EMISSIONS REDUCTION FUND: SAFEGUARD MECHANISM CONSULTATION PAPER

The MCA considers the Safeguard Mechanism is working well, with the exception of one area.

Some facilities are currently running close to their allocated baseline due to incremental growth in output. On-going consultation is required to provide sufficient flexibility in baseline determination for those facilities that are participants in emission intensive trade exposed sectors.

More generally, the regulatory framework underpinning the mechanism was widely consulted. It strikes the right balance between constraining future emissions while allowing for growth.
Investment decisions have been made on the basis of the current framework.

Any proposal to fundamentally change the way it works would need to be widely consulted, with a view to ensure that existing investments are respected, while encouraging future growth opportunities.

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