🏭 Introduction to Major Facility Emissions in Australia

Summary 

• ‘Major facilities’ refer to Australia’s largest industrial facilities. These are known as 'Safeguard facilities' because they’re regulated under the Safeguard Mechanism—Australia’s policy for managing emissions at large-scale operations.
• The Safeguard Mechanism is a law that sets emissions limits—called baselines—for Australia’s largest industrial facilities. 
• Electricity facilities (shown in brown below) share a sector-wide baseline; all others have individual limits.

What are Safeguard Facilities?

The Safeguard Mechanism applies to any facility that emits more than 100,000 tonnes of CO₂-equivalent in a financial year.

• This typically includes 210 to 220 facilities (that are not grid-connected electricity facilities), though the number varies year to year.

Most are large industrial sites—coal mines, gas processors, aluminium smelters, and manufacturers. However, a ‘facility’ isn’t always a single location. Under the NGER Act, it refers to activities that produce emissions or use energy, which may span multiple sites. For example, transport companies may report grouped activities as a single Safeguard facility. (Read more: CER)

• Grid-connected electricity facilities—which number in the hundreds—are treated as a group by the Safeguard rules.

Key Metrics

For each major facility, OnlyFacts tracks:

• Gross emissions: the reported emissions before credits are added or used
• Net emissions: the emissions after credits are incorporated (net = gross emissions minus carbon credits used plus carbon credits created.
• Baselines: the legislated emissions limit for each facility (except electricity)
• Credits+: carbon credits created. These are generally Safeguard Mechanism Credits (SMCs), created if a facility emits less than its baseline
• Credits-: carbon credits used. These are generally Australian Carbon Credit Units (ACCUs), surrendered if a facility emits over its baseline

Setting Baselines and Why They Matter

The Safeguard Mechanism sets legislated emissions limits—called baselines—for Australia’s largest emitters. Each baseline is calculated by multiplying a facility’s output by an emissions-intensity factor. (Read more: DCCEEW)

• In general, baselines fall by 4.9% annually, requiring facilities to reduce net emissions over time.

The Electricity Sector

• The Safeguard Mechanism treats the electricity sector differently. It applies a single ‘sectoral’ baseline across all electricity generators connected to one of Australia’s main electricity grids.
• The sectoral baseline is 198 million tonnes of CO₂-e, based on average emissions from 2009–10 to 2013–14.

Other Special Cases

Other facilities fall under tailored rules, including:

• Trade – Trade-exposed facilities may have tailored baselines to help maintain competitiveness. This is called the Trade-Exposed Baseline Adjusted framework. Read more here.
• Multi-year monitoring periods – Companies can apply for baselines that average emissions over multiple years. Read more here.

The Role of Credits and Why They Matter

• If a facility exceeds its baseline, it must offset the excess—typically by buying and surrendering (i.e. using) Australian Carbon Credit Units (ACCUs).
• If it stays below its baseline, it earns Safeguard Mechanism Credits (SMCs), which it can sell or keep for future use.
• Each ACCU or SMC represents one tonne of CO₂-equivalent.
• A wide gap between emissions and baseline creates ‘headroom’—which can translate into revenue via SMCs.

About the Data 

• Companies report their own emissions using methods approved under the National Greenhouse and Energy Reporting scheme.
• Reporters choose from a range of methods, balancing cost and accuracy. They must declare the method used for each source. Direct measurement is rare but does occur, particularly in the coal sector, where methane monitoring is required by law for safety reasons. Emissions data is typically estimated using activity data—such as fuel consumption—multiplied by standard emissions factors.
• How reliable is it? The Clean Energy Regulator may audit reported data, but most reporting is unaudited. Audits aim for reasonable assurance—strong confidence, but not certainty. All figures involve assumptions and estimates.
• Can we trust it? The key is consistency. Using the same method year after year helps ensure meaningful comparisons over time. 

Read the full methodology here.

About Industry Classifications

Companies and facilities are classified by The Australian and New Zealand Standard Industrial Classification (ANZSIC) system.

• Facility classifications are provided by the Clean Energy Regulator.
• Company classifications are based on OnlyFacts research.

A company's ANZSIC division reflects its main activity. Read more here.

The Big Picture

When you look at the Major Facilities dashboard, the first thing you see is the big picture.

This chart shows emissions from major facilities (electricity and Safeguard) make up about two-thirds of Australia’s total emissions. Between 2022–23 and 2023–24:

• Emissions from electricity facilities fell 0.4% from 140.0 to 139.6 million tonnes of CO₂ equivalent.
• Emissions from Safeguard facilities fell 1.9%, from 138.7 to 136.0 Mt CO₂-e.