Australia's Safeguard review closes: who wants an Australian CBAM, and what it means for Article 9

Submissions to Australia's 2026-27 review of the Safeguard Mechanism closed at 11:59 pm AEST on Friday, September 18, 2026, ending the six-week consultation window that opened on August 7. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) has scheduled the review for completion in early 2027, so no decision lands with the deadline. What the deadline does deliver is a public record: the submissions published so far show a steelmaker, a carbon market body, and a business sustainability council all asking Canberra to keep working toward an Australian border carbon adjustment, each on different terms.

That record matters beyond Australia. The review is weighing the Carbon Leakage Review's recommendation of a staged border carbon adjustment starting with cement and clinker imports, and it will also shape the scheme whose costs Australian exporters may one day ask the EU to recognize under Article 9 of Regulation (EU) 2023/956. Both threads run through the positions filed by September 18.

What the review asked, and what closed on September 18

The consultation paper put five areas on the table: scheme coverage, the future role of Safeguard Mechanism credits, ACCUs and international units, onsite abatement incentives, arrangements for trade-exposed facilities, and the recommendations of the Carbon Leakage Review. DCCEEW released the paper on August 7, 2026 and set the written submission deadline at 11:59 pm AEST on September 18, 2026. The department's consultation hub also lists the post-2030 decline rate for baselines among the questions asked.

Two of the five areas carry the border adjustment question.

• Arrangements for trade-exposed facilities covers the future of the Trade-Exposed Baseline Adjustment (TEBA), the provision that gives trade-exposed facilities more lenient baseline decline rates. As baselines tighten toward 2030, TEBA is the main leakage shield inside the scheme.
• The Carbon Leakage Review recommendations bring the border measure into scope. The review's final report, led by economist Frank Jotzo and published by DCCEEW on February 13, 2026, recommended a staged Australian border carbon adjustment referencing Safeguard Mechanism baselines, starting with cement and clinker and potentially extending to ammonia and derivatives, glass, lime, and steel, with TEBA removed for any commodity the border measure covers.

Why this review became the process vehicle for a possible Australia CBAM is set out in our coverage of the review that could produce its own CBAM. The event on September 18 is procedural but decisive for positioning: after this date, the arguments the government weighs are the ones already on file.

Who wants an Australian CBAM

Three organisations put support for Australian border adjustment work on the public record ahead of the deadline: BlueScope, the Carbon Market Institute, and BCSD Australia, while the Climate Council directed its submission at offsets and baselines rather than the border measure. The table below summarizes the published positions.

BlueScope's position is documented by the lobbying tracker LobbyMap: in consultation submissions filed in December 2024 and September 2025 ahead of this review, the steelmaker supported retaining TEBA alongside the introduction of an Australian CBAM. That pairing puts BlueScope in direct tension with the Carbon Leakage Review itself, which recommended removing TEBA for any commodity a border measure covers, on the logic that a facility cannot need two leakage shields for the same product. Whether an Australian CBAM replaces TEBA or sits on top of it is now a live design question in front of the government.

The Carbon Market Institute's submission, filed on September 18, 2026, states that CMI "continues to support the phased introduction of a border carbon adjustment for imports, starting with the most trade-exposed products and industries". The same submission broadly supports phasing out TEBA for a commodity once a border measure protects it, provided removal weighs onsite decarbonisation potential and sovereign manufacturing capability. CMI has run a member-based Safeguard Mechanism Taskforce since October 2025 to feed the review.

BCSD Australia's submission, published on its website, supports further detailed work on a cement and clinker border carbon adjustment, conditional on the measure meeting measurement, trade law, leakage, and administrative requirements.

The Climate Council's submission attacks the scheme's environmental performance rather than its trade architecture. It states the reformed mechanism is delivering "0.4% in genuine cuts at continuing facilities" and cites a 49 percent surge in offset usage within a year, alongside its call for sector-specific decline rates. Those asks matter for the border debate indirectly: the tighter the baselines and the smaller the offset valve, the higher the domestic carbon cost, and the stronger the case industry will make for border protection.

What it means for EU CBAM Article 9

Whether costs paid under the Safeguard Mechanism count as a "carbon price effectively paid" under the EU's draft Article 9 rules is an open question, and this review will shape the scheme the EU would eventually assess. The draft implementing regulation the European Commission published on May 13, 2026 recognizes foreign carbon prices through four pathways, and its emissions trading system pathway explicitly extends to baseline-and-credit systems, schemes where entities below an intensity baseline earn tradable credits and entities above it must buy them. The Safeguard Mechanism is a baseline-and-credit system.

The structural fit does not settle anything, for three reasons.

1. The draft is not adopted. No final Article 9 implementing regulation has appeared in the Official Journal as of the submission deadline, so the baseline-and-credit pathway remains provisional. The full draft mechanics are explained in our guide to the CBAM carbon price deduction.
2. No country holds recognition. The draft sets criteria for future determinations; it does not grant recognition to any scheme, Australian or otherwise.
3. TEBA cuts both ways. Concessions that reduce the carbon cost actually borne, such as more lenient trade-exposed baselines, are the kind of support the EU framework treats as rebates that reduce the recognized carbon price. A review outcome that keeps or expands TEBA could lower the deduction Australian producers might one day claim; an outcome that tightens baselines and phases offsets down would push the effective cost, and any future deduction, the other way.

For Australian steel and aluminium exporters already inside the EU regime, the review is therefore not only about a possible Australian import measure. It also determines how much verifiable domestic carbon cost they will carry into any future Article 9 claim.

What happens next

DCCEEW has scheduled the Safeguard Mechanism review for completion in early 2027, and no findings, government response, or border adjustment decision exist as of the submission deadline. Three markers frame the period ahead.

1. Early 2027: the review is due to complete, opening the government's decision window on the Carbon Leakage Review's border adjustment recommendation.
2. The trans-Tasman link: New Zealand climate change minister Simon Watts has said any New Zealand mechanism would be developed "in conjunction with Australia", so Wellington's timeline follows this review, as covered in our report on the Australia-aligned carbon border mechanism.
3. The design baseline: whatever the government decides, the recommended model on the table references Safeguard baselines rather than an ETS auction price, a structural difference from the EU regime mapped in our guide to the Australia border carbon adjustment.

The submissions are in. The published positions show that the question in Canberra is no longer whether anyone wants an Australian CBAM, but which version: a border measure that replaces TEBA, as the Carbon Leakage Review recommends, or one that runs alongside it, as the country's largest steelmaker asks.