Managing excess emissions

If a facility’s net emissions number for a monitoring period exceeds its baseline, this is called an excess emissions situation. Responsible emitters of facilities must manage the excess emissions situation before 1 April.

We publish information about facilities that are in an excess emissions situation on or after this compliance deadline. See our excess emissions situation data.

Options to manage excess emissions

Responsible emitters can surrender Australian carbon credit units (ACCUs) or Safeguard Mechanism credit units (SMCs) to reduce their facility’s net emissions number.

They may also be eligible to manage excess emissions by obtaining a flexibility measure from the Clean Energy Regulator:

• trade-exposed baseline-adjusted (TEBA) determination
• borrowing adjustment
• multi-year monitoring period (MYMP).

Surrender ACCUs and SMCs

To surrender ACCUs or SMCs, responsible emitters must apply through the Unit and Certificate Registry. Responsible emitters can use their own account, or arrange surrender from another person’s account.

Find out more in our SMC issuance and carbon unit surrender guideline and surrender walkthrough.

TEBA determination

Responsible emitters may apply for their facility to become a TEBA facility if it produces trade-exposed products and meets certain financial requirements.

TEBAs mitigate risk of cross-border carbon leakage by supporting the competitiveness of trade-exposed businesses, as foreign competitors do not face comparable carbon costs.

TEBA facilities receive a reduced baseline decline rate for 3 financial years:

• A non-manufacturing facility may be eligible for a decline rate as low as 2%.
• A manufacturing facility may be eligible for a decline rate as low as 1%.

Responsible emitters must demonstrate both of the following:

1. Their facility’s product is an emissions-intensive trade-exposed production variable listed in Schedule 2 of the Safeguard Rule.
2. The cost of complying with safeguard obligations exceeds 3% of either:
   • the facility’s revenue (for a non-manufacturing facility)
   • the facility’s earnings before interest and taxation (for a manufacturing facility). 

TEBA applications must include an independent audit report. Learn more about these requirements in our TEBA determination application guideline.

TEBA applications are due by 31 October after the first financial year that the reduced decline rate is proposed to apply. 

Borrowing adjustment

Responsible emitters may apply to increase their facility’s baseline for a financial year by borrowing a portion from the facility’s baseline for the following financial year. This is called a borrowing adjustment.

The facility’s baseline for the following financial year will then decrease by the borrowed amount and a further 10% of the t CO₂-e borrowed.

For borrowing adjustments that started in 2024–25 or earlier, the further decrease to the following financial year’s baseline was 2% of the t CO₂-e borrowed.

Borrowing adjustment applications must:

1. specify the facility's proposed borrowing adjustment (up to 10% of the baseline) for the financial year
2. demonstrate that the facility is likely to exceed the safeguard threshold in the next financial year.

A borrowing adjustment is not available to increase the baseline for a financial year if the facility has:

• an MYMP in place 
• been issued SMCs for that financial year. 

Learn about the application requirements for responsible emitters in our borrowing adjustment application guideline.

Borrowing adjustment applications are due by 28 February after the relevant financial year.

MYMP declaration

Responsible emitters with a credible plan to reduce their facility’s excess emissions may apply for an MYMP.

Under an MYMP, a facility’s net emissions and baseline are not calculated and managed each financial year. Instead, this happens at the end of a multi-year period of 2 to 5 years. MYMPs must end no later than 30 June 2030.

An MYMP allows the responsible emitter to focus attention and investment on their emissions reduction project rather than on managing safeguard excesses that arise during the project. 

Applications for MYMPs must include:

• the duration of the proposed MYMP
• the amount (or reasonably assumed amount) of covered emissions the facility will emit in the first year
• the responsible emitter’s plan to effectively reduce emissions so it is at or below its extended baseline by the end of the MYMP – this plan determines whether we can declare the MYMP
• a summary of the plan for publication on our website
• an explanation of any known risks that might cause the facility to exceed its baseline for the MYMP.

Learn about the application requirements for responsible emitters in our multi-year monitoring period application guideline.

 MYMP applications are due by 15 November after the first financial year of the proposed MYMP.

Alter your existing MYMP

Responsible emitters with an MYMP in place may apply through Online Services to:

• shorten it to a minimum of 2 years, if the facility is not reducing emissions as described in its plan
• extend it to a maximum of 5 years
• revoke the MYMP declaration.

Exemption declarations

Responsible emitters may apply for an exemption from safeguard liability for a financial year (or other monitoring period). Their facility’s net emissions must have exceeded its baseline as a direct and sole result of either a natural disaster or criminal activity.

We will not approve applications if the excess emissions are an indirect result of the event. For example, where the responsible emitter's response to market changes caused by the natural disaster results in the excess.

Learn about the application requirements for responsible emitters in our exemption declaration guideline.

Exemption applications are due by 31 October after the relevant financial year. 

To access the form and apply for an exemption you must contact us.

Compliance and enforcement

Responsible emitters must make sure their facilities are not in an excess emissions situation before the compliance deadline of 1 April. 

Failure to comply with this obligation is a contravention of a civil penalty provision. This will result in enforcement consequences, such as:

• pursuing civil penalty proceedings in court
• issuing infringement notices
• accepting enforceable undertakings.

We consider all non-compliance circumstances when deciding the appropriate enforcement response. More information on these factors can be found in our compliance policy.

Learn more about our compliance approach.

Anti-avoidance measures

Anti-avoidance measures prevent a responsible emitter from defining or redefining a facility in a way that deliberately avoids Safeguard Mechanism obligations. 

Learn more about reporting under the National Greenhouse and Energy Reporting (NGER) Scheme.