Potentially cancelling out hundreds of millions of dollars of public spending on emissions cuts under the conservative Liberal-National government’s Direct Action climate policy, nearly 60 Australian industrial sites have been given approval to increase greenhouse gas pollution.

The increases have been quietly approved under the “safeguard mechanism”, which was introduced as part of Direct Action to ensure cuts paid for using the main part of the policy, the Emission Reduction Fund (ERF), were not undone by emissions increasing in other parts of the economy.

The Guardian reports under the safeguard mechanism, government agency the Clean Energy Regulator sets an emissions limit for each large industrial site based on its highest level of emissions over the previous five years.

However, companies can apply to have the limit recalculated.

The regulator has signed contracts worth $2.25 billion under the emissions fund, mostly with businesses that plan to plant trees and repair degraded habitat over the next decade.

The idea is the vegetation will store carbon dioxide drawn from the atmosphere.

However, an analysis of data on the regulator’s website by consultants RepuTex Carbon found the regulator had simultaneously allowed 57 industrial sites to increase emissions above their previous highest level.

If all sites emitted to their newly approved level, it could add up to 22 million tonnes of carbon dioxide to the atmosphere each year, four per cent of Australia’s annual emissions.

Based on the average price paid by the government, $11.90 a tonne of carbon dioxide, it would effectively cancel out up to $261.8m of emissions cuts a year.

The Guardian reports this has prompted fresh accusations that Direct Action is doing little to curtail Australia’s emissions, which were already rising before a round of 44 industrial facilities had their emissions increases approved on January 25.

RepuTex executive director, Hugh Grossman, said it showed the safeguard mechanism was ineffective.

“It’s a safeguard in name only.

“There is no doubt emissions growth is outpacing the abatement from the emissions reduction fund, so what has been the point?” he said.

RepuTex found that by 2030, emissions from large industrial sites were projected to be 30 per cent higher than in 2005, and 16 per cent higher than when the safeguard mechanism was announced four years ago.

They are expected to grow to be the biggest source of Australia’s emissions, surpassing those from burning coal and gas for electricity.

Mr Grossman said the industrial sector now posed a larger problem than electricity emissions, which had started to decline, though not quickly enough.

“It’s black and white, if industrial emissions are not resolved, we won’t meet our Paris commitments,” he said.

Under the 2015 United Nations sponsored Paris Agreement, Australia pledged to cut emissions by between 26 per cent and 28 per cent below 2005 levels by 2030.

The growth in industrial emissions suggests deeper cuts would be needed in other parts of the economy for that commitment to be met.

However, the LNP government is not proposing deeper cuts in the electricity sector, currently the biggest emissions source.

Under the National Energy Guarantee (NEG), it proposes to cut pollution from generators by 26 per cent and is considering allowing electricity retailers to defer some cuts.

It is also considering making the safeguard mechanism less stringent.

An LNP government climate policy review released in December suggested emissions limits could be loosened so they “increase with production, supporting business growth”.

The environment and energy minister, Josh Frydenberg, said the safeguard mechanism was operating in accordance with legislation, rules and regulations.

The Guardian reports a spokeswoman for the Clean Energy Regulator said they included allowing reappraisal of how much a facility could emit if there was not enough historic data over the previous five years, or if the data did not accurately represent activity at the industrial site now.

She said the safeguard mechanism was meant to make sure cuts paid for using the ERF were not offset by “significant increases above business-as-usual levels”, but also to accommodate economic growth.

Mr Frydenberg said the mechanism was part of a suite of policies, including the successful ERF, the Renewable Energy Target (RET) and a national energy productivity plan, the details of which are yet to be released.

The minister said Australia was on track to comfortably beat its 2020 target of a five per cent cut below 2000 levels.

He did not mention the 2030 target.

Environment department data released in December showed national emissions have increased each year since 2014, when the previous Labor government’s carbon price scheme that put a charge on greenhouse pollution was repealed.

RepuTex projects Australia will also fall short of its 2020 target of a five per cent cut in absolute terms, with emissions expected to be at the same level as in 2000.

However, the country will meet its target under UN greenhouse accounting rules by using credits carried over from the previous target period, when Australia’s target was an eight per cent emissions increase between 1990 and 2012.