Gippsland Basin facility

Gippsland Basin facility is a oil & gas facility operated by ESSO AUSTRALIA RESOURCES PTY LTD in VIC. Like all covered facilities, LNG processing, gas extraction and pipeline operations release methane and combustion emissions. Under Australia's Safeguard Mechanism, Gippsland Basin facility must keep its annual emissions below a stepping-down baseline — or purchase carbon credits to cover any overage.

In 2023–24, Gippsland Basin facility reported emissions of 1.51 Mt against a baseline obligation of 1.35 Mt — an overage of 156 kt. The facility covered the 156 kt overage by purchasing 155,994 Australian Carbon Credit Units (ACCUs) — credits generated by carbon abatement projects elsewhere in Australia such as soil carbon farming, avoided land clearing, and landfill gas capture.

Purchasing credits is legal and intended by the Safeguard Mechanism's design — the policy deliberately allows facilities to choose between cutting on-site emissions or funding abatement elsewhere in the economy. Whether credit purchases represent genuine long-term decarbonisation depends on whether the facility's absolute emissions are trending down over time. The chart above shows the trajectory since reporting began. This question applies to all covered facilities under the Safeguard Mechanism, not Gippsland Basin facility specifically.

Across the oil & gas sector, 8 of 8 covered facilities reported emissions above their baseline in 2023–24. The table below compares Gippsland Basin facility with other oil & gas facilities covered by the Safeguard Mechanism.