Under the Albanese Government’s climate policy, the Safeguard Mechanism is intended to be the primary mechanism for reducing Australia’s emissions and achieving its climate change mitigation targets (43% reduction by 2030 and net zero by 2050). To do this, the Government is making changes to the Safeguard Mechanism to convert it from a regulatory instrument that was originally designed to constrain emission increases into an emissions trading scheme that drives down emissions. Under the enhanced Safeguard Mechanisms, covered facilities will be subject to emission caps based on the emissions-intensity of their operations that will decline over time. These facilities will be able to meet their emission caps (called baselines) by cutting onsite emissions or buying and surrendering either ‘Safeguard Mechanism Credits’ (a form of emission permit issued to covered facilities if their emissions are below their caps) or Australian carbon credit units (ACCUs).