Who must comply with Safeguard Mechanism baseline decline 4.9% pa?
The applicability test for Safeguard Mechanism baseline decline 4.9% pa (CER), computed across 35 industries, 9 business structures and 6 size bands.
Short answer: Only if
Applies only if you operate a facility emitting > 100 kt CO2-e (scope 1) a year. Whether it applies turns on a fact that no industry, structure or size settles on its own.
What the obligation is
Australia's 215 largest emitters face declining baselines under Safeguard Mechanism reform.
Safeguard Mechanism Crediting Amendment Act 2023 + Safeguard Rules in force 1 July 2023. Baselines decline 4.9% pa to FY30, then aligned to economy-wide 2050 net zero. SMCs traded.
The applicability test
Applies only if you operate a facility emitting > 100 kt CO2-e (scope 1) a year. Whether it applies turns on a fact that no industry, structure or size settles on its own.
How the regulator frames it: Facilities >100,000 tonnes CO2-e scope 1 emissions pa (215 facilities).
What triggers it: Threshold exceedance + emissions year close.
Jurisdiction: Commonwealth law, so the test is the same in every state and territory.
Which industries are in or out
Outcome across the 35 industries Rules Mate maps (5 of 35: only if a further fact applies; 30 of 35: no).
| Industry | Answer |
|---|---|
| Manufacturing | Only if a further fact applies |
| Mining & resources | Only if a further fact applies |
| Road transport & logistics | Only if a further fact applies |
| Aviation (incl. drones) | Only if a further fact applies |
| Maritime & ports | Only if a further fact applies |
| No | 30 other industries |
Business structure and size
Structure does not change the answer in the 5 industries it can reach: for every structure the answer is "only if a further fact applies".
| Size band | Answer in the 5 industries it can reach, any structure |
|---|---|
| No employees (turnover $100K–$1M) | No |
| 1–5 employees (turnover $100K–$1M) | No |
| 6–19 employees (turnover $1M–$3M) | No |
| 20–99 employees (turnover $3M–$10M) | No |
| 100–499 employees (turnover $10M–$100M) | Only if a further fact applies |
| 500+ employees (turnover $100M–$1B) | Only if a further fact applies |
Worked examples
Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:
- Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires a trigger outside this questionnaire.
- Pty Ltd company in manufacturing with 100–499 employees, turnover $10M–$100M: check whether it applies. applies only if you operate a facility emitting > 100 kt CO2-e (scope 1) a year.
When you need to check further
The engine shows this obligation as "check whether this applies" when a business has industry: Mining & resources / Manufacturing / Aviation (incl. drones) / Maritime & ports / Road transport & logistics and consolidated revenue ≥ $100M or revenue 50m maybe. It then applies only if you operate a facility emitting > 100 kt CO2-e (scope 1) a year. That fact is not something Rules Mate can infer from industry, structure or size.
What you must do, and when
- When due
- Per emissions year + 31 October reporting + SMC surrender.
- Frequency
- Annual
- Evidence to keep
- Annual NGER report + SMC ledger + reduction strategies.
- In force from
- 1 July 2023
- Status
- Current
- Priority
- Critical
Penalty for not complying
No maximum penalty is recorded for this obligation in the Rules Mate corpus; check the regulator source below.
Audit or assurance level
Rules Mate has not yet classified the audit or assurance level for this obligation. Any audit, review or certification requirement is set by the regulator source listed below.
Obligations with the same applicability test
If this obligation applies to you, so does this one: the engine uses the same rule for each.
Where it sits in the corpus
Rules Mate tracks 14 published obligations tagged "climate", 4 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 0 of those apply outright. This obligation is rated critical priority, and is a annual obligation.
Regulator, legislation and tools
Regulated by Clean Energy Regulator.
CER: Administers NGER (greenhouse and energy reporting), Safeguard Mechanism, ACCUs, and renewable energy targets.
NGER Act: Federal greenhouse + energy reporting.
Free tools that help with this obligation:
Questions
- Who must comply with Safeguard Mechanism baseline decline 4.9% pa?
- Applies only if you operate a facility emitting > 100 kt CO2-e (scope 1) a year. Whether it applies turns on a fact that no industry, structure or size settles on its own.
- Does Safeguard Mechanism baseline decline 4.9% pa apply to sole traders?
- Only if a further fact applies. Looking in the 5 industries it can reach and every size band, the engine's answer for a sole trader is: only if a further fact applies.
- Does Safeguard Mechanism baseline decline 4.9% pa apply to businesses with 1–5 employees?
- No (1–5 employees, turnover $100K–$1M).
- When is "Safeguard Mechanism baseline decline 4.9% pa" due?
- Per emissions year + 31 October reporting + SMC surrender.
Related
Sources
Computed by the Rules Mate applicability engine from the published obligation corpus; facts last checked 3 October 2026. Rules Mate is not a law firm and this is general information, not legal advice. Confirm your position with the regulator source or a qualified adviser before acting.