BCSD Australia lodges submission to the 2026–27 Safeguard Mechanism Review
BCSD Australia has lodged its organisational submission to the Australian Government’s 2026–27 Safeguard Mechanism Review.
The Review is an important decision point for the post-2030 operation of the Safeguard Mechanism and for businesses making long-term decisions about industrial decarbonisation, energy and infrastructure investment, carbon markets and trade exposure.
What BCSDA is proposing
BCSDA’s central proposition is that the Safeguard Mechanism should be calibrated rather than rebuilt.
We recommend that future settings distinguish three different measures of performance:
contribution to Australia’s emissions targets;
gross or covered emissions, emissions intensity and physical abatement; and
enduring investment in lower-emissions Australian production.
Five priorities for the Review
Measure transformation, not compliance alone. Government should publish a concise set of indicators covering emissions outcomes, credit use and committed versus delivered low-emissions investment.
Consider flexibility as a package. ACCUs, Safeguard Mechanism Credits, banking, borrowing, multi-year monitoring and cost containment should be assessed together rather than instrument by instrument.
Set the post-2030 trajectory transparently. Future decline rates, coverage and related settings should be supported by modelling of investment, production, abatement feasibility and competitiveness.
Address carbon leakage sequentially. BCSDA supports further detailed work on a cement and clinker border carbon adjustment, subject to workable measurement, trade-law, leakage and administrative tests.
Reduce implementation friction. Existing reporting and disclosure information should be reused wherever possible, with interoperable data and proportionate transition requirements.
Why it matters to business
Safeguard settings influence more than compliance costs. They can affect capital allocation, project economics, energy and infrastructure requirements, credit-market strategy, trade exposure, procurement and supply chains.
BCSDA’s submission therefore focuses on whether the mechanism can convert a credible emissions constraint into physical emissions reductions and durable investment while maintaining integrity, competitiveness and workable implementation.
What happens next
BCSDA will continue to track the Review, subsequent Government decisions and implementation developments through our Safeguard Mechanism Tracker. We will assess material outcomes against the positions and evidence contained in our submission and translate relevant changes into practical intelligence for Members.
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