On August 10, 2025, a wave of new data and analysis reignited debate over Australia’s climate policy and the global role of fossil fuels in driving climate change. While governments and industry tout ambitious targets and mechanisms, mounting evidence suggests the world’s reliance on fossil fuels is not just persisting—it’s being quietly reinforced, with devastating consequences for the planet and human health.
Australia’s Safeguard Mechanism, a cornerstone of the country’s approach to limiting industrial greenhouse gas emissions, has come under fresh scrutiny. According to a detailed analysis published by The Australia Institute, the scheme is dominated by the coal and gas industries, which together account for more than 54% of all emissions covered by the mechanism. Despite the scheme’s design—where each facility receives a target emissions level that tightens by nearly 5% per year—critics argue that its structure is riddled with loopholes.
Facilities under the Safeguard Mechanism have three main ways to meet their targets: purchase carbon offsets, buy ‘overperformance’ credits from other emitters, or actually reduce their emissions. In practice, the first two options are proving far more popular, especially among coal and gas operators. The coal mining sector, in particular, is the most reliant on carbon offsets to adjust its net emissions, allowing companies to claim compliance without making real reductions.
The Clean Energy Regulator, the government body overseeing the scheme, uses net emissions figures—which include the effects of carbon offsets—to paint a picture of progress. However, as the The Australia Institute analysis shows, this can be misleading. The raw data reveals that many facilities are not just meeting their targets through accounting tricks, but are actually being rewarded for emissions that are still alarmingly high.
Chevron’s Gorgon facility, one of the country’s largest and most polluting, offers a striking example. In the 2023-24 reporting year, Gorgon’s emissions were the highest they had been since FY19. Yet, because the baseline set for the facility was so generous—far above its actual emissions—Chevron was able to generate 388,803 ‘safeguard mechanism credits’. These credits can be sold to other polluters, effectively turning high emissions into a revenue stream. As the report puts it, "Not only are high-emitting facilities being issued credits (that they can sell) for being under their baselines, fossil fuel companies in the dataset seemed to be issued a disproportionate amount."
In total, fossil fuel extraction facilities, which represent 54% of all emissions covered by the scheme, received 74% of all safeguard mechanism credits issued in FY24—a staggering 6.1 million credits. This system, critics say, allows Australia’s biggest polluters not only to avoid genuine emissions cuts, but to profit from a system meant to curb their environmental impact.
Why does this matter on a global scale? Because fossil fuels—coal, oil, and gas—are by far the largest contributors to climate change. According to a United Nations report cited by CleanTechnica, fossil fuels account for over 75% of global greenhouse gas emissions and nearly 90% of all carbon dioxide emissions. The energy sector alone, which is dominated by fossil fuel use, produces a whopping 75.7% of worldwide greenhouse gas emissions, as noted by the World Resources Institute.
It’s not just environmentalists making this case. The US Environmental Protection Agency states unequivocally, "Burning fossil fuels changes the climate more than any other human activity." In the United States, about 74% of human-caused greenhouse gas emissions come from burning fossil fuels for energy, according to the US Energy Information Administration.
Academic institutions have also weighed in. Harvard University, which aims to be fossil-fuel free by 2050, explains its rationale bluntly: "Burning fossil fuels is the primary driver of climate change. The use of fossil fuels pollutes the air and water—damaging human health and disproportionately harming vulnerable communities." Yale Climate Connections, too, has highlighted how insurance companies, often seen as risk-averse, have become major financiers of fossil fuel companies, despite the industry’s outsized role in the climate crisis.
The health impacts are staggering. Research from Harvard University, in collaboration with several UK universities, found that more than 8 million people died in 2018 from fossil fuel pollution—about 1 in 5 deaths worldwide. Air pollution from burning fossil fuels like coal and diesel is responsible for millions of premature deaths annually and hundreds of thousands in the United States alone, as reported by UC Berkeley’s School of Public Health.
The United Kingdom’s Parliament reports that 78% of its energy still comes from fossil fuels, which are responsible for the majority of the UK’s greenhouse gas emissions. In Canada, the government states that nearly 80% of greenhouse gas emissions from human sources are due to the burning of fossil fuels and industrial processes. These numbers are echoed around the globe, from Brazil—where Environment Minister Marina Silva has proposed a roadmap to end fossil fuel use, following the Dubai deal of 2023—to the vast Amazon rainforest, which stands threatened by fossil fuel expansion.
Even the Vatican has joined the chorus. The late Pope Francis described fossil fuels as the main culprit of climate change, urging the world to substitute them with sustainable energy accessible to all, especially the poor. He called on wealthier countries to help poorer nations leapfrog to cleaner technologies through financing and technical assistance, and stressed that maximizing energy efficiency is a vital part of the solution.
It’s not just governments and faith leaders speaking out. Since 1988, just 100 companies have been responsible for more than 70% of the world’s greenhouse gas emissions, according to a widely cited report. The overwhelming scientific consensus, summarized in an Oxford Open Climate review, is clear: "Fossil fuels and the fossil fuel industry are the root cause of the climate crisis, harm public health, worsen environmental injustice, accelerate biodiversity extinction, and fuel the petrochemical pollution crisis." The costs—measured in millions of premature deaths, trillions of dollars in damages, and the escalating disruption of ecosystems—are incalculable.
Against this backdrop, mechanisms like Australia’s Safeguard are under fire for failing to deliver real change. As the data show, the system not only allows fossil fuel companies to avoid reducing emissions, but in some cases, to profit from a scheme designed to hold them accountable. Meanwhile, the world continues to grapple with the consequences of a fossil-fueled status quo, from spiraling climate disasters to mounting health crises.
The challenge now is not just technical or economic, but political. Will countries like Australia reform their climate policies to close loopholes and force real emissions cuts? Or will powerful interests continue to shape policies that look effective on paper, while the climate crisis intensifies? One thing is certain: the stakes could not be higher, and the world is watching.
