The Safeguard Mechanism applies to roughly 200 of Australia’s biggest emitters. It obliges each facility to cut or offset about 5 % of its emissions every year, or face heavy penalties (P10).

Under the current rules, new coal and gas facilities must follow “best‑practice” emission limits that reflect the most efficient technologies available, but existing facilities are not required to meet those higher standards when they expand (P11‑P12).

Modelling by Reputex shows that 22 planned expansions and extensions over the next decade could emit eleven times more CO2 than if they were treated as new projects (P13). The Climate Council warns that this loophole could add 4.5 million tonnes of CO2 per year by 2035 (P9).

A concrete example is the Hunter Valley Operations extension. The plan adds $2.7 billion in capital and will release an extra 809 megatonnes of CO2, about two years of Australia’s total annual emissions. Because the mine is already covered by the Safeguard Mechanism, the extension is judged under existing‑project rules, leading to emissions 60 % higher than if it were classified as a new mine (P24‑P26).

These differences matter because they let large polluters increase output while avoiding the stricter limits intended for new projects. The Safeguard Mechanism is under review, and the Climate Council urges that “best‑practice” limits be applied to all new coal and gas emissions, regardless of whether they come from a brand‑new mine or an expansion (P19).