(Bloomberg) -- Australia passed a key piece of climate legislation targeting its biggest polluters in a bid to meet a goal to drastically cut emissions by the end of this decade. 

More than 200 facilities will need to reduce their pollution by 4.9% a year by 2030 from July 1 after Prime Minister Anthony Albanese’s Labor government secured the support of the left-wing Australian Greens party and independent senators.

Albanese won office in elections last May on a platform that promised to end the nation’s reputation as an international climate laggard, and quickly passed more ambitious targets to cut emissions 43% by 2030 from 2005 levels. Still, Australia has struggled to rein in pollution from its massive coal and gas industries, which are major contributors to the nation’s A$422 billion ($282 billion) in resources and energy exports.  

The facilities covered under the safeguard mechanism, ranging from liquefied natural gas plants to coal mines and aluminum smelters, account for around a quarter of Australia’s pollution. Planned curbs would deliver about 205 million tons of abatement by the end of this decade. 

Australia still has a long way to go to reach its climate targets. Emissions in the year to September 2022 were 21% below those in the 12 months to June 2005, the current baseline, according to the government.

A key point of contention with the Greens was the potential for unlimited use of carbon offsets. Under the new legislation, major polluters will be required to justify their reasoning for relying on carbon credits to meet more than 30% of their emissions cuts.

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New gas fields must also fully offset their emissions as soon as they begin production, threatening to increase costs for operations with higher levels of carbon dioxide. While the Greens party claimed the laws will put an end to “about half” of the 116 new coal and gas projects under consideration in Australia, Albanese and his party have been insistent they don’t rule out new fossil fuel developments.

--With assistance from Sybilla Gross.

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