Safeguard mechanism broken. The opportunity for legislative repair is now.

Schoo said the safeguard mechanism could achieve credible emissions cuts, but needed “serious surgery”, including tightening limits for the 10 companies that made up most of the emissions. Labor’s decisions on the design of the scheme would “make or break” Australia’s 2030 target, she said.

“A predictable phase down [of baselines] would give industry incentives to come up with innovative energy-saving solutions to run their businesses more cleanly and efficiently,” she said.

Labor urged to axe $1.9bn in ‘zombie’ fossil fuel subsidies promised by the Coalition

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The analysis found several major emitters were trying to expand operations, a change that could add about 12m tonnes a year. In its submissions to the government, the ACF said any new or expanding facility entering the scheme should have to be carbon-neutral.

A spokesperson for the climate change minister, Chris Bowen, earlier this week said an extensive consultation process on the design of the safeguard was still under way.

“We know industry and stakeholders will have a wide range of views on these reforms, which is why the Albanese government is going through this genuine consultation process,” the said.

“The government will consider these views on their merit before making any decisions on the final design.”