Australia’s parliament has passed the country’s most significant emissions-cutting legislation in more than a decade after the government won backing from Greens and independent MPs for a plan to tackle pollution from major industrial sites.
After weeks of negotiations behind closed doors, a deal was brokered between the Labor government and the Greens, a minor party of 15 MPs, which planned to legislate an explicit requirement that total emissions from major industrial installations must decrease, and not only be compensated.
Australia is the world’s third largest exporter of fossil fuels. The Greens argued the deal would end some new gas and coal development proposals, but acknowledged it would not prevent further expansion of the industry.
The agreement to pass changes to the policy known as the Safeguard Mechanism is seen as key to Prime Minister Anthony Albanese’s pledge to cut national carbon dioxide emissions by 43% by 2030 by compared to 2005 levels.
From July 1, many of the country’s 215 major polluting facilities – including fossil fuel operations, other mines, refineries and smelters – will be required to reduce emissions intensity by 5% per year, either through reductions absolute, or by buying controversial carbon offsets. Together they are responsible for around 30% of emissions in Australia.
While individual companies can purchase an unlimited number of offsets, the total absolute emissions under the program cannot increase and must decrease over time. New gas fields opened for the export project must offset all CO2 emissions, which increases costs for developers. Labor had rejected an early offer from the Greens to back the bill if the government agreed to ban new coal and gas developments in line with scientific warnings.
Climate Change Minister Chris Bowen hailed the deal as a ‘historic reform’ that delivered on its promise to reverse nearly a decade of inaction on the climate crisis under the right-wing coalition administration who held power from 2013 to last year.
He said it would cut 205 million tonnes of emissions by 2030, which he described as the equivalent of taking two-thirds of the country’s cars off the road. “Today is a historic day for the country to ensure our economy can take advantage of decarbonization opportunities and meet our ambitious climate goals,” Bowen said.
Greens leader Adam Bandt described negotiations with the government as “like negotiating with the political wing” of coal and gas companies, but said fossil fuels had “taken a huge hit”.
“To all of you who despair of the future and want real climate action, today you should have a step in your step because it shows that we can take on the coal and gas companies and win,” said Bandt. “The fight is not over, because in the midst of a climate crisis, Labor still wants to open up more coal and gas.”
The legislation faced opposition from the right-wing Liberal-National Coalition, although it introduced the safeguard mechanism in 2016. It initially promised that the safeguard would prevent rising industrial emissions, but in practice , it often allowed companies to issue beyond on-site limits without penalty.
Climate Change Coalition spokesman Ted O’Brien said the changes to the scheme made it a “stealth carbon tax” that would drive up costs. But the policy has won wide support from major business and industry groups. Environmental groups also backed the deal, but called on the government to stop allowing developments that increased Australia’s fossil fuel exports.