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Safeguard Mechanism after two years

When the reformed Safeguard Mechanism took effect in July 2023, the central question was whether Australia’s largest emitting facilities would respond. Two years later, the answer is more nuanced than either critics or supporters might have expected.

The mechanism is working, with carbon markets playing an important role in supporting compliance during these early years. Its long-term emissions impact will be shaped by how investment made over the first two years, and in the coming two years, translates into operational abatement.

MAG has completed a review of the data available using our proprietary frameworks to provide insights into how the safeguard mechanism is currently operating and its influence on the Australian Carbon Market.

For a discussion regarding these insights or the financial risks associated with breach / exposure and pricing implications please reach out to the MAG team and we would be happy to setup a conversation.