What the Safeguard Review Mean for ACCU Procurement

If your company operates a facility covered by Australia’s Safeguard Mechanism, you may be working out how many carbon units it needs this year and how much supply to line up for later. The first question depends on the rules already in place. The second is where the Safeguard review comes in. It could change how quickly a facility’s emissions limit falls after 2030 and which units it can use to cover any gap.

The Australian Government expects to publish its policy positions and any draft rule changes in early 2027. Most changes are expected to start from 1 July 2030. For companies buying Australian Carbon Credit Units (ACCUs), the review matters most when a purchase is intended for use under those future rules.

What is the Safeguard Mechanism review about?

The Safeguard Mechanism sets emissions limits for Australia’s largest emitting facilities. Each limit is called a baseline. If a facility has an emissions gap above its baseline, it can cover it by surrendering ACCUs, Safeguard Mechanism credit units (SMCs) or a mix of both. ACCUs come from eligible projects that avoid emissions or store carbon. SMCs come from eligible facilities that emit below their baselines. Read our guide to how ACCUs and SMCs work.

The government scheduled the review when it reformed the mechanism in 2023. The review asks how fast baselines should decline, which facilities should be covered and how the scheme can encourage more emissions cuts at industrial sites. The Climate Change Authority is advising on the future decline rate and on incentives for facilities to reduce their own emissions. The government’s consultation paper sets out an intention to keep both ACCUs and SMCs available, with the rules for their use after 2030 still under review.

What does the market look like today?

The Clean Energy Regulator, which administers both schemes, publishes data on the units facilities use and the credits projects generate. ACCUs made up about four in every five units surrendered for 2024–25. That shows how much facilities relied on ACCUs for compliance even with SMCs available for the same purpose.

More ACCUs are also being issued. Projects received 19.1 million ACCUs in the first nine months of 2026, about 28% more than in the same period a year earlier. At the end of September, about two-thirds of the ACCUs counted in the regulator’s holdings data were in accounts held by Safeguard companies or related businesses. Some holders may keep those units for future compliance. What’s available to buy depends on how much they choose to sell and when they can deliver.

What could change after 2030?

How quickly facilities’ baselines fall

The standard baseline decline rate is 4.9% a year through the 2029–30 financial year. The rules include a slower indicative rate of 3.285% from 2030–31. That gives companies one starting point for planning. The government will set the actual rate for the next five financial years through the review process.

A faster decline would leave less room for emissions at the same level of production. If a facility’s emissions stayed steady, its gap could grow and it could need more units. If a planned upgrade brings emissions down in time, that could narrow the gap.

The review also looks at which facilities are covered and the rules for sites that face international competition. Some of those sites can currently apply for a slower baseline decline. If the rules change, two sites in the same group could have different purchasing needs. The consultation paper also asks whether to lower the emissions threshold for joining the scheme, which could bring more sites into it.

How much of a gap ACCUs can cover

Today a facility can cover its full gap with ACCUs. The consultation paper sets out three options raised by stakeholders to encourage more emissions cuts at facilities.

• A limit on volume. A facility could use ACCUs for a smaller share of its obligation. It would have to cover the rest through other options, such as SMCs or further emissions cuts.
• Discounting. A facility could have to surrender more than one ACCU to cover one tonne of excess emissions. It would then need more ACCUs to cover the same gap if it chose to rely on them.
• Rules on which ACCUs qualify. Eligibility could depend on the method used to generate the credits or their vintage, which in the registry is the financial year they were issued. If new conditions applied, the transition rules would matter for both credits already held and deliveries under contract.

There’s also a separate review of the ACCU Scheme. The Climate Change Authority recommended examining whether credits from projects required to store carbon for 25 years should remain eligible for Safeguard compliance. That recommendation is a question for further examination. The current purchasing decision still depends on the eligibility rules that apply to the period in which the units will be used.

Whether banked SMCs can be used after 2030

Banking means holding units for later use. Under the current rules, facilities can use banked SMCs through the 2029–30 financial year. If that continues beyond 2030, companies with SMCs in their accounts could use them to cover part of a future gap and buy fewer ACCUs. If carryover is restricted, those companies would need to check which years they can use their holdings in and how much coverage they would need later.

The review also asks whether to retain borrowing and multi-year monitoring beyond 2030. Borrowing brings forward part of next year’s emissions limit. Multi-year monitoring lets an approved facility manage its gap over several years. Both can change when a facility needs to surrender units, which matters if a major upgrade is still in progress.

Whether international credits could be used

Eligible units for Safeguard compliance today are ACCUs and SMCs. The review’s scope includes international credits, and the consultation paper sets out the government’s intention to keep compliance focused on domestic emissions reductions. Multinational companies can plan their Australian compliance purchases around the domestic units while managing voluntary purchases for other purposes separately.

What could different outcomes mean for buyers?

The final rules could change the size of a facility’s gap and the share that ACCUs can cover. Those two effects can move in different directions. For example, a faster decline could increase the number of tonnes a facility has to cover, even if a new cap limits its use of ACCUs. The examples below show how the changes could work together.

The government’s starting point is to keep both types of units available. The draft rules will show how much flexibility buyers may have and whether there will be time to use units they already hold if eligibility changes. If those details are still open when the government publishes its positions, companies can update their scenarios and keep the longer-term volume in their purchasing plan flexible.

What can companies prepare now?

Confirm what you need for the next surrender

For the 2025–26 reporting year, the final day to surrender units is 31 March 2027. Start with the facility’s reported emissions and baseline, including any approved adjustments. Check the units available in the registry and which contracted deliveries will arrive in time. That gives you the gap still to cover. Build in time for delivery, the surrender request and the registry approvals.

If the ACCUs a facility expects to surrender reach 30% or more of its baseline, the operator must explain why it didn’t cut more emissions onsite. Operations can help document the options it considered and the barriers it faced. Procurement can confirm the expected number of ACCUs early enough for the team to prepare the explanation alongside the surrender request.

Build a range for future needs at each facility

Bring operations, sustainability and procurement together around the same assumptions. For each facility, estimate output and emissions, then record the expected reductions and start date for each major upgrade. Test what happens if an upgrade starts on schedule, if it starts later or if it delivers less than expected. Use current settings for the years through 2029–30 and test a range of baseline decline rates for the years that follow. This shows which part of the future requirement is likely across several scenarios and which part depends on a particular outcome.

Check the units you already have

List the ACCUs and SMCs you hold or have contracted, who controls them, when they can be delivered and which obligation they’re intended to cover. For ACCUs, include the project method and vintage. For SMCs, flag any volume you expect to use beyond 2030. If one site or entity holds units that another could use, check who can approve the transfer or surrender. That gives you a clearer view of how much the group may still need to source externally.

Decide how much future supply to commit to

A confirmed gap close to surrender calls for units that can be delivered in time for the registry process. For later years, a company can cover part of its expected need now and revisit the rest as upgrade dates and policy settings become clearer. When reviewing a longer agreement, ask what happens if the units arrive late or become ineligible for the intended compliance period. Check whether the seller can provide replacements and what conditions those units would have to meet.

Agree on when the team will revisit the purchasing plan. The government’s draft rules, a change to a major project’s start date or confirmation of a facility’s baseline can all change the volume you need. Having those checkpoints in the plan gives finance and procurement a reason to update their assumptions as new information comes in.

Looking to source ACCUs?

CnerG supplies ACCUs for Safeguard compliance and voluntary use. If you’re covering an upcoming surrender or assessing supply for later years, we can discuss available units and delivery timing. For a closer look at project types, documentation and what to ask before requesting a quote, read our ACCU buying guide.

Talk to the CnerG team.