application now as it can take several months to complete.

A calculated baseline application must include an audit and we recommend you engage an auditor as soon as possible. A list of accredited auditors is available on our website at Register of auditors.

Should you need assistance preparing your application, you may wish to contact a third-party consultant.

Some things to consider when deciding on the type of baseline:

  • Is your facility likely to exceed the 100,000 tonnes CO2-e Safeguard scope 1 covered emissions threshold from 2020-21 onwards?
  • The type of baseline your facility currently has and when it expires:

    • Reported

    • If your facility is on a reported baseline, you can apply for a production-adjusted baseline without the need for a calculated baseline, provided only prescribed production variables and default emissions intensities are used. Reported baselines expire on 1 July 2021, or
    • You may apply for a transitional calculated baseline to establish site-specific emissions intensities using prescribed or site-specific production variables. This application is due 1 November 2021 unless applying under the inherent emissions variability criteria.

    Calculated baseline

    • If your facility is on a calculated baseline you may be eligible to apply for a new calculated baseline to establish updated site-specific emissions intensity values, or
    • You can transition to a production-adjusted baseline using production variables from your previous calculated baseline or using only prescribed production variables and default emissions intensity values.
  • Are prescribed production variables in Schedule 2 or 3 of the Safeguard Rule suitable for your facility?
    • Note that if you are using prescribed production variables, additional site-specific production variables are unlikely to be needed. If you think you need to use both prescribed and site-specific production variables, we recommend you contact us to discuss further.
    • If prescribed production variables are not suitable for your facility, you may apply for a calculated baseline using site-specific production variables. The deadline for this application is 1 November 2021.
  • Are the default emissions intensity values in Schedule 2 and 3 for each prescribed production variable suitable for your facility?
    • If the default emissions intensity values are not suitable, and you intend to apply for a calculated baseline using site-specific emissions intensities, then the application is due by 1 November 2021.

Safeguard guidance updates

We are pleased to announce that we have updated our website, with clear, simple information, to help you choose the right baseline for your facility. Our updates include:

We are developing a baseline options questionnaire to help you determine your baseline options going forward. We will notify you when it's available.

New prescribed production variables and default emissions intensities

Recent updates to the Safeguard Rule commenced on 17 July 2021. The amendment introduces further prescribed production variables and associated default emissions intensity values, including for steel, sugar, ethanol, plastics and gas transmission.

The updates also set a number of default values for remaining safeguard-covered sectors including pulp and paper, sodium cyanide and liquefied natural gas.

Further information on prescribed production variables and default emissions intensities, including inclusions and excluded emissions sources is available in the updated Safeguard Mechanism document.

Baseline variations due to global warming potential changes

If your facility’s baseline was affected by changes to global warming potentials (GWP) last year, you would have received, or will receive, a notification of intention to vary the baseline.

If you intend to apply for a production-adjusted baseline using site-specific emissions intensities from a calculated baseline that expired 2019-20 or earlier, then the emissions intensities may be eligible for an update due to GWP changes.

To learn more, see the safeguard mechanism.

If you have further questions, we encourage you to contact us via email to cer-safeguardbaselines@cer.gov.au or phone 1300 553 542.