Renewable groups push to make operating coal plants pay for emissions

A coalition of clean-energy organisations has asked the Albanese administration to broaden the safeguard mechanism—Australia’s emissions-offset scheme for large polluters—to include coal- and gas-fired power stations that stay open beyond their declared retirement dates. The call comes after Origin Energy secured approval to keep the Eraring power station in New South Wales operating until 2029, heightening fears that other plants may also be delayed.

Advocates such as the Climate Council argue that requiring these plants to purchase carbon offsets would create a financial incentive to adhere to closure timelines, stabilising wholesale electricity prices and encouraging investment in renewables and batteries. The Australian Energy Council, representing owners like EnergyAustralia, Origin and AGL, counters that the proposal overlooks the essential reliability role of thermal assets and would push higher electricity bills onto households without delivering emissions cuts.

Energy Minister Chris Bowen has launched a review of the safeguard mechanism to ensure it remains fit for purpose beyond 2030. Independent analysis by the Grattan Institute suggests that extending the safeguard to coal could help meet emissions targets while adding only modest costs to household energy bills by 2050.