Australia's Department of Climate Change, Energy, the Environment and Water (DCCEEW) released the discussion paper for the 2026-27 review of the Safeguard Mechanism on Friday, August 7, 2026. Written submissions close at 11:59 pm AEST on September 18, 2026, a six-week window, and the department has scheduled the review for completion in early 2027. Among the topics on the table is the Carbon Leakage Review's recommendation of a staged Australian border carbon adjustment starting with cement and clinker imports.
That single agenda item makes this consultation the concrete process vehicle for a possible Australia CBAM. Nothing has been decided: the border measure is a recommendation under consultation, not policy. But the review is now the forum in which the Australian government weighs it, and it is the process New Zealand explicitly tied itself to on August 5, when climate change minister Simon Watts said any New Zealand mechanism would be built "in conjunction with Australia". For exporters already managing the EU regime and preparing for the UK's, the submission window that opened on August 7 is where a third border carbon regime starts to take shape, or does not.
What the 2026-27 Safeguard Mechanism review consults on
The discussion paper opens consultation on scheme coverage, the future role of ACCUs and other units, onsite abatement incentives, arrangements for trade-exposed facilities, and the recommendations of the Carbon Leakage Review. The Safeguard Mechanism is Australia's emissions scheme for large industrial facilities, and this review sets its post-2030 direction. The main areas under consultation are set out below.
- Scheme coverage arrangements, taking into account competitiveness issues, abatement potential and regulatory compliance
- The future role of Safeguard Mechanism credits, ACCUs and international units, including how far facilities can rely on offsets rather than cutting their own emissions
- Onsite abatement, and whether the scheme is appropriately incentivising it
- Arrangements for trade-exposed facilities, and whether they remain suitable
- The recommendations of the Carbon Leakage Review, which is where the border carbon adjustment enters the process
Carbon Pulse reports that the consultation canvasses limits on ACCU use and the vintaging of units alongside the onsite abatement question. Climate Change and Energy Minister Chris Bowen framed the exercise around Australia's next target period, saying the review is "focused on ensuring the Safeguard Mechanism continues to drive real, durable emissions reductions" and "will place particular emphasis on domestic abatement, industrial decarbonisation and strengthening Australia's energy security", as reported by Energy Source & Distribution.
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The border carbon adjustment is under consultation, not decided
The review will consider the Carbon Leakage Review's recommendation of a staged Australian border carbon adjustment beginning with cement and clinker imports, a recommendation that remains a proposal with no implementing legislation before Parliament. The Carbon Leakage Review, led by economist Frank Jotzo and published by DCCEEW on February 13, 2026, found that leakage risk from imports will grow as Safeguard Mechanism baselines tighten toward 2030, and recommended a border measure sequenced by leakage risk: cement and clinker first, potentially extending later to ammonia and derivatives, glass, lime and steel.
The recommended design differs structurally from the EU model. Rather than a certificate market priced at emissions trading auction averages, the recommended Australian design would reference the same Safeguard Mechanism baselines that domestic facilities already report against. The full recommendation, including the import exposure modelling behind the cement-first sequencing, is covered in our guide to the Australia border carbon adjustment. What changed on August 7 is procedural, and that matters: the recommendation now sits inside a formal consultation with a submission deadline, which is the step that turns a report into a policy decision or shelves it.
The trans-Tasman trigger
New Zealand tied its own border carbon thinking to this exact review three days before the paper appeared. On August 5, 2026, Simon Watts told the Carbon Forestry 2026 conference in Rotorua that any New Zealand CBAM would be developed "in conjunction with Australia", with a move probably coming "later next year", as reported by Argus Media and Carbon Pulse. Our coverage of the Australia-aligned carbon border mechanism signal from New Zealand noted at the time that Wellington's timeline follows Canberra's decision window rather than leading it.
The Safeguard Mechanism review is that decision window. If the Australian government acts on the Carbon Leakage Review recommendation after the review concludes in early 2027, the ministerial signal from Wellington points to a trans-Tasman pair of aligned mechanisms rather than a single Australian one. If Canberra shelves the recommendation, the New Zealand timeline loses its anchor.
Where the review fits among border carbon regimes
Australia's consultation puts a third border carbon regime into a formal decision process, alongside the EU mechanism in its definitive period since January 1, 2026 and the UK mechanism launching January 1, 2027. The table below sets out where the four connected regimes stand as of mid-August 2026.
| Jurisdiction | Status | Design | Next milestone |
|---|---|---|---|
| European Union | Definitive period in force since January 1, 2026 | Certificates priced at quarterly EU ETS auction averages | First annual declaration due September 30, 2027 |
| United Kingdom | Adopted, pre-launch | Direct tax administered by HMRC, referencing the UK ETS | Launch on January 1, 2027 |
| Australia | Under consultation | Recommended staged adjustment referencing Safeguard Mechanism baselines, cement and clinker first | Submissions close September 18, 2026; review completes early 2027 |
| New Zealand | Ministerial signal only | Would be developed "in conjunction with Australia" | Follows the Australian review outcome |
Each row runs on a different rulebook. The EU system is certificate-based, while the UK CBAM takes the form of a tax payable to HMRC, and the Australian recommendation would bolt onto an existing industrial baseline scheme. The full jurisdiction-by-jurisdiction comparison, including Canada and the other economies running feasibility work, is maintained in our guide to the countries implementing their own CBAM.
What multiplying regimes mean for exporters
Each additional border carbon regime multiplies the documentation and verification requirements an exporter faces for the same tonne of product. A cement or steel producer selling into the EU, the UK and a future trans-Tasman market would need to satisfy three separate reporting systems, each with its own system boundaries, default values and price reference. The EU case already shows the sums involved: a report covered by Carbon Pulse puts the Korean steel sector's CBAM exposure at USD 4 billion, and Malaysia has costed its 2026 CBAM steel bill at USD 237 million. An Australian mechanism would add a fourth set of paperwork for exporters in its scope, starting with cement and clinker suppliers in Asia.
Four dates now frame the question, listed in order below.
- September 18, 2026: submissions to the Safeguard Mechanism review close at 11:59 pm AEST.
- January 1, 2027: the UK CBAM launches, doubling the number of operating border carbon regimes.
- Early 2027: the review is scheduled to complete, opening the government's decision window on the border adjustment recommendation.
- September 30, 2027: the first annual EU CBAM declaration falls due, covering calendar year 2026.
Exporters and industry bodies with a stake in the outcome have until September 18 to put their position on the record with DCCEEW. Whatever Canberra decides, the direction of travel is set: border carbon adjustment is spreading from a single EU experiment toward a multi-jurisdiction reality, and the compliance burden compounds with each new regime.