Key Findings:
- If the Safeguard Mechanism was expanded after 2029-30 to meet the federal government’s target of reducing emissions by between 62 and 70 per cent by 2035, the direct carbon tax costs to covered facilities would be between $18.9 billion and $33.1 billion between 2030-31 and 2034-35.
- This is in addition to the existing costs incurred before 2030. IPA analysis published in 2025 estimated the direct carbon tax cost to facilities under the Safeguard Mechanism would be accumulative cost between $7.8 billion and $11.7 billion between 2023-24 and 2029-30.
- Western Australia would continue to be most affected state under the Safeguard Mechanism. Between 2030-31 and 2034-35, facilities in Western Australia will incur a direct carbon tax cost of between $6.3 billion and $10.8 billion, roughly a third of the entire nationwide carbon tax cost.
Annual Carbon Credit Cost of Safeguard Mechanism under proposed 2035 target; Australia 2030-31 to 2034-2035
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