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Miners divided over safeguard mechanism future

The mining industry is reacting to the impending safeguard mechanism legislation, which will enforce average emissions limits on large scale industrial activities.

In March of this year, Parliament passed the Safeguard Mechanism (Crediting) Amendment Bill 2023, which is set to tighten the belt on emissions in line with the nation’s target to reduce emissions by 43 per cent by 2030 – and the greater goal of net zero by 2050.

The new law will come into effect from July and will enforce baselines on facilities with scope one emissions in excess of 100,000 tonnes per year.

That covers 215 of the country’s top polluters from the mining, quarrying, oil and gas, and a handful of other industries, which account for almost 30 per cent of Australia’s total emissions.

These strict baselines are set to be incrementally lowered each year, with the short-term goal of reducing annual emissions from 140 million tonnes to 100 million tonnes by 2030.

On average, emissions-intensive companies will have to reduce emissions by almost five per cent per year.

But contention swirls when it comes to deciding what exactly those averages ought to account for. BHP wants a separate average for steelmaking and thermal coal, while others instead want to divide underground and surface coal mines. Glencore, however, has urged the Federal Government not to convolute the mechanism and stick to a single average for the entire mining sector.

“Glencore wants the Government to stick to its policy principles for the safeguard mechanism rather than going down a risky pathway of doing special deals,” a Glencore spokesperson said, as reported by the Australian Financial Review.

“Our focus is on continuing to engage with Government and ensuring that whatever approach is adopted for coal baselines is simple, transparent and equitable.”

The Federal Government is actively negotiating with mining companies ahead of the July 1 implementation.

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