How the emissions rules work

EMISSIONS SAFEGUARD RULES

* Covers about 140 businesses which together account for half of Australia's carbon emissions.

* Sectors include power generation, mining, oil and gas extraction, gas supply, manufacturing, transport, waste and engineering construction.

* Facilities with direct emissions of 100,000 tonnes or more must keep their net emissions at or below a baseline level from July 1, 2016.

* The baseline is set at the highest point of emissions over the past five years.

* If a business exceeds its baseline level it could receive an infringement notice, enforceable undertaking, injunction or (as a last resort) a fine of $18,000 a day up to a maximum of $1.8 million.

* Because emissions have fallen for many businesses in recent years, the baseline will allow some to actually boost their emissions without penalty.

* If a business wants to expand production, it can make a case for the baseline to be raised.

* New businesses will be able to set a baseline and reset it as they expand.

* Third pillar of the Abbott government's direct action plan, which also includes the $2.5 billion emissions reduction fund and renewable energy target.