The government’s main policy instrument for reducing greenhouse gases only covers a small proportion of emissions and allows companies to offset these emissions. This is totally inadequate when the climate imperative is to rapidly reduce the use of fossil fuels.

In theory, the Safeguard Mechanism should be reducing greenhouse gas emissions from industrial facilities. It applies to companies across a range of sectors, including mining, oil and gas extraction, manufacturing, transport and waste that emit more than 100,000 tonnes of CO2 each year.

There are two essential requirements to minimise the climate threat. One is to rapidly reduce the use of fossil fuels and the other is to draw down pollution from the atmosphere. Now we face a major problem because drawing down atmospheric pollution is being used as an alternative to stopping using fossil fuels.

The government is planning to review the Safeguard Mechanism sometime in 2026/2027.  If the genuine intention of the mechanism is to reduce greenhouse gas emissions, currently it is not fit for purpose. The review should address this. The core problem relates to carbon offsetting.

Carbon offsetting was introduced globally late last century with the objective of accelerating and optimising decarbonisation. It enabled companies that weren’t able, in the short to medium term to reduce their own emissions, to contribute to decarbonisation. Instead, they financed initiatives by others to reduce emissions or increase carbon sequestration.

As offsetting has evolved, it has predominantly been used to fund carbon sequestration. This has mainly been land based, for example planting trees and........

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