Australia’s parliament has passed the country’s most significant emissions reduction legislation in more than a decade after the government won backing from Greens and independent MPs for a plan to deal with pollution from major industrial sites.
After weeks of closed-door negotiation, a deal was brokered between the Labor government and Greens, a minor party with 15 parliamentarians, that included legislating an explicit requirement that total emissions from major industrial facilities must come down, not just be offset.
Australia is the world’s third biggest fossil fuel exporter. The Greens argued the deal would stop some new gas and coal development proposals, but acknowledged it would not prevent further industry expansion.
The deal to pass changes to the policy known as the safeguard mechanism is considered key to prime minister Anthony Albanese’s commitment to cut national carbon dioxide emissions 43% by 2030 compared with 2005 levels.
From 1 July, many of the country’s 215 major polluting facilities – including fossil fuel operations, other mines, refineries and smelters – will need to cut emissions intensity by 5% a year, either through absolute cuts or by buying contentious carbon offsets. Together, they are responsible for about 30% of emissions in Australia.
While individual companies can buy an unlimited number of offsets, total absolute emissions under the scheme cannot increase and are required to come down over time. New gas fields opened for export project must offset all CO2 emissions, increasing costs for developers. Labor had rejected an initial offer from the Greens to support the bill if the government agreed to ban new coal and gas developments in line with scientific warnings.
The climate change minister, Chris Bowen, hailed the deal as a “landmark reform” that delivered on a promise to reverse nearly a decade of inaction on the climate crisis under the rightwing Coalition administration that held power from 2013 until last year.
He said it would lead to a 205m tonne reduction in emissions by 2030, which he described as equivalent to taking two-thirds of the nation’s cars off the road. “Today is an historic day for the country to ensure our economy can take advantage of the opportunities of decarbonisation and meet our ambitious climate targets,” Bowen said.
The Greens leader, Adam Bandt, described negotiating 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 everyone who is despairing about the future and wants real climate action, today you should have a spring in your step, because it shows we can take on the coal and gas corporations and win,” Bandt said. “The fight is not over, because in the middle of a climate crisis, Labor still wants to open more coal and gas.”
The legislation was opposed by the rightwing Liberal-National Coalition, despite it having introduced the safeguard mechanism in 2016. It initially promised the safeguard would stop industrial emissions increasing, but in practice often allowed companies to emit beyond onsite limits without penalty.
The Coalition’s climate change spokesperson, Ted O’Brien, said the changes to the scheme made it a “carbon tax by stealth” that would “decapitate” the economy. But the policy won broad support from major business and industry groups. Environment groups also supported the deal, but called on the government to stop allowing developments that expanded Australia’s fossil fuel exports.
