2023 REVIEW OF THE

NATIONAL
GREENHOUSE AND
ENERGY REPORTING
LEGISLATION

December 2023

Page | 0
The authority recognises the First Nations people
of this land and their ongoing connection to
culture and country. We acknowledge First
Nations people as the Traditional Owners,
Custodians and Lore Keepers of the world's
oldest living cultures, and pay our respects to
their Elders.

This report is printed on Ngunnawal Country.

Page | 1
Published by the Climate Change Authority www.climatechangeauthority.gov.au
Copyright © Commonwealth of Australia 2023
Unless otherwise stated and except for the authority’s logo, all photographs, graphics and trademarks,
this publication is licensed under a Creative Commons 4.0 International licence.
More information on this CC BY license is set out at the Creative Commons Website.
The Climate Change Authority asserts the right to be recognised as author of the original material in the
following manner:

or
©Commonwealth of Australia (Climate Change Authority) 2023.
ISBN: 978-0-6486349-9-7
Accessibility
The authority makes its documents and information available in accessible formats. If you have
problems accessing the document, please contact us: Contact us | Climate Change Authority or phone
1800 475 869.
IMPORTANT NOTICE – PLEASE READ
This document is produced to fulfil the Climate Change Authority’s statutory role and is otherwise made
available for general information only. It does not represent a statement of the policy of the
Commonwealth of Australia. This report does not constitute personal financial, legal or other
professional advice. Users should obtain any appropriate independent professional advice relevant to
their particular circumstances. The Commonwealth and all persons acting for it preparing this report
accept no liability for the accuracy of or inferences from the material contained in this publication, or
for any action or omission as a result of any person’s or group’s interpretations, deductions,
conclusions or actions in relying on this material. The Commonwealth is not liable for any loss caused,
howsoever arising, from the use of, or reliance on, the information provided through this report.

Page | i
Acknowledgements
The Climate Change Authority would like to thank the many individuals and organisations who
contributed time and expertise to this review, including those who provided formal submissions and
participated in consultation. The authority received 62 formal submissions related to the 2023 NGER
Review, hosted 3 workshops with over 100 participants in total, received 69 responses to a survey on
the review, as well as many more informal contributions. These contributions have improved the
quality of the review and provided evidence to help inform the authority’s recommendations.
The Department of Climate Change, Energy, the Environment and Water, the Clean Energy Regulator
and other government agencies also provided technical expertise to the authority in the preparation of
this review.
The views expressed in the review are the authority’s own and should not be taken as the views or
positions of any of the entities listed.

Page | ii
Table of Contents
Summary..................................................................................................................................................... 1

Recommendations ..................................................................................................................................... 8

1. Introduction ...................................................................................................................................... 11

2. Overview of the legislation and its operation ............................................................................... 17

3. The reporting scheme ..................................................................................................................... 29

4. Fugitive methane measurement, reporting and verification ....................................................... 65

5. The Safeguard Mechanism ............................................................................................................. 85

6. Administration and compliance ..................................................................................................... 93

References................................................................................................................................................ 99

Legislative References .......................................................................................................................... 113

Table of Figures ..................................................................................................................................... 114

Table of Tables ....................................................................................................................................... 115

Appendix A: Assessment of Costs and Benefits ............................................................................... 117

Appendix B: International Reporting Schemes .................................................................................. 123

Appendix C: Recommendations from the Authority’s 2018 Review and Government Response 125

Appendix D: Method Availability for Reporting Fugitive Methane Under the NGER Scheme ....... 133

Appendix E: Safeguard Mechanism and Administration and Compliance ..................................... 135

Page | iii
Acronyms
AASB Australian Accounting Standards Board
ABARES Australian Bureau of Agricultural and Resource Economics and Sciences
ACCU Australian carbon credit unit
AES Australian Energy Statistics
API application programming interface
AtJ Alcohol to Jet
BoM Bureau of Meteorology
CBAM carbon border adjustment mechanism
CCA Climate Change Authority
CER Clean Energy Regulator (the regulator)
CO2 carbon dioxide
CO2-e carbon dioxide equivalent
Department of Climate Change, Energy, the Environment and Water (the
DCCEEW
department)
EERS Emissions and Energy Reporting System
EITE emissions intensive, trade exposed
ERF Emissions Reduction Fund (now known as the ACCU Scheme)
ETF enhanced transparency framework
FLIGHT Facility Level Information on GreenHouse gases Tool
FT Fischer Tropsch
FY financial year
GO Guarantee of Origin
HEFA hydroprocessed esters and fatty acids
ICAO International Civil Aviation Organization
IEA International Energy Agency
ILUC indirect land use change
IMEO International Methane Emissions Observatory
IPCC Intergovernmental Panel on Climate Change
kt kilotonne (thousand tonnes)
LGC large-scale generation certificate
LNG liquefied natural gas
LULUCF Land Use, Land-Use Change and Forestry
MMP Metcoal Methane Partnership
MRV measurement, reporting and verification
Mt megatonne (million tonnes)
NDC Nationally Determined Contribution
NFF National Farmers Federation
NGER Act National Greenhouse and Energy Reporting Act 2007
NGER
National Greenhouse and Energy Reporting scheme
Scheme
OGMP 2.0 Oil and Gas Methane Partnership 2.0
RTC Reporting Transfer Certificate
SMC Safeguard Mechanism Credit
t tonne
UNEP United Nations Environment Program
UNFCCC United Nations Framework Convention on Climate Change
US EPA United States Environmental Protection Agency
US GHGRP United States Greenhouse Gas Reporting Program

Page | iv
Summary
The Climate Change Authority (the authority) is a statutory agency established to provide
independent, expert advice to the Australian Government on climate change policy. The authority is
required to review the operation of the National Greenhouse and Energy Reporting Act 2007 (NGER
Act) every five years. This is the authority’s second review of the NGER Act.

The NGER legislation establishes:

• the National Greenhouse and Energy Reporting scheme
• the Safeguard Mechanism
• a framework for administration and compliance for these schemes.

The NGER scheme is a national reporting framework for companies that meet certain thresholds to
report their greenhouse gas emissions, energy consumption and energy production for the purposes
of informing government policy and programs, informing the Australian public and helping meet
Australia’s international reporting obligations. In 2020-21, the total direct emissions from companies,
referred to as their scope 1 emissions, reported under the NGER scheme accounted for 68% of
Australia’s total net greenhouse gas emissions.

The Safeguard Mechanism is a framework for reducing the emissions of Australia’s largest industrial
facilities over time. It underwent major reforms earlier this year which introduced declining facility
baselines, limits on total emissions under the mechanism, and a system (Safeguard Mechanism
Credits) for trading over-achievement on baselines.

The authority framed this year’s review with the question ‘is the NGER legislation fit for purpose in the
Paris Plus context?’. The authority uses the term ‘Paris Plus’ to describe the various agreements,
targets, cross-border instruments and other initiatives and behaviours that implement or contribute
to the goals of the Paris Agreement. With markets and governments reorienting to net zero emissions,
it is timely to ask whether Australia’s domestic climate change policies are fit for purpose in this
evolving post-Kyoto Protocol era of increasing climate ambition.

While NGER is a long-standing and reputable scheme, the domestic and global contexts are changing.
These changes make it important to consider how the scheme may need to evolve — whether that be
to meet new expectations from the public, improve or enhance the interactions and complementarity
of the NGER scheme with new reporting initiatives, or ensure it remains best practice.

The authority’s 2023 review of the NGER legislation focused on the NGER scheme, with the
reformed Safeguard Mechanism having only recently commenced operation.

The authority’s 2023 review of the NGER legislation has focused on the following key themes of the
NGER scheme:

• NGER scheme coverage, including sectoral coverage and reporting thresholds.

• Transparency and confidentiality.

• Estimation methods, with a focus on fugitive methane measurement, reporting and

verification.
• Administration and compliance of the NGER scheme.

Page | 1
The authority notes that the government’s 2023 reforms to the Safeguard Mechanism have served to
better align Australia’s main industrial emissions reduction policy with the Paris Plus context.
However, as the reforms only took effect in July this year, data is not yet available on the performance
of the new arrangements. In this review, the authority briefly comments on the performance of the
Safeguard Mechanism prior to the recent reforms and provides some observations on the reformed
mechanism.

As part of the concurrent review of the Carbon Credits (Carbon Farming Initiative) Act 2011 (ACCU
Scheme Review), the authority has examined the operation of Australia’s carbon crediting scheme in
light of the changing international and domestic context, including the introduction of the Safeguard
Mechanism reforms. Interested readers are directed to the ACCU Scheme Review for the results of
this analysis. Further assessments of the performance of the Safeguard Mechanism will be an ongoing
feature of the authority’s work.

The NGER scheme is performing well but the time is right to make some changes to ensure it
remains fit for purpose.

The authority found that the NGER scheme continues to be integral to meeting Australia’s
international energy and emissions reporting obligations. The NGER scheme is also informing the
development, implementation and monitoring of government policies, programs and activities, as well
as the Australian community.

However, the authority observes that the emissions and energy data needs of both the government
and the public are growing. In considering these changing needs, the authority identified key areas for
consideration in this year's review including: transparency and confidentiality, NGER scheme coverage
(including reporting thresholds and sectoral coverage), methane measurement, reporting and
verification, and administration and compliance.

In response to increasing demand for emissions data, more facility level NGER data should
be published.

The authority heard from many stakeholders that data reported under the NGER scheme currently
lack the necessary transparency to meet increasing demand for more granular information. Enhancing
the accessibility and transparency of the data would provide many benefits, including better utility of
NGER data in policy analysis and impact tracking, improving community confidence in emissions
reporting, supporting more transparent benchmarking between facilities, and better informing
financial institutions’ lending and investment decisions.

The NGER scheme collects a rich set of emissions and energy data. However, currently the NGER
legislation allows the Clean Energy Regulator (the regulator) to publish only a subset of this data.
Under the NGER scheme, the regulator publishes aggregate emissions and energy data for
corporations, only where they meet a certain emissions threshold. Facility-level data is not available
unless the facility is an electricity generator or meets the coverage threshold for the Safeguard
Mechanism.

The authority is of the view that increasing the transparency of the data collected under the NGER
scheme is essential to ensure it remains aligned with the expectations of the public and the standards
set internationally. In particular, the authority recommends that facility-level data (including emissions
by greenhouse gas) be published for all but the very lowest emitting facilities.

Page | 2
Under section 25 of the NGER legislation, corporations can request that data be withheld from
publication, with some exceptions, on the basis that the information has commercial value. The
authority weighed the current operation of this provision against consistent calls for increased
transparency of data collected under the NGER scheme.

The authority is of the view that it is appropriate for companies to continue to be able to request that
certain data are withheld from publication in specific and limited circumstances, i.e. when publication
would unacceptably reveal the trade secrets or other commercially valuable information, as is
provided for under the existing tests. However, consideration should be given to clarifying the specific
circumstances in which data can be withheld from publication under section 25, and to streamlining
the application and decision-making process.

Reporting under the NGER scheme should be extended to agriculture and land emissions in a
separate and staged manner.

Emissions and removals from Agriculture and Land Use, Land-Use Change and Forestry, as defined by
the United Nations Framework Convention on Climate Change (UNFCCC), are currently excluded from
the NGER scheme. The explanatory memorandum for the National Greenhouse and Energy Reporting
Bill 2007 explains that the NGER scheme excludes agriculture because there were no methodologies
available for the agriculture sector at the time that would provide meaningful data at the company
level. In 2023, workable methods for calculating emissions at the farm-level are emerging and these
could form a starting point for NGER emissions calculations. Developing a methodology to account for
emissions at the farm level is likely to be challenging and could introduce a reporting burden.
However, there are also benefits to be realised from improved information on emissions from
agricultural practices.

The authority estimates that including emissions from agricultural sources under the NGER scheme
could cover approximately 5-10% of emissions from the agriculture sector. Only larger agri-businesses
within the agriculture sector are likely to run cattle herds large enough that their emissions alone
could exceed the facility reporting threshold.

The authority is of the view that the government should work with stakeholders to include agriculture
under the NGER scheme in a manner that meets private and public sector requirements for robust,
comparable data and minimises unnecessary reporting costs.

The authority recognises issues remain in the development of methods for reporting emissions from
the land sector, with further work needed to develop an approach that is robust and useable for the
purposes of the NGER scheme. The authority is of the view that reporting requirements for the land
sector should be introduced, but over a longer timeframe than that for the agricultural sector.

The federal, state and territory governments should agree on a framework that ensures
consistent reporting of emissions from government operations.
Given many governments are moving towards more transparent reporting requirements, imposing
additional NGER reporting requirements would be premature at this stage. It is important, however,
that government emissions reporting is robust, transparent and consistent across governments. A
standard agreed by governments could provide assurance that reporting of government emissions will
be adequate and comparable.

Page | 3
Publicly owned landfills should be required to report under the NGER scheme.
Currently, approximately 65% of total waste disposal in Australia is covered by NGER data — emissions
that are not captured come from state, territory and local government owned landfills and smaller
landfills that do not trigger the NGER threshold. Government entities are not required to report
emissions, except in cases where an incorporated government agency is also a constitutional
corporation. The authority is of the view that the NGER scheme should be expanded to cover publicly
owned landfills where possible as these are a significant source of emissions from the waste sector.

Expanding reporting to publicly owned landfills would provide more information on emissions from
waste disposal and increase equity in reporting between private and public landfills. The authority
notes legal advice would need to be sought to confirm validity of any proposed approach.
A study by the government on the use of NGER emissions data can facilitate estimation of
scope 3 emissions at the entity level in Australia.
Scope 3 emissions are indirect emissions other than from energy use generated from sources
upstream or downstream in the reporting facility’s value chain. Determining scope 3 emissions can
help meet the demands of consumers and shareholders, help manage risks, and identify opportunities
to reduce emissions in supply chains.

The benefits of scope 3 emissions reporting to accountability and transparency of emissions beyond a
facility were highlighted through consultation for this review. The Australian government’s proposal
on climate-related financial disclosures will include mandatory reporting of scope 3 emissions. Data
reported through the NGER scheme are a potentially valuable source of information for supporting
estimates of scope 3 at the entity level.

Further analysis could be undertaken over the coming years as scope 3 emissions reporting is
introduced through climate-related financial disclosures to formalise the data used to facilitate these
disclosures.
The proportion of each sector’s emissions reported under the NGER scheme must, at a
minimum, be maintained at current levels.
The authority heard from several stakeholders that reducing reporting thresholds to capture more
data in the NGER scheme would provide a more comprehensive picture of Australia’s emissions.
Stakeholders also said that reducing thresholds to capture smaller businesses may help increase their
understanding of their emissions and facilitate decarbonisation activities. The authority noted these
benefits while also acknowledging that lowering the threshold would impose new regulatory burden
on companies. On balance, the authority considers that the current proportion of emissions reported
under the scheme for each sector (that currently reports) was sufficient to meet the objectives of the
scheme, and that the benefits of reducing the thresholds to capture more companies did not
outweigh the costs.

The authority is of the view that, at a minimum, the current proportion of each sector’s emissions
reported under the scheme should be maintained. The authority makes this comment in the context
of Australia’s transition to net zero. As companies decarbonise, the NGER scheme will need to
maintain sufficient reporting of emissions across each of the sectors to ensure it continues to meet
the objectives set out in the legislation. The percentage of each sector’s emissions reported under the
NGER scheme should be monitored, and amending the thresholds if needed, will ensure sufficient
coverage of each reporting sector is either maintained, or increased if necessary to ensure the
objectives of the scheme continue to be met.

Page | 4
A certification scheme or framework is needed before market-based reporting is made
available for renewable liquid and gaseous fuels.

Emissions estimation methods in the Measurement Determination do not currently allow NGER
reporters that source their fuel from common infrastructure to reflect the emissions benefits of using
renewable fuels. This is because the emissions calculation method for fuel sourced from common
infrastructure uses an emissions factor based on the location of the infrastructure.

Market-based reporting would allow NGER reporters to make claims on the lower emissions intensity
attributable to renewable liquid fuel and gaseous purchases. Governance mechanisms are required to
avoid double counting and other adverse impacts associated with renewable fuels. The authority
recommends the government develop a framework to approve certifications that can guarantee the
renewable status of renewable liquid and gaseous fuels. Following the establishment of renewable
liquid and gaseous fuel certification schemes, the authority recommends introducing market-based
reporting for these fuels in the NGER scheme.

Several improvements can be made to fugitive methane emissions measurement and

reporting under the NGER scheme.

Research teams around the world are using remote sensing satellites to observe methane plumes near
the earth’s surface. Over the past five years, developments in satellite technologies and inverse
modelling techniques have resulted in a new source of data to estimate fugitive methane emissions
from individual facilities. Some of these satellite observations have raised questions about the
accuracy of estimated fugitive methane emissions from coal mining and oil and gas operations in
Australia reported under the NGER scheme.

In this review, the authority considered these satellite observations, particularly those used to make
comparisons with estimates from the NGER scheme. In considering improvements for the NGER
scheme, the authority also took into consideration two emerging international frameworks for
methane measurement, reporting and verification being developed by the United Nations
Environment Program and industry - the Oil and Gas Methane Partnership (OGMP) 2.0 and the
Metcoal Methane Partnership (MMP).

In examining the available evidence, the authority observed general agreement between satellite-
based observations and reported fugitive methane emissions from coal mining where the reported
emissions are estimated using directly measured, higher order methods 1 However, discrepancies
appear to be more prevalent between satellite observations and reported emissions for coal mining
where simpler, lower order methods are available.

The authority is of the view that the accuracy of estimated fugitive methane emissions reported under
the NGER scheme may be impacted due to the use of lower order methods. Simple emissions factors
do not adequately capture temporal or spatial specificity or variability at the facility level.

The authority has identified a number of improvements to the NGER Measurement Determination
that would enhance the accuracy of fugitive methane emissions reporting and bring the NGER scheme

1
Up to four estimation methods are available for estimating emissions under the NGER scheme. These range
from simple, lower order methods that generally use emissions factors, to more sophisticated, higher order
methods that typically require direct measurement. Further details on these methods can be found in Section
2.2.2 and Section 4.2.
Page | 5
into better alignment with international best practice in methane measurement, reporting and
verification. These include:

• A series of recommendations to move measurement and reporting of fugitive methane

emissions in Australia to higher order methods. In some instances the authority recommends
making this shift mandatory (e.g. by phasing out Method 1) and in other instances, it
recommends enabling the shift (e.g. through increasing the availability of higher order
methods for different activities in coal mining and oil and gas operations).

• A recommendation for the government to develop a policy framework for implementing

independent verification of facility-level fugitive methane emissions estimates using top-down
measurements conducted by reporters, and reported through the NGER scheme.

• A recommendation that the government supports the development of Australia’s sovereign

capability in methane emissions measurement and quantification.

The authority will continue to monitor and review the operation of the reformed Safeguard
Mechanism.

The authority is supportive of the reforms made to the Safeguard Mechanism and notes close
alignment between the reforms and previous recommendations by the authority.

The authority has previously recommended baselines decline linearly in line with Australia’s emissions
reduction targets, and that facilities should be able to trade over-and under-achievement of baselines
once baselines have commenced declining and are binding.

One area of divergence between the reformed Safeguard Mechanism and the authority’s previous
recommendations is around transition planning. The authority previously recommended requiring all
covered facilities to prepare and publish strategies setting out how they will comply with declining
baselines. The reformed Safeguard Mechanism only requires facilities that apply for multi-year
monitoring periods to prepare a plan for complying with their Safeguard obligations. The authority
notes, however, that it is likely that large companies will need to publish transition plans through the
climate-related disclosure framework which is currently being consulted on by the government.
A key feature of the authority’s future work examining industry sector decarbonisation will be
analysing the performance of the Safeguard Mechanism. The authority will also provide annual advice
to the Minister for Climate Change and Energy on whether Safeguard emissions are declining
consistent with the objectives set out in the NGER legislation.

The authority is also expected to have a role in the government’s 2026-27 review of the Safeguard
Mechanism. The authority is expected to advise on the extent to which on-site abatement is being
driven by the Safeguard reforms, and whether any additional incentives are required (such as a
discount on ACCUs when used for more than a certain percentage of a baseline or any circumstances
where limits on the use of ACCUs may be appropriate).

Administration of the NGER scheme is working well, but there are opportunities to streamline some
activities.

The authority heard from a number of stakeholders that both the regulator and the Department of
Climate Change, Energy, the Environment and Water are performing well in their respective roles.
The authority found a few opportunities to streamline administration activities, including:

Page | 6
 • giving the regulator the discretion to deregister corporations that are in liquidation

• amending a gap in the legislation that currently means reporters that register late do not have
to provide reports for the years between the year they first trigger a reporting threshold and
the year they register

• removing references to a corporation’s ‘trading name’ and replacing with ‘registered business
name’ to align with changes to Australian Securities and Investment Commission registers.

Compliance with the NGER scheme is high, and the regulator is taking appropriate
enforcement action in instances of non-compliance.

The authority is of the view that the regulator is applying the audit framework effectively and actively
working to improve it, e.g. through the increasing sophistication of its assessment process and
through its responsive approach to setting compliance and enforcement priorities. Analysis conducted
by the authority indicated that the accuracy of NGER reports was generally high, as indicated by low
resubmission rates and the high proportion of audits with no adverse findings. However, some
concerns were raised around the availability of appropriately skilled auditors, which may be
heightened in future by the use of the auditor register for climate-related financial disclosure audits.
The authority notes that the pool of appropriately skilled auditors should continue to be monitored to
ensure the audit framework remains effective.

In instances where significant non-compliance was identified, the authority found that the regulator
was taking appropriate enforcement action. Since the 2018 review, there have been two enforceable
undertakings. Both undertakings relate to reporters making errors in their NGER reports, resulting in
over- and under- reporting of emissions. Both undertakings are ongoing, requiring various actions
from the reporters to improve the quality of their reports.

Page | 7
Recommendations
Coverage
1. The proportion of each sector’s emissions reported under the NGER scheme must, at a
minimum, be maintained at current levels.
2. a. The NGER scheme be expanded to include methods for calculating emissions from the
UNFCCC-defined agriculture and land sectors. The government should work with interested
parties in the agriculture sector on the most appropriate way to include these emissions
sources under the same thresholds as for other sectors and develop robust estimation
methods for facility-level emissions reporting in these sectors.
b. Introduce mandatory reporting requirements for agricultural sector emissions by the 2026-
27 financial year and for land sector emissions by the 2027-28 financial year.
3. Seek agreement with state and territory governments on a framework that will allow for
consistent reporting of emissions by government entities. In the absence of an agreed
framework, the government should explore the potential to extend coverage of the NGER
scheme to government entities.
4. Extend NGER coverage to publicly owned landfills where legally possible.
5. Undertake a study to investigate the use of the emissions data reported through the NGER
scheme to facilitate estimation of scope 3 emissions at the entity level in Australia.
Market-based reporting
6. Develop a framework to approve certifications that can guarantee the renewable status of
renewable liquid and gaseous fuels. This framework should be informed by a review of
existing international certification schemes. The certifications approved under the framework
need to guard against adverse impacts.
7. Introduce optional market-based reporting of renewable liquid and gaseous fuels once a
framework for approving certifications for renewable fuels is operational.
8. Engage with the IPCC to create guidance on the definition and emissions factors of renewable
synthetic fuels. Subsequently amend the definition for renewable fuels in the NGER
Regulations to include renewable synthetic fuels once there is clear guidance from the IPCC.
Transparency
9. As a first step in increasing the transparency of NGER data, the NGER scheme requires that the
regulator publish, starting with data for the 2023-24 financial year, the following data at the
facility level for facilities which produce annual emissions greater than or equal to
5,000 t CO2-e:
a. Scope 1 emissions by greenhouse gas as a consistent time-series.
b. Scope 2 emissions as a consistent time-series.
c. The method used in each financial year to estimate scope 1 and scope 2 emissions.
10. Resource the regulator to publish relevant NGER datasets through an application
programming interface (API) so that users can download and programmatically query the data
using their own software. This should be implemented for the publication of the 2024-25
NGER data.

Page | 8
 11. Resource the regulator to improve the accessibility and usefulness of the published data by
exploring opportunities to present data in additional formats on its website. This should be
implemented for the publication of the 2024-25 NGER data.
12. Resource the regulator to collect the necessary information from reporters such that it can
link facilities reported under the NGER scheme across time.
Confidentiality
13. Monitor the future utilisation of section 25 of the NGER Act and whether it is impacting upon
the overall effectiveness of the publication regime in section 24 of the Act.
14. Consider measures to provide additional guidance and streamline the process for making and
deciding non-publication applications under section 25 of the NGER Act, including through
legislative amendment if needed.
Increasing the accuracy of reported fugitive methane emissions in the NGER scheme
15. Phase out Method 1 estimation methodologies for fugitive methane emissions, including as a
matter of urgency for the extraction of coal in open cut coal mining.
16. Resource the department to establish higher order estimation methods for all fugitive
methane emission sources included in the Measurement Determination.
17. As a matter of urgency, review Method 2 for extraction of coal in open cut coal mining with
respect to sampling requirements and standards.
18. Review the requirement for integrated gas facilities to use the same method across activities
to allow for flexibility to use higher order methods for larger emission sources, while ensuring
integrity of estimated emissions.
19. Commission a panel of Australian and international experts to establish a best practice
process to document the standards and requirements for making transparent, repeatable and
credible top-down measurements of fugitive methane emissions from Australian facilities.
This panel should evaluate whether any further research studies are needed and should be
resourced to conduct required studies. The panel of experts should be commissioned in the
first quarter of 2024, and the guidelines for making top-down verification measurements
published as soon as practicable.
20. Develop a top-down verification policy framework for the verification of bottom-up estimates
of fugitive methane emissions reported under the NGER scheme. This should be phased in on
a trial basis as soon as practicable, with mandatory verification using top-down measurements
commencing the year after. If any discrepancies are found between bottom-up estimates
obtained using an NGER method and the top-down verification measurement, the bottom-up
measurement approach should be refined by the reporting entity to reconcile the emission
estimates.
21. Determine the appropriate requirements to be met for future use of satellite technology in
detection of fugitive methane emissions, and for verification of estimated fugitive methane
emissions.
22. Prioritise and support the development of Australia’s sovereign capability in methane
emissions measurement and quantification, by building on existing expertise and leveraging
international partnerships where appropriate.

Page | 9
Administration and compliance
23. Authorise the regulator to deregister corporations in liquidation from the NGER scheme on
the regulator’s own initiative to reduce the administrative burden for the regulator.
24. Require corporations that meet reporting thresholds to provide reports for all years following
their trigger year, regardless of when they register, to ensure completeness of the NGER
datasets.
25. Update the NGER scheme to replace references to a corporation’s ‘trading name’ with
‘registered business name’.

Page | 10
1. Introduction
The National Greenhouse and Energy Reporting Act 2007 (NGER Act) establishes the National
Greenhouse and Energy Reporting (NGER) scheme, the Safeguard Mechanism, and a framework for
administration and compliance. Figure 1.1 presents a description of each of these components.
The Act and its instruments are implemented by the Clean Energy Regulator (the regulator). The
regulator also ensures compliance with the legislation. The Department of Climate Change, Energy,
the Environment and Water (the department) has formal policy oversight of the NGER Act.

The NGER Act has two objectives, the first relates to the NGER scheme and the second relates to the
Safeguard Mechanism.

National Greenhouse and Energy Safeguard Mechanism

Reporting Scheme
A national reporting framework for companies that A framework that reduces the emissions of Australia’s
meet certain thresholds to report their greenhouse gas largest industrial facilities (i.e. Safeguard emissions)
emissions, energy consumption and energy production over time to ensure:
for the purposes of: • total net Safeguard emissions between 1 July 2020
and 30 June 2030 do not exceed 1,233 Mt CO₂-e
• informing government policy
• net Safeguard emissions are no more than 100 Mt
• informing the Australian public
CO₂-e for the FY2029-30, and zero after 30 June
• helping meet Australia's international reporting
2049
obligations
• the 5-year rolling average Safeguard emissions
• assisting government programs and activities
reduces over time from FY2024-25.
• avoiding duplication of similar reporting
requirements in the states and territories. The mechanism also ensures there are material
incentives for on-site emissions reductions, and that
the competitiveness of trade-exposed industries is
supported.


Administration, compliance and the audit framework
The Department of Climate Change, Energy, the Environment and Water has policy oversight of the National
Greenhouse and Energy Reporting Act 2007. The Clean Energy Regulator implements the Act and its instruments
and ensures compliance with the legislation.

The legislation sets out an audit framework to underpin the effectiveness and integrity of the schemes and their
data. Under the legislation, audits are required for the reporting scheme and Safeguard Mechanism. The
framework also sets out requirements for auditors.

Figure 1.1 The three components of the NGER Act. 2

2
FY is financial year.
Page | 11
The first objective is to introduce a single national reporting framework for the reporting and
dissemination of information related to greenhouse gas emissions, greenhouse gas projects, energy
consumption and energy production of corporations to:
• inform government policy formulation and the Australian public

• meet Australia’s international reporting obligations

• assist Commonwealth, state and territory government programs and activities
• avoid the duplication of similar reporting requirements in the states and territories.
The second objective is to contribute to the achievement of Australia’s greenhouse gas emissions
reduction targets by ensuring that each of the following outcomes (known as the Safeguard
outcomes) are achieved:

• Net covered emissions of greenhouse gases from the operation of a safeguard facility do not
exceed the baseline applicable to the facility
• Total net safeguard emissions for all of the financial years between 1 July 2020 and
30 June 2030 do not exceed a total of 1,233 Mt CO2-e
• Net safeguard emissions decline to:
a. no more than 100 Mt CO2-e for the financial year beginning on 1 July 2029
b. zero for any financial year to begin after 30 June 2049

• The 5-year rolling average safeguard emissions for each financial year that begins after
30 June 2024 are lower than the past five-year rolling average safeguard emissions for that
financial year

• The responsible emitter for each safeguard facility has a material incentive to invest in
reducing covered emissions from the operation of the facility
• The competitiveness of trade-exposed industries is appropriately supported as Australia and
its regions seize the opportunities of the move to a global net zero economy.
1.1. Reviews by the Climate Change Authority
The NGER Act states that the Climate Change Authority (the authority) must conduct a review of the
operation of the Act and accompanying legislative instruments every five years. This is the authority’s
second review of the NGER legislation. The first review was conducted in 2018 (CCA, 2018).
The NGER Act states that the authority must make provision for public consultation when conducting
the review. The consultation carried out by the authority for this review is described further in Section
1.4. The Act also states that if the review recommends action by government, the authority must
assess the costs and benefits of that action.
1.2. The 2018 review

At the time of the authority’s first NGER review in 2018, the NGER scheme had been in place for over a
decade, while the Safeguard Mechanism had been in operation for less than three years (CCA, 2018).

In 2018, the authority found the NGER legislation was operating well, meeting its objectives and
generally fit for purpose. The NGER scheme had broad support from industry, governments and
others, and was widely considered to be a best-practice approach to measuring and reporting
emissions and energy. The high-quality data collected by the scheme was being used extensively by
governments and others to develop energy and climate change policies. It was also a critical input to

Page | 12
meeting Australia’s international energy and emissions reporting obligations (CCA, 2018).
The authority found that all facilities covered by the Safeguard Mechanism kept their net emissions at
or below their baselines in its first year of operation (2016-17). In 2018, the authority observed
facilities with Safeguard obligations were generally comfortable with its operation and the options for
meeting their baselines. However, at the time, many called for clarity around the future operation of
the policy (CCA, 2018).
Although the authority found the legislation was meeting its objectives, it also identified opportunities
for improvements to reduce costs and enhance administration. The authority made 20
recommendations across the three components of the legislation. The government responded in
2019, accepting (or accepting-in-principle) 13 of the recommendations and noting seven (Australian
Government, 2019). Appendix C contains the full list of recommendations and government responses
for each.
Some of the recommendations have been progressed over the past five years, while others remain
relevant to this review. Recommendations that the authority has revisited relate to:

• Expanding the range of emissions and energy data that is reported and published. In
particular, considering whether the NGER scheme should be expanded to allow for reporting
of emissions from agricultural sources, and whether government entities should report under
the scheme. In 2019, the government noted these recommendations.

• Enhancing the usefulness of the data for governments and the public. In particular, funding
the regulator to enhance the NGER dataset to allow for time series analysis. In 2019, the
government noted this recommendation.
1.3. Framing the 2023 review

The circumstances in which the authority is conducting this review have changed considerably since
the 2018 review. The global transition to net zero has gathered considerable momentum — as at 25
September 2023, 97 Parties covering approximately 81% of global greenhouse gas emissions had
adopted net zero pledges either in law (27 Parties), in a policy document such as an NDC or a long-
term strategy (54 Parties), or in an announcement by a high-level government official (16 Parties)
(UNEP, 2023). Significant policy changes are emerging to support these targets such as domestic
carbon prices and the European Union’s first-in-kind Carbon Border Adjustment Mechanism — both of
which aim to price greenhouse gas emissions into economic systems (World Bank, 2023).
At the time of the authority’s last review, the Paris Agreement had been agreed but reporting was yet
to commence for all parties. The enhanced transparency framework (ETF), referred to as the
modalities, procedures and guidelines (MPGs), was agreed by countries in Katowice in December 2018
and elaborated in Glasgow in November 2021. 3 It provides guidance on comprehensive reporting for
all countries under the Paris Agreement to manage issues such as double counting and environmental
integrity (UNFCCC, 2018)

3
FCCC/PA/CMA/2018/3/Add.2, Decision 18/CMA.1.
Page | 13
Australia participates under the Paris Agreement reporting framework and relies on the NGER scheme
to provide much of the data necessary for completing
the annual national inventory reporting and national
Paris Plus
inventory component of the biennial transparency
report (DCCEEW, 2023a). The various agreements, targets and cross-border
instruments with the purpose of contributing to
The effect of the Paris Agreement reaches beyond just
the goals of the Paris Agreement, such as:
national reporting and compliance — the last five years
have seen a substantial impact on the direction of • voluntary carbon markets
private finance flowing towards sustainable • carbon border adjustment mechanisms
investments. (CBAMs)
Given the utmost importance of effective action to
• subnational and corporate targets
reduce emissions, the growing demands of investors
and the importance of ensuring consumers are well • climate-related financial disclosure
informed, there are very likely to be significant benefits • taxonomies and certification schemes
from enhancing the available information on the
• international agreements to reduce
sources of emissions in Australia. However, measures
to do so should seek to minimise the costs associated aviation and maritime emissions
with adding to regulatory reporting burdens. (CCA, 2021a)
The NGER legislation has a significant role to play in supporting a credible system for standardising and
enhancing emissions reporting by corporates and the publication of the data, leveraging its
established and robust framework.
Against this backdrop, the authority has framed the 2023 review using the following question: Is the
NGER legislation fit for purpose in the Paris Plus context? In other words, is the legislation aligned
with the various agreements, targets, cross-border instruments and other initiatives that implement
or contribute to the goals of the Paris Agreement.
1.4. Approach to the 2023 review

In this review, the authority assessed the performance of the individual elements of the legislation
against the legislated objectives and in the context of the ‘fit for Paris Plus’ framing. A greater
emphasis was placed on the NGER scheme, given the Safeguard Mechanism has just been through a
major reform process. As the reformed Safeguard Mechanism only came into effect on 1 July 2023,
there were no data available for the authority to assess its performance in this review. As part of the
concurrent review of the Carbon Credits (Carbon Farming Initiative) Act 2011 (ACCU Scheme review),
however, the authority has examined the potential impact of the reformed Safeguard Mechanism on
domestic carbon markets. Interested readers are directed to the ACCU scheme review for the results
of this analysis. Analysis of the Safeguard Mechanism will also form an ongoing part of the authority’s
work on industry sector decarbonisation, and in particular through its annual advice to the Minister
for Climate Change and Energy.
In July of this year, the Minister for Climate Change and Energy wrote to the authority to suggest it
consider whether updates to methane emissions measurement, reporting and verification rules are
required (Minister for Climate Change and Energy, pers. comm., 2023). The NGER legislation houses
the methods that companies use to calculate their methane emissions. The Minister noted the recent
reforms to the Safeguard Mechanism and the importance of the NGER scheme to its operation, and
more generally for tracking Australia’s progress in meeting its emissions reduction targets. The
Minister also noted work by other organisations seeking to improve understanding of methane
emissions from fossil fuel production. The authority agreed that it is timely to perform a detailed
analysis of methane measurement, reporting and verification as part of this review.

Page | 14
Other key areas of focus for this review include:
• coverage of the NGER scheme
• transparency and confidentiality of NGER data
• administration of, and compliance with, the NGER scheme.
The authority’s general approach to the review involved desktop research and analysis, supported by
extensive consultation. Further details on this consultation can be found below.
In conducting this review and formulating recommendations, the authority had regard to the
principles set out in the Climate Change Authority Act 2011, which says that any measures to respond
to climate change should:
i. be economically efficient
ii. be environmentally effective
iii. be equitable
iv. be in the public interest
v. take account of the impact on households, business, workers, and communities
vi. support the development of an effective global response to climate change
vii. be consistent with Australia’s foreign policy and trade objectives
viii. take account of the matters set out in Article 2 of the Paris Agreement
ix. boost economic, employment and social benefits, including for rural and regional Australia.
The authority decided that no additional principles, beyond those listed in the Act, were required to
guide this review.
1.4.1 Public consultation
In May 2023, the authority released a consultation paper entitled: Setting, Tracking and Achieving
Australia’s Emissions Reduction Targets. This paper sought feedback on the four projects the authority
has progressed this year:
• advice on emissions reduction targets for Australia’s next Nationally Determined Contribution
(NDC) under the Paris Agreement
• advice for the Minister for Climate Change and Energy’s Annual Climate Change Statement,
i.e. the authority’s 2023 Annual Progress Report

• review of the Carbon Credits (Carbon Farming Initiative) Act 2011 (ACCU Scheme review)
• review of the National Greenhouse and Energy Reporting Act 2007 (NGER review).
For the NGER review, the consultation paper sought feedback on the strengths and weaknesses of the
NGER scheme, how the NGER scheme could be improved in the context of the Paris Agreement era,
and methane measurement, reporting and verification.
The authority received 323 submissions, with 62 submissions directly responding on the NGER
legislation.

Page | 15
In July and August 2023, the authority conducted three workshops on fugitive methane measurement,
reporting and verification—one with industry, one with methane measurement scientists, and one
with non-government organisations. In total, over 100 participants attended these workshops. These
workshops explored the measurement and reporting of fugitive emissions in the NGER scheme, and
possible options for improvements.
In August 2023, the authority conducted a final round of public consultation through the release of a
survey, which sought feedback on the key themes of the review. The survey received 69 responses
from a range of interested parties.
Throughout the year, the authority also met with 100 individuals from 60 organisations to discuss the
NGER review. The authority heard from a wide range of interested parties including:
• companies with reporting obligations under the NGER scheme and the Safeguard Mechanism

• government agencies that administer the legislation or use the data

• academics and technical experts

• thinktanks and non-government organisations.

Page | 16
2. Overview of the legislation and its operation
2.1. National Greenhouse and Energy Reporting legislation
The NGER Act establishes the legislative framework for the National Greenhouse and Energy
Reporting (NGER) scheme, the Safeguard Mechanism and the associated administration, compliance
and audit framework.

National Greenhouse and Energy Reporting Act 2007

National National National

National
National Greenhouse
Greenhouse Greenhouse Greenhouse
Greenhouse and Energy
and Energy and Energy and Energy
and Energy Reporting
Reporting Reporting Reporting
Reporting (Auditor
(Measurement) (Audit) (Safeguard
Regulations Registration)
Determination Determination Mechanism)
2008 Instrument
2008 2009 Rule 2015
2019

Measuring and reporting instructions Safeguard

Auditing requirements and qualifications

Figure 2.1 The National Greenhouse and Energy Reporting Act and the supporting legislation.

Under the NGER Act there are five legislative instruments (shown in blue in Figure 2.1) which detail
the requirements of these three components (shown in green in Figure 2.1). These are:
• The National Greenhouse and Energy Reporting Regulations 2008 specifies details to support
the operation of the NGER Act, including in relation to registration, reporting, disclosure and
general administration.

• The National Greenhouse and Energy Reporting (Measurement) Determination 2008

(Measurement Determination) sets out methods, standards and criteria to be applied when
estimating greenhouse gas emissions, energy production and energy consumption.
• The National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 sets out
detail to support the operation of the Safeguard Mechanism, including in relation to coverage,
baselines, crediting, compliance, registration, reporting and other general administrative
procedures.

• The National Greenhouse and Energy Reporting (Audit) Determination 2009 sets out
requirements for preparing for, conducting and reporting on greenhouse and energy audits.
• The National Greenhouse and Energy Reporting (Auditor Registration) Instrument
2019 specifies the qualifications that an auditor must have to be registered under the NGER
Act.

Page | 17
2.2. The reporting scheme
The NGER scheme is the national reporting framework for certain companies to report their
greenhouse gas emissions, energy consumption and energy production to the Australian Government.
The NGER Act and supporting instruments detail the requirements of the NGER scheme, including
which companies have an obligation to report under the scheme, reporting requirements, and the
annual reporting and publication cycle.
2.2.1 Companies required to report under the NGER scheme
Constitutional corporations that meet certain thresholds must report emissions and energy data to the
Clean Energy Regulator (the regulator). There are different emissions and energy thresholds for
corporate groups and facilities under section 13 of the NGER Act. Reporting obligations are triggered if
any of the thresholds are met.

The corporate group thresholds are:

• 50 kilotonnes (kt) CO2-e of combined scope 1 and scope 2 emissions,
• production of 200 terajoules (TJ) of energy, or
• consumption of 200 TJ of energy.

The facility thresholds are:

• 25 kt CO2-e of combined scope 1 and scope 2 emissions,

• production of 100 TJ of energy, or

• consumption of 100 TJ of energy.
If a corporate group threshold is met, data on all facilities in the group must be reported regardless of
whether individual facilities have met the facility threshold. However, if a facility threshold is met but a
corporate group threshold is not, only data for the facility that meets the facility threshold must be
reported (Section 13, NGER Act; Part 3, NGER Regulations).

A facility is defined as an activity (or series of activities) that generates greenhouse gas emissions or
produces or consumes energy (CER, 2023a). The NGER Regulations provide additional detail to guide
application of the definition, such as in relation to grouping of activities and the attribution of activities
to particular industries. Examples of facilities which report under the scheme are electricity power
stations, mine sites, landfills, construction sites, manufacturing plants, retail outlets, air, rail and road
transport operations, and gas and water supply facilities. The definition of a facility under the NGER
legislation is intentionally broad and is designed to provide corporations with a degree of flexibility in
applying the definition to their own specific circumstances (CER, 2022a). For example, a facility could be
defined as a factory as well as the transportation of goods that are outside the factory’s boundaries but
still associated with the factory’s activities (CER, 2023a).
Reporting obligations under the NGER Act primarily apply to the controlling corporations (usually at the
top of the corporate hierarchy in Australia). The controlling corporation’s group (‘corporate group’) may
consist of a single controlling corporation, or it may have subsidiaries that are recognised as group
members under the NGER scheme (CER, 2023a). The controlling corporation must report on all facilities
within its corporate group over which it or its group members have operational control. Operational
control is defined as having the greatest authority to introduce and implement any operating, health
and safety, or environmental policies for the facility (Section 11, NGER Act).

Page | 18
Registration and de-registration of companies
All controlling corporations that meet any of the thresholds described above must register with the
regulator by 31 August following the financial year in which they first meet the threshold. A controlling
corporation may apply to be deregistered provided it is not likely to meet any of the thresholds for the
next three years and it can demonstrate that it has complied with its reporting obligations under the
NGER Act (CER, 2022b).
There are two situations in which reporting obligations for a facility may not apply to the controlling
corporation and are instead met through a different emissions and energy report:

• If a group member of a corporate group agrees with its controlling corporation to take on
reporting obligations for one or more facilities, the group member completes a report
containing information about the agreed facility or facilities (Section 22X, NGER Act)

• If a corporation or group member wishes to take on reporting obligations for facilities it has
financial control for, the corporation will need to obtain a Reporting Transfer Certificate (RTC)
for each individual facility. This transfers NGER reporting obligations from a controlling
corporation with operational control over a facility to the corporation that has financial control
over the facility (Section 22G, NGER Act).

The regulator is of the view that there is good awareness of reporting obligations across industry, with
most companies self-identifying when a relevant reporting threshold is met (CER pers. comm., 2023).
The authority observed that the regulator takes a proactive approach to preventing non-compliance
through education and monitoring activities to provide advice and support to companies. Appendix E
outlines the regulator’s compliance and enforcement framework and details the various education and
monitoring activities undertaken by the regulator.
2.2.2 Reporting requirements under the NGER scheme

The NGER Act requires all registered corporations to report scope 1 and scope 2 greenhouse gas
emissions, energy production and energy consumption data relating to the operation of facilities for
each financial year.
The Measurement Determination sets out methods, standards and criteria to be applied when
calculating this information. The Measurement Determination is updated annually to reflect
improvements in emission estimation methods, updates to emission factors and responses to
consultation feedback (DCCEEW, 2022a). Only emissions and energy production and consumption data
from specific activities and sources for which there are applicable methods are required to be reported.

The integrity of the data reported under the scheme is underpinned by the methods in the
Measurement Determination. These are aligned with the international emissions reporting
requirements established under the Paris Agreement, including the application of certain
Intergovernmental Panel on Climate Change (IPCC) guidelines for national greenhouse gas inventories
mentioned in relevant decisions of parties to the agreement, 4 and those used to report energy
production and consumption to the International Energy Agency (IEA, 2023a).

4
Decisions 18/CMA.1 (FCCC/PA/CMA/2018/3/Add.2) and 5/CMA.3 (FCCC/PA/CMA/2021/10/Add.2).
Page | 19
 Scope 1

Emissions released as a direct result of an activity. Scope 1 emissions are sometimes referred to as
direct emissions.

Examples of scope 1 emissions are:

• emissions produced from manufacturing processes, such as from the manufacture of cement
• emissions from the burning of diesel fuel in trucks
• fugitive emissions, such as methane emissions from coal mines
• production of electricity by burning coal.

Scope 1 emissions must be reported under the NGER scheme.

Scope 2

Indirect emissions that are associated with the use of purchased electricity (or heating, cooling or
steam) at a facility. Scope 2 emissions from one facility are part of the scope 1 emissions from
another facility.

Examples of scope 2 emissions are the emissions from electricity purchased (or heating, cooling or
steam) and used by:

• a car factory to power its machinery and lighting

• an aluminium smelter to power electrolytic processes

• a large supermarket for lighting, heating or cooling.

Scope 2 emissions must be reported under the NGER scheme.

Scope 3

Scope 3 emissions are all other indirect greenhouse gas emissions other than scope 2 emissions that
are generated in the wider economy. They occur as a consequence of the activities of a facility, but
from sources not owned or controlled by that facility's business.

Examples of scope 3 emissions are the emissions associated with the:

• extraction and production of purchased materials

• transportation of purchased fuels

• use of sold products and services

• flying on a commercial airline by a person from another business.

Scope 3 emissions are not reported under the NGER scheme.

Table 2.1 Scope 1, 2 and 3 emissions (CER, 2023b).

Page | 20
Reporting requirements for energy production and consumption
The NGER Regulations, in conjunction with the Measurement Determination, require the total energy
content of energy produced or consumed from various fuels (such as coal, petroleum, gas and biofuel)
or energy commodities (such as sulphur, uranium and hydrogen) to be reported. Electricity production
and consumption must also be reported if the generating unit has the capacity to produce at least 0.5
megawatts (MW) of electricity and generates more than 100,000 kilowatt hours (kWh) of electricity (or
20,000 kWh if the electricity is not generated at the facility). Where electricity production is reported, it
is necessary to identify certain sources of electricity (e.g. whether it was thermal, geothermal, solar,
wind, water or biogas generation).
For example, if a coal-fired power plant uses coal to produce electricity it must report the coal used as
an energy source and the electricity generated as energy production. The reporting scheme covers
most of Australia’s energy production and consumption.
Reporting requirements for greenhouse gas emissions
The NGER Act requires scope 1 and scope 2 emissions data to be reported (see Table 2.2). Scope 1
emissions are the release of a greenhouse gas into the atmosphere as a direct result of an activity or
series of activities that constitute the facility (Division 2.5, NGER Regulations). Scope 2 emissions are
indirect emissions that are the result of purchased electricity (or heating, cooling or steam) that is
consumed by the facility (Division 2.5, NGER Regulations).
Scope 2 emissions are reportable if electricity consumed at a facility is purchased from the main
electricity grid of a state or territory, a network other than the main grid, or a direct connection from
the producer (CER, 2023b). Electricity produced and consumed at the same facility does not give rise to
reportable scope 2 emissions (CER, n.d., a). For example, a power station burns coal to create
electricity, causing reportable scope 1 emissions for the power station. If the electricity is then supplied
to the grid and consumed by a factory to power its machinery, the emissions that resulted from the
burning of the coal to create the electricity used in the factory represent scope 2 emissions which must
be reported by the factory. It is important to note a facility’s scope 2 emissions are another facility’s
scope 1 emissions. However, the availability of scope 1 and scope 2 data is important for understanding
how energy consumers, through their demand for electricity, influence the amount of greenhouse gas
emissions being emitted by the power station.
Under the NGER scheme, companies must report their emissions of carbon dioxide, methane, nitrous
oxide, sulphur hexafluoride, and certain hydrofluorocarbons and perfluorocarbons (CER, 2023b). This is
broadly consistent with the gases covered under the United Nations Framework Convention on Climate
Change (UNFCCC, 1997) and those reported in Australia’s greenhouse gas inventory (DCCEEW, 2023b).
Emissions reported under the NGER scheme
The NGER Regulations, in conjunction with the Measurement Determination, requires all scope 1
emissions arising from energy (including fuel combustion and fugitive emissions), industrial processes
and waste to be reported. Scope 1 emissions from agriculture, land use, land use change, forestry,
private vehicle transport and residential sectors are not included under the scheme. For example,
agricultural businesses are not required to report scope 1 emissions arising from agricultural activities,
such as methane emissions from livestock. However, these businesses must report any scope 1
emissions due to fuel combustion, industrial processes and waste, scope 2 emissions and energy
production and consumption, provided they meet the reporting threshold.

Page | 21
 Total NGER total
NGER proportion of
Australian reported scope 1
Emissions source source emissions
emissions emissions
reported (%)
(Mt CO2-e) (Mt CO2-e)

Energy – fuel combustion

Electricity generation 163 149 91

Transport 90 16 18

Other fuel combustion 102 83 5 81

Energy – fugitive emissions 49 42 86

Industrial processes 33 21 64

Waste 13 4 31

Agriculture 78 0 0

Land use, land use change and forestry -64 0 0

TOTAL 465 315 68

Table 2.2 The proportion of Australia’s emissions captured under the NGER scheme by sector for the
reporting year 2020-21. Total Australian emissions (DCCEEW, n.d.) and NGER total reported scope 1
emissions.

Emissions from the transport and waste sectors are not well covered by the scheme due to the
requirement for reporters to be constitutional corporations. For the transport sector, a significant
portion of emissions are due to light vehicles owned by individuals who do not need to report. For the
waste sector, many landfills are owned by local councils which also do not meet the definition of
constitutional corporation.
While the majority of emissions for the fugitive emissions, industrial processes and other fuel
combustion inventory sectors are covered under the NGER scheme, a little over 30% of Australia’s net
emissions are not reported. Other approaches are used to obtain estimates for the remaining sources
of Australia’s emissions that are not reported under the scheme (which are largely from agriculture,
small-scale manufacturing industries, transport and service industries).
Methods to estimate emissions
Emissions are only reportable if there is a relevant method available in the Measurement
Determination which specifies how to estimate the emissions from a particular source (Section 13,
NGER Act). There are up to four possible methods available for estimating scope 1 emissions from each
source (Methods 1, 2, 3 and 4). The availability of each method in the Measurement Determination
differs depending on the source of emissions, and reporters can currently choose which method to use
out of those available. Generally, the higher the method used to estimate emissions, the more accurate
the estimated emissions (CER, 2022c).

5
This number may include some fuel combustion emissions from on-site electricity generation.
Page | 22
Method 1 is the simplest estimation method, and is based on default emission factors which are used
to estimate greenhouse gas emissions of a particular activity by converting a unit of activity into an
emissions equivalent (DCCEEW, 2023c). Emission factors are often based on a sample of measurement
data, averaged to develop a representative rate of emissions for a given activity (IPCC, 2019a). The
amount of emissions is calculated by multiplying the specific emission factor by the quantity of the
activity. The Method 1 emission factors available in the Measurement Determination are based on
those used in Australia’s National Greenhouse Gas Inventory (Explanatory Statement, National
Greenhouse and Energy Reporting (Measurement) Amendment (2023 Update) Determination 2023,
2023). Most of these are country-specific values derived from studies which reflect emissions from
activities undertaken in an Australian context.

NGER Methods 2 and 3 require the use of progressively higher levels of facility-specific information to
estimate emissions, such as through sampling according to Australian or international standards.
Method 4 is the most sophisticated, requiring direct measurement or monitoring of emissions.

Method 1 Method 2 Method 3 Method 4

The simplest method, Requires facility- Very similar to method Typically requires
also referred to as the specific information 2, except that it direct monitoring or
default method. It uses such as industry-based requires Australian or measuring of emissions
emission factors. sampling and applies international standards on a periodic or
Australian or to be applied to both continual basis.
international sampling and analysis.
standards, or their
equivalent, to the
analysis.

Table 2.3 An overview of the methods included in the NGER Measurement Determination.
For scope 2 emissions, the Measurement Determination provides two compulsory location-based 6
methods (Methods A1 and A2) to estimate emissions from the consumption of purchased energy
depending on whether the electricity was purchased from the main grid or from other sources. These
methods employ emission factors of tonnes of scope 1 emissions per kilowatt hour of electricity
consumed. Scope 2 emission factors for the consumption of purchased electricity from Australia’s
major electricity grids are updated annually to reflect the latest data on the mix of electricity
generation sources, which is a major determinant of the emission factors (CER, 2022d). This is known as
the location-based method where the emission factor reflects the average emissions of the grid.
In June 2023, the Measurement Determination was updated to introduce optional and supplementary
reporting of market-based scope 2 emissions from consumption of electricity purchased or acquired
from an external (to the facility) network. This amendment allows reporters to have the lower
emissions associated with some electricity purchases reflected in their scope 2 emissions.
2.2.3 Reporting cycle
All registered controlling corporations (and group members or corporations that have taken on
reporting responsibilities) are required to submit an NGER report each year (Section 19, NGER Act).
Reports are submitted electronically through the Emissions and Energy Reporting System (EERS). The
deadline for reporting is 31 October (or the next working day if the date falls on a weekend or public

6
Location-based means reporters must report the fuel or electricity they physically consume.
Page | 23
holiday) for the preceding financial year (CER, 2022e).
2.2.4 Publication of data reported under the NGER scheme
Not all information reported under the NGER scheme is published. By 28 February, the regulator is
required to publish specific data reported by corporations above certain emissions thresholds, known
as the “publication threshold” (Section 24, NGER Act).
The publication threshold for controlling corporations is 50 kt CO2-e per year for combined scope 1 and
2 emissions. For each corporate group that meets this threshold, the regulator must publish its total
scope 1 emissions, total scope 2 emissions and net energy consumption. For Reporting Transfer
Certificate (RTC) holders, if the reported combined scope 1 and 2 emissions are 25 kt CO2-e or more, or
the production or consumption of energy is 100 TJ or more, the regulator must publish its total scope 1
emissions, total scope 2 emissions and net energy consumption.
Under section 24 of the NGER Act the regulator must also publish data on emissions and energy
produced by designated electricity generation facilities.
More detailed data is available for use by governments under strict confidentiality conditions.
2.2.5 Audit framework
The audit framework established under the NGER Act applies to the NGER scheme as well as other
schemes the regulator administers. Audits are not mandated under the NGER scheme, however the
regulator actively encourages reporters to conduct voluntary audits. The regulator may also initiate an
audit under certain circumstances, such as when it has grounds to suspect non-compliance.
Under the NGER Act, the regulator is required to maintain a register of auditors to assist participants
and appoint a suitable auditor.
2.3. The Safeguard Mechanism

The Safeguard Mechanism provides a framework to reduce emissions at Australia’s largest industrial
facilities through legislated limits, known as baselines, on scope 1 emissions. If a Safeguard facility
exceeds its baseline, excess emissions must be managed. Facilities that fail to comply with the
Safeguard Mechanism can become liable to pay a penalty (CER, 2023c).
The Safeguard Mechanism was first legislated in 2014 and commenced operation in 2016 (DCCEEW,
2023d). The policy has recently undergone significant reforms which came into effect on 1 July 2023. To
provide assurance that industrial facilities will deliver a proportional share of Australia’s emissions
reduction targets (43% below 2005 levels by 2030 and net zero by 2050) and achieve real emissions
reductions, the reforms included the addition of emissions targets in the second object of the NGER
Act.

Page | 24
These emissions targets are known as the “Safeguard outcomes” and include:

• Total net Safeguard emissions for all of the financial years between 1 July 2020 and 30 June
2030 do not exceed a total of 1,233 million tonnes of carbon dioxide equivalence.
• Net Safeguard emissions decline to:
i. no more than 100 million tonnes of carbon dioxide equivalence for the financial year
beginning on 1 July 2029
ii. zero for any financial year to begin after 30 June 2049.
• The 5-year rolling average of Safeguard emissions for each financial year that begins after 30
June 2024 is lower than the past 5-year rolling average safeguard emissions for that financial
year.
Under the Safeguard reforms, when the Minister makes or amends the Safeguard Rules, they must be
satisfied that those rules are consistent with the Safeguard outcomes, as well as the other objects of
the Act. The Minister is also required to publish their reasons for being satisfied (Section 22XS, NGER
Act).
Other key elements of the reforms included declining facility baselines, which reduce over time, and
the introduction of Safeguard Mechanism Credits (SMCs) to incentivise facilities to reduce their
emissions beyond their baselines.
The Safeguard Mechanism is administered through the NGER scheme, therefore facilities under the
Safeguard Mechanism must also adhere to the reporting requirements outlined in Section 2.2.
2.3.1 Safeguard facilities
The Safeguard Mechanism applies to facilities that emit gross scope 1 emissions of 100 kt CO2-e per
year, or more (Part 2, Safeguard Rule). This applies to facilities across a broad range of industry sectors
including mining, oil and gas extraction, manufacturing, electricity generation, transport and waste
(DCCEEW, 2023e).
The Safeguard Mechanism has been designed to accommodate the unique circumstances of the
electricity generation and waste sectors:
• For the electricity sector, a single ‘sectoral’ baseline of 198 Mt CO2-e (based on the electricity
sector’s emissions from 2009-2010 to 2013-2014) is applied across all electricity generators
connected to one of Australia’s main electricity grids and is not expected to be exceeded
(Australian Government, 2023).
• For the waste sector, only emissions from waste deposited after the scheme commenced in
2016 are covered (Australian Government, 2023).
In 2021-22, the Safeguard Mechanism covered 219 facilities (CER, 2023d) predominantly in the mining,
manufacturing, gas and transport sectors. Figure 2.2 shows the breakdown of the number of Safeguard
facilities by sector (excluding grid-connected electricity generators which are subject to a sectoral
baseline). These facilities reported a total of 137.5 Mt CO2-e scope 1 emissions in 2021-22 (CER, 2023d),
accounting for 35% of the total emissions reported under the NGER scheme (CER, 2023e).

Page | 25
 140 132

120
Number of Safeguard facilities

100

80

60
49

40

20
20
8 6 4
0
Mining Manufacturing Transport Gas supply Electricity Other
generation (exc.
grid-connected)

Figure 2.2 The number of Safeguard facilities by sector, excluding grid-connected electricity generators.

2.3.2 Baseline setting

Following the reforms to the Safeguard Mechanism, from 2023-24 baselines for all facilities will be set
using a production-adjusted (intensity) framework. This involves multiplying a production value by an
emissions intensity value, allowing baselines to grow and fall with production.
Baselines for existing facilities will be set using a hybrid industry-average site-specific emissions
intensity model, with ratios initially weighted towards site-specific values and transitioning to entirely
industry-average values by 2030, as outlined in Table 2.4. This approach was chosen by the Department
of Climate Change, Energy, the Environment and Water (the department) because industry average
baselines are expected to be more efficient as they provide an incentive for production to occur where
emissions are lowest (DCCEEW, 2023d). This approach also removes aggregate headroom, allowing for
crediting and trading to begin at scheme commencement.

2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30

Industry Average:
10 : 90 20 : 80 30 : 70 40 : 60 60 : 40 80 : 20 100 : 0
Site Specific

Table 2.4 The hybrid industry average/site-specific emissions intensity weighting model to be used for
existing facilities.

Site-specific emission intensity values for existing facilities are set using historic data, calculated using
the middle three values from the five most recent years of data (2017-18 to 2021-22) to calculate a
production-weighted, average emissions intensity value(s) for the facility.
The baselines for new facilities will be set using international best practice emissions-intensity values
(adapted for the Australian context), recognising these facilities have the opportunity to use the latest
technology and build international best practice emissions performance into the design of the facility.
This also applies to existing facilities that begin producing new products (DCCEEW, 2023d).

Page | 26
2.3.3 Data published for Safeguard facilities
Under the NGER legislation, the regulator will be required to publish by 15 April (for financial years
2023-24 onwards) the following information for the preceding year for each facility covered under the
Safeguard Mechanism:

• amount of covered emissions (gross scope 1 emissions)

• breakdown of covered emissions by carbon dioxide, methane and nitrous oxide
• baseline emissions number
• number of Safeguard Mechanism Credits (SMCs) issued
• if a monitoring period for the facility ended during the preceding year, the following is also
published
o the facility’s net emissions number
o the number and type of offsets surrendered
o the methodology determinations under which any surrendered ACCUs were created.

The regulator is also required to publish for each financial year between 1 July 2023 and 30 June 2030 a
report on the outcomes from Safeguard facilities for each financial year, including gross emissions, net
emissions, 5 year rolling average and total cumulative emissions over financial years since 1 July 2020.
Further information about the Safeguard Mechanism and the administration and compliance of the
NGER legislation can be found in Appendix E.

Page | 27
Page | 28
3. The reporting scheme
3.1. Performance of the scheme
In assessing whether the NGER scheme is meeting the objective set out in the NGER legislation, it is
important to consider the context in which the scheme is operating. This includes the requirements for
international reporting obligations, the needs of government policy and the needs of the Australian
public, along with the global environment in which Australia is operating.
3.1.1 The NGER scheme in the Paris Plus context
As outlined in Chapter 1, the context in which the NGER scheme is operating has changed since its
introduction in 2007, and even since 2018, when the authority completed its first review of the scheme.
Australia now finds itself in the world of ‘Paris Plus’ — a world in which governments and markets are
reorienting to net zero emissions.
In this Paris Plus world, there is an ever-increasing demand for climate-related data from governments
and markets alike. Governments are not only tracking their progress towards their domestic targets but
are also looking more closely at the emissions generated across the global supply chains that cross their
borders (CCA, 2021a). Capital is increasingly being allocated to less carbon intensive investments (CCA,
2021a).
Around the world, new policies and initiatives that support the provision of climate-related data for
governments, markets and consumers are emerging. Examples include: Carbon Border Adjustment
Mechanisms (CBAMs), climate-related financial disclosures and product-based embedded emissions
accounting schemes. Here in Australia, the government is currently developing a Guarantee of Origin
(GO) scheme (a product-based embedded emissions accounting scheme) (DCCEEW, 2023f) and climate-
related financial disclosure mandates (The Treasury, 2023) — both of which have links to the NGER
scheme and are expected to begin in 2024. The government is also undertaking a review of carbon
leakage, due in late 2024, which will include an assessment of the feasibility of an Australian Carbon
Border Adjustment Mechanism, particularly in relation to steel and cement (DCCEEW, 2023g).
This chapter considers the performance of the NGER scheme against the objective of the legislation in
the context of ‘Paris Plus’. It also explores the potential interactions between the NGER scheme and the
emerging GO scheme and the proposed climate-related financial disclosure system.
3.1.2 Meeting Australia’s international reporting obligations
The NGER scheme plays an integral role in providing the data for Australia to meet its international
reporting obligations including to the United Nations Framework Convention on Climate Change
(UNFCCC) and the International Energy Agency (IEA) (DCCEEW, 2022b).
Australia’s annual National Inventory Report and associated Common Reporting Tables (CRTs) fulfil its
national inventory reporting obligations under both the UNFCCC and the Paris Agreement (DCCEEW,
2023a). The national greenhouse inventory, of which the NGER dataset is a key source, is also the
official basis for tracking progress towards Australia’s national emissions reduction targets submitted
under its Nationally Determined Contribution (NDC). In the most recent National Inventory Report, the
Department of Climate Change, Energy, the Environment and Water (the department) noted that the
NGER scheme is one of the most critical assets in the preparation of these reports (for the sectors
where facility-level data is relevant) (DCCEEW, 2023a). NGER data covers three of the five emission
source sectors (Figure 3.1) — energy, industrial processes and product use (IPPU) and waste — and is
used to estimate approximately 60% of Australia’s emissions (DCCEEW, 2023a).

Page | 29
 Land use,

Fugitives
Energy –
land use

IPPU

Waste
Energy – Fuel Combustion Agriculture
change and
forestry**

Informed by NGER data Not informed by NGER data

Figure 3.1 Sectors in Australia’s National Inventory Reports that are informed by NGER data.
The width of the boxes is proportional to the sector’s contribution to total inventory emissions.
*The land use, land use change and forestry is a net negative contributor.

The NGER dataset is also used to prepare the Australian Energy Statistics (AES). The AES is the
authoritative and official source of energy statistics for Australia and forms the basis of Australia’s
international reporting obligations to the IEA (DCCEEW, 2023h). The AES provides detailed energy
consumption, production and trade statistics and balances, by state and territory, by energy type and
by industry, in energy content units and volume or mass units (DCCEEW, 2023i). Facility level data from
the NGER scheme are a key input to the AES (DCCEEW, 2022c).

It will be important to ensure that the NGER scheme continues to support Australia’s international
reporting obligations and policy development in the same robust manner it has since 2008. In
formulating recommendations for the NGER scheme in this review, the authority has carefully
considered opportunities for supporting emerging data needs and maintaining the integrity of the
scheme.
3.1.3 Informing government policies, programs and activities

The NGER scheme collects information on energy and emissions which informs government policies,
programs and activities. In addition to publicly available data, government agencies can access the
more extensive dataset reported under the reporting scheme relevant to their jurisdiction, subject to
requirements for data protection and confidentiality. Currently, the Clean Energy Regulator (the
regulator) shares more detailed NGER data with 45 Commonwealth, state and territory, and local
government agencies (CER pers. comms.).

State and territory government agencies use NGER data for a range of different activities including
emissions and energy modelling, and designing policies, strategies and programs. For example, the
NSW Government uses NGER data to develop regional- and local-scale greenhouse gas emissions
datasets, which are compiled to inform state, regional and local climate mitigation actions (NSW DPE,
2022). The NSW Government makes these regional- and local-scale emissions datasets that they derive
from this analysis accessible through the NSW Net Zero Emissions Dashboard (NSW DPE, 2022).

At the federal level, NGER data informs policy design and implementation. Federal agencies use NGER
data to model future emissions and to track progress towards emissions reduction targets. As Australia
moves towards net zero, measuring and accounting for every tonne of greenhouse gas emissions will
be essential, placing an even higher emphasis on the accuracy and integrity of NGER data (IPCC, 2022).

NGER data was used in the design of the reformed Safeguard Mechanism and will underpin emissions
reported by Safeguard facilities each financial year as they meet their compliance obligations.
Importantly, declining baselines and the creation of Safeguard Mechanism Credits (SMCs) mean NGER
data and methods will go beyond providing information and will be integral to the operation of new
markets. Safeguard facility emissions numbers, calculated using NGER methods, will underpin the
assessment of Safeguard facilities’ performance against their baselines, including calculation of any
liability that needs to be addressed (e.g. by surrender of ACCUs or SMCs), and any SMCs generated. This

Page | 30
new role for the NGER scheme places an even higher emphasis on accuracy, transparency, and
integrity.

NGER scheme elements are also used to inform other federal policies, programs and initiatives
including Climate Active, the Corporate Emissions Reduction Transparency initiative and the ACCU
Scheme (Climate Active , 2022; CER, 2023f; CER, 2021). As discussed further below, future federal
policies and initiatives will also interact with the NGER scheme, including the GO scheme and the
climate-related financial disclosures.

The authority also uses NGER data to inform its advice to the government on progress towards national
emissions reduction targets and sectoral emissions reduction.
3.1.4 Informing the Australian public

The regulator is required by legislation to publish certain information collected under the NGER
scheme:
• Scope 1 and 2 emissions and net energy consumption by company (for those that meet the
relevant publication threshold).

• Scope 1 and 2 emissions and net energy consumption for Reporting Transfer Certificate (RTC)
holders (for those that meet the relevant publication threshold).
• Facility-level emissions and generation data for designated electricity generation facilities.
• Facility-level emissions data for Safeguard facilities.
• A list of all registered reporters under the NGER Act.

• A register of greenhouse and energy auditors.

The regulator also publishes additional aggregated data, permitted under the legislation, to provide
additional insights to the Australian public (CER, 2023g).

Respondents to the authority’s consultation on the review noted the role of the NGER scheme in
informing the Australian public, but have emphasised that the needs of the public are changing:

The data gathered has enabled higher quality public policy, progress tracking and
public accountability…. However, as the need for high-quality, transparent data
increases, the NGER scheme should be improved.

Climateworks, submission to this review

…Expectations and needs associated with emissions disclosure have significantly

evolved [since 2007]. There is now a wider group of stakeholders that require access
to reliable information on corporate emissions. This group includes financial
institutions, who need emissions data to inform their investment and lending
decisions.

Australian Sustainable Finance Institute, submission to this review

Page | 31
The authority recognises the needs of the Australian public have been evolving, particularly in the Paris
Plus context. For example, NGER data will have an increasingly important role to play in verifying
emissions and energy claims made by companies (where the companies are NGER reporters). Already,
the regulator works closely with other regulators, such as the Australian Competition and Consumer
Commission and the Australian Securities and Investment Commission and provides data and
information in support of their potential regulatory action relating to greenwashing (CER, 2023h).

Transparency is a key theme of the authority’s NGER review this year. Detailed findings and
recommendations on the transparency of the NGER scheme can be found in Section 3.4.
3.1.5 Reducing duplication

Reducing duplication of emissions and energy reporting requirements across jurisdictions and
minimising the regulatory burden on businesses was one of the primary motivations for establishing
the NGER scheme (Revised Explanatory Memorandum, National Greenhouse and Energy Reporting Bill
2007). The 2018 review found that cases of duplicative reporting had largely been eliminated, with only
a small number of instances where some duplication remained. In those instances, the authority
considered that a limited amount of duplication was necessary due to different reporting schemes
having different purposes, frameworks and definitions (CCA, 2018).

The authority has not been made aware of any major changes to the current state of reporting and
levels of duplication since the 2018 review. However, new reporting schemes are emerging at the
national level — some voluntary and some mandatory — where there is the potential for unnecessary
duplication of reporting to emerge. The next section explores the potential interactions between the
NGER scheme and these emerging schemes.
3.1.6 Interactions with emerging reporting schemes
Climate-related financial disclosures and the GO scheme are two examples of emerging reporting
schemes in Australia with links to the NGER scheme. While both schemes are still under development in
2023, the authority has considered the potential future interactions between these emerging schemes
and the NGER scheme. As the climate reporting and information environment continues to develop in
Australia, it will be important to ensure complementarity between the schemes and avoid unnecessary
duplication of reporting.
Climate-related financial disclosures
The government has committed to ensuring large businesses and financial institutions provide greater
transparency and accountability when it comes to their climate-related plans, financial risks, and
opportunities (The Treasury, 2023). As part of this commitment, the government will introduce
standardised, internationally-aligned reporting requirements for businesses to make disclosures
regarding governance, strategy, risk management, targets and metrics — including greenhouse gas
emissions (The Treasury, 2023). The government is proposing to phase in the requirements over three
years, beginning in 2024-25.
In June 2023, the government released a consultation paper on proposed positions for the detailed
implementation of disclosure of climate-related financial risks and opportunities (The Treasury, 2023).
Legislation was also introduced to Parliament this year to give the Australian Accounting Standards
Board (AASB) the ability to develop climate-related reporting standards. The next steps will be for the
AASB to develop and consult on these standards.

Page | 32
The proposed design of the climate-related financial disclosures identifies interactions with the NGER
scheme:
• Determining who must make a disclosure – all entities that are required to report under
Chapter 2M of the Corporations Act 2001 that are registered as a ‘Controlling Corporation’
reporting under the NGER Act are proposed to be covered by climate-related disclosure
requirements, even if they do not meet the main threshold criteria that will be set for the
disclosures (The Treasury, 2023).

• Determining when disclosures will be phased in – it is proposed that requirements for NGER
reporters to make disclosures will be phased in based on the NGER publication threshold (50 kt
CO₂-e), with those over the publication threshold in group 1 (disclosures starting in 2024-25)
and those below the publication threshold in group 3 (disclosures starting in 2027-28)
(The Treasury, 2023).

• Information in the disclosure – it is proposed that disclosures will include gross 7 scope 1 and 2
emissions for the reporting period and that these will be calculated consistent with methods
set out in the NGER legislation (The Treasury, 2023). It is also proposed that companies would
be required to disclose material scope 3 emissions, material climate-related risks and
opportunities to their business, and information on scenario analysis and transition planning.
• Auditing providers – it is proposed that the Register of Greenhouse and Energy Auditors
established under the NGER scheme would be available for the use of climate-related
disclosure audits (The Treasury, 2023).
The NGER scheme and the proposed climate-related financial disclosures will serve two different but
important purposes. The authority is of the view that the proposed ways in which the NGER scheme will
support the disclosures are appropriate — the NGER scheme will provide a reliable and nationally
consistent framework for calculating emissions in the disclosures, ensuring the emissions reported
across the two schemes are comparable and robust. The authority has identified further opportunities
for the NGER scheme to support robust and consistent emissions reporting via the climate-related
financial disclosures. These opportunities are discussed below in Section 3.2 Coverage.
Guarantee of Origin scheme
The government is developing a GO scheme to track and verify emissions associated with hydrogen,
renewable electricity, and potentially other products (CER, 2023i). The GO scheme will include a
product-based emissions accounting framework that measures and tracks emissions across the value
chain — i.e. the emissions ‘embedded’ in the product. It is intended that the scheme will be voluntary
and will support businesses and consumers looking to credibly demonstrate the low emission
characteristics of the products or energy that they produce or purchase (DCCEEW, 2023j).
In 2023, the department continued to develop the GO scheme including consulting on the proposed
scheme design (DCCEEW, 2023j). In parallel, the regulator has been conducting trials to test the GO
scheme for tracking and verifying emissions embedded in hydrogen and its derivatives (CER, 2023i; CER,
2023j). The scheme is intended to be legislated by the start of 2024 (DCCEEW, 2022d).

7
Defined here as emissions without the consideration of offsets.
Page | 33
The GO scheme is proposed to be established under new legislation and implemented by the regulator
(DCCEEW, 2023j). Consultation conducted by the department revealed that this was the preferred
approach by stakeholders, over an amendment to the NGER Act (DCCEEW, 2022d). Nevertheless,
interactions exist between the proposed GO scheme and the NGER scheme:
• The GO scheme will draw upon the NGER Measurement Determination in establishing
emissions measurement and approaches, and when there is an overlap between the two
schemes, the GO scheme will look to align the measurement and emissions approach with the
NGER method (DCCEEW, 2022d).

• The department has proposed that participants in the GO scheme may use supplier-specific
emissions data or default emissions factors for calculating upstream emissions, where the use
of supplier-specific emissions data may draw on NGER data, if the supplier is an NGER reporter
(DCCEEW, 2022d).
• The department is considering the alignment of audit requirements under the NGER scheme
and the GO scheme, to improve efficiency and reduce participation costs where a business
participates in both schemes (DCCEEW, 2022d).
3.2. Coverage
In assessing the performance of the NGER scheme, the authority considered the key theme of
coverage, including reporting thresholds, sectoral coverage and scope 3 emissions.
3.2.1 Reporting thresholds
Reported emissions under the NGER scheme currently include 68% of emissions reported in Australia’s
national greenhouse gas inventory (Table 2.3). The proportion of emissions reported across each sector
varies, with nearly full coverage of electricity generation emissions, less than 20% coverage of transport
emissions, and no coverage of agricultural emissions (Table 2.3).
As the Australian economy decarbonises over the coming decades, it is critical that the NGER scheme
continues to meet its legislated objectives. To this end, the authority is of the view that it will be
important to ensure:
• the proportion of emissions across each sector reported under the scheme is sufficient and
does not decline below current levels
• the total scope 1 emissions reported under the scheme as a percentage of Australia’s total net
emissions across all sectors (including those that do not currently report such as agriculture)
does not decline below the current 68% level.
The authority notes that the current 68% level of coverage would increase if emissions from the
agricultural sector are reported under the scheme, and is of the view that the increased level of
coverage should also be maintained. The recommendations and supporting analysis in this chapter set
out a pathway for achieving this.

Under the NGER scheme, the reporting thresholds determine which companies have an obligation to
report their emissions and energy data to the regulator. There are two types of thresholds: facility and
corporate group thresholds. Companies are required to report if they exceed any of the thresholds in
Table 3.1 (Section 13, NGER Act).

Page | 34
 Scope 1 and 2 emissions Energy
Energy use
combined production
(TJ per year)
(kt CO2-e per year) (TJ per year)

Corporate group threshold 50 200 200

Facility threshold 25 100 100

Table 3.1 The NGER scheme reporting thresholds for corporate groups and facilities.

These thresholds were set based on a cost-benefit analysis when the NGER scheme was established
(Revised Explanatory Memorandum, National Greenhouse and Energy Reporting Bill 2007). It was
estimated that the scheme would cover 71% of emissions (excluding IPCC-defined Agriculture and Land
Use, Land Use Change and Forestry emissions), with the conclusion that this ‘would provide sufficient
coverage of emissions and energy data to provide a sound basis for greenhouse gas and energy policy
development and programme administration and maintain the integrity of existing national data
collections’ (Revised Explanatory Memorandum, National Greenhouse and Energy Reporting Bill 2007).

In relation to the current reporting thresholds of the NGER scheme, the authority heard from various
stakeholders through its public consultation:

• Support for reducing reporting thresholds to achieve greater coverage of a broader range of
corporate and facility emissions data, providing a more comprehensive understanding of
Australia's greenhouse gas emissions profile.
• Current reporting thresholds potentially exclude companies with the real ability to implement
improvements, and extending the coverage of the NGER framework could help smaller
businesses decarbonise and improve their energy performance.
• Reporting thresholds may need to be lowered as businesses reduce their emissions to maintain
visibility of emitters.
• NGER scheme reporting obligations should align and be complementary with those for any
incoming or future mandatory climate-related disclosures.

• The complexity of the scheme may become problematic if smaller entities are required to begin
reporting and there is no simplification of reporting (e.g. mandatory reporting for scope 1
emissions only) to enable a greater number of smaller entities to report.
In the public survey conducted for this review, the authority asked respondents if the current corporate
group and facility reporting thresholds were appropriate. Nearly half of respondents (26/53) thought
both the corporate group and facility reporting thresholds were about right, while around a fifth
(10/53) of respondents thought the reporting thresholds were too high and around a fifth (10/53) of
respondents thought the reporting thresholds were too low.
Analysis of the current reporting thresholds
Noting the interest the authority observed in lowering the reporting threshold/s and the need to
ensure the total reported emissions under the NGER scheme is sufficient as Australia decarbonises, the
authority explored the option of reducing the corporate group and facility thresholds. This section
presents the results of this analysis.

Page | 35
Table 3.2 outlines the percentage of reporters 8 meeting the corporate group and facility thresholds,
and the associated share of emissions reported in 2021-22.

Percentage of reporters Share of emissions

triggering threshold (%) reported (%)

Corporate group energy and emissions

52 97.9
thresholds

Corporate group energy threshold only 37 1.7

Corporate group emissions threshold only 1 0.1

Facility threshold (emissions or energy) 10 0.3

Does not meet any corporate group or facility

0.4 < 0.01
threshold

TOTAL 100% 100%

Table 3.2 The percentage of reporters meeting each threshold and the associated share of emissions
reported in 2021-22.

There is a clear trend towards reporters meeting a corporate group threshold, with 90% meeting one or
both corporate group thresholds. The authority’s analysis found that the corporate group energy
threshold is the most common reporting threshold, which is met by 89% of reporters and accounts for
nearly all emissions reported under the NGER scheme (more than 99%, Table 3.2).

8
At the corporate group level
Page | 36
Further analysis of emissions by sector revealed that more than 99% of emissions reported for nearly all
sectors (apart from waste) are reported due to the corporate group energy consumption threshold
being exceeded, shown in Figure 3.2. For the waste sector, 87% of emissions are reported due to the
corporate group energy consumption threshold being exceeded.

100%

80%
Percentage of sector's emissions

60%

>99% >99% >99% >99% >99% 87%

40%

20%

0%
All other fuel Electricity Fugitive Industrial Transport Waste
combustion generation emissions processes

Figure 3.2 The percentage of emissions reported for each sector due to the corporate group energy
consumption threshold being exceeded.
To better understand the effectiveness of the current corporate group and facility thresholds, the
authority looked at the distribution of reported emissions and energy consumption and production at
both the company (reporter) and facility level.
Distribution of reported emissions and energy consumption and production by corporate group
The authority found that 95% of emissions are reported by 34% of companies in 2021-22 (Figure 3.3).
The distributions of energy consumption and energy production reported by companies (Figure 3.4
and 3.5) show that around 89% of reporters 9 under the scheme met the corporate group energy
consumption threshold compared to 30% of reporters 10 that met the corporate group energy
production threshold.
It is evident that both the corporate group emissions and energy consumption thresholds play a key
role in terms of the emissions (Table 3.2) and energy consumption (Figure 3.4) reported under the
NGER scheme.

9
Comprising 14% reporting total annual energy consumption of between 200 TJ and 300 TJ and 75% reporting
total annual energy consumption of more than 300 TJ (Figure 3.4).
10
Comprising 3% reporting total annual energy production of between 200 TJ and 300 TJ and 27% reporting total
annual energy production of more than 300 TJ (see Figure 3.5).
Page | 37
As companies reduce their emissions over the coming years, they may fall below the corporate group
emissions threshold. However, as a large proportion of companies trigger the corporate group energy
consumption threshold, it is expected that a majority of current reporters will still have an obligation to
report under the NGER scheme (assuming energy consumption levels of these businesses remain
relatively constant). Furthermore, the authority also notes that 75% of companies reported a total
annual energy consumption of at least 300 TJ. This is well above the corporate group energy
consumption threshold of 200 TJ. Therefore, it is not expected that the coverage of the scheme will
reduce significantly between now and the next review of the NGER legislation in 2028.

Total annual emissions reported

100 + 95% 100 + 34%
Total annual emissions reported

75 -100 1% 75 -100 8%

(kt CO₂-e)
(kt CO₂-e)

Corporate group emissions Corporate group emissions

50 - 75 1% 50 - 75 12%
threshold (50 kt CO₂-e) threshold (50 kt CO₂-e)

25 - 50 1% 25 - 50 19%

0 - 25 1% 0 - 25 27%

Percentage of total emissions reported Percentage of reporters

Figure 3.3 The percentage of emissions reported for various bands of total annual emissions reported at
the corporate group level (left) and the percentage of reporting companies in each band (right).
Total annual energy consumption

Total annual energy consumption

300 + 99.7% 300 + 75%

reported (TJ)

reported (TJ)

200 - 300 0.2% Corporate group energy 200 - 300 14% Corporate group energy
consumption threshold (200 TJ) consumption threshold (200 TJ)

100 - 200 0.1% 100 - 200 9%

0 - 100 0.0% 0 - 100 2%

Percentage of total energy consumption reported Percentage of reporters

Figure 3.4 The percentage of energy consumption reported for various bands of total annual energy
consumption reported at the corporate group level (left) and the percentage of reporting companies in
each band (right).
production reported (TJ)

production reported (TJ)

Total annual energy

Total annual energy

300 + 99.95% 300 + 27%

200 - 300 0.02% Corporate group energy 200 - 300 3% Corporate group energy
production threshold (200 TJ) production threshold (200 TJ)

100 - 200 0.01% 100 - 200 4%

0 - 100 0.01% 0 - 100 67%

Percentage of total energy production reported Percentage of reporters

Figure 3.5 The percentage of energy production reported for various bands of total annual energy
production reported at the corporate group level (left) and the percentage of reporting companies in
each band (right).
Page | 38
Distribution of reported emissions and energy consumption and production by facility
Figures 3.6, 3.7 and 3.8 show the distribution of emissions, energy consumption and energy production
reported at the facility level in 2021-22. The authority found that the majority of reporting facilities
(77%) did not meet any facility threshold, indicating that most facilities report due to a corporate group
threshold being met. The authority also found the distribution of emissions and energy consumption
and production reported at the facility-level was heavily skewed, with a small number of facilities
accounting for a significant proportion of emissions or energy production/consumption. For example,
only 5% of facilities accounted for 87% of reported emissions.
Figures 3.6, 3.7 and 3.8 show the majority of facilities fall below the facility emissions, energy
consumption or energy production thresholds. Table 3.2 shows just over 10% of reporters did not meet
a corporate group threshold (10% met a facility threshold only and 0.4% did not meet any threshold).
Further analysis conducted by the authority revealed these reporters accounted for less than 1% of all
facilities. Therefore more than 99% of reporting facilities are captured by at least a corporate group
threshold.

Total annual emissions reported

Total annual emissions reported

100 + 87% 100 + 5%

75 -100 2% 75 -100 1%
(kt CO₂-e)
(kt CO₂-e)

50 - 75 2% 50 - 75 2%

25 - 50 Facility emissions 25 - 50 Facility emissions

3% 4%
threshold (25 kt CO2-e) threshold (25 kt CO₂-e)

0 - 25 5% 0 - 25 88%

Percentage of total emissions reported Percentage of facilities

Figure 3.6 The percentage of emissions reported for various bands of total annual emissions reported at
the facility level (left) and the percentage of facilities in each band (right).
Total annual energy consumption
Total annual energy consumption

200 + 98.6% 200 + 15%

150 - 200 0.3% 150 - 200 3%

reported (TJ)

reported (TJ)

100 - 150 0.4% Facility energy consumption 100 - 150 4% Facility energy consumption
threshold (100 TJ) threshold (100 TJ)

50 - 100 0.4% 50 - 100 8%

0 - 50 0.4% 0 - 50 70%

Percentage of total energy consumption reported Percentage of facilities

Figure 3.7 The percentage of energy consumption reported for various bands of total annual energy
consumption reported at the facility level (left) and the percentage of facilities in each band (right).

Page | 39
 Total annual energy production
Total annual energy production
200 + 99.91% 200 + 7.1%

150 - 200 0.02% 150 - 200 0.4%

reported (TJ)
reported (TJ)

100 - 150 Facility energy production 100 - 150 Facility energy production
0.02% 0.7%
threshold (100 TJ) threshold (100 TJ)

50 - 100 0.03% 50 - 100 1.3%

0 - 50 0.02% 0 - 50 90.6%

Percentage of total energy production reported Percentage of facilities

Figure 3.8 The percentage of energy production reported for various bands of total annual energy
production reported at the facility level (left) and the percentage of facilities in each band (right).
Reporting thresholds and coverage of international reporting schemes
The coverage of international reporting schemes as a percentage of total economy-wide emissions
varies. This is in part due to the different levels and types of thresholds used by each scheme. For
example, some schemes use emissions and energy thresholds while others use thresholds based on
company size attributes (e.g. number of employees, turnover or total assets).
The varying levels of coverage are also due to the varying sectoral coverage across schemes and the
differing structure of economies. The coverage of Australia’s NGER scheme is comparable to other
international reporting schemes, as shown in Figure 3.3.
The United States Environmental Protection Agency (US EPA) estimates that its Greenhouse Gas
Reporting Program (US GHGRP) covers 85-90% of the United States’ total net emissions (US EPA, 2023).
Like the NGER scheme, which covers around 70% of Australia’s net emissions, the US GHGRP includes
all sectors except the agriculture and land use sectors. The US GHGRP includes reporting requirements
for both direct emitters (at the facility level) and upstream suppliers. The emissions reported by direct
emitters account for 50% of the United States’ total net emissions. Estimated emissions (from release,
oxidation or combustion of supplied products) reported by suppliers account for the remaining 35-40%
of the United States’ total emissions. This value is an approximation as it accounts for the double
counting between the emissions reported by suppliers (as scope 3 emissions) and the direct emissions
reported by facilities due to the combustion of fuels supplied.
In comparison, Canada’s Greenhouse Gas Reporting Program employs a facility level emissions
threshold on scope 1 emissions. This threshold was decreased from 50 kt CO2-e to 10 kt CO2-e in 2017
(Government of Canada, 2017), with a minimal increase in coverage of total greenhouse gas emissions
in Canada from 37% to 43% (Government of Canada, 2023a; Government of Canada, 2020).

Page | 40
 Coverage Company Threshold Facility Threshold

90 90

80 80

70 70
Total Emissions Covered (%)

Threshold (kt CO₂-e)

60 60

50 50

40 40

30 30

20 20

10 10

0 0
United California Singapore Republic Australia New Canada Mexico European
States of Korea Zealand Union
Figure 3.9 The total emissions covered (dark blue), facility-level reporting thresholds (light blue) and
corporate-level reporting thresholds (green) of various international reporting schemes. 11 Thresholds
may not be directly comparable due to differences in the scope of reporting requirements (see Appendix
B).

Potential benefits and impacts of lowering the reporting threshold

As the Australian economy decarbonises, some companies may fall below the emissions reporting
threshold, however the number of reporters with an obligation under the scheme is not expected to
significantly reduce due to the large percentage of reporters that meet an energy threshold. The
government could consider lowering the reporting thresholds to either maintain the current coverage
of the scheme if it is expected to reduce (possibly due to energy efficiency improvements) or increase
the proportion of each sector’s emissions reported under the scheme. Potential benefits of this
approach include:
• ensuring the scheme continues to meet its objectives
• maintaining and possibly increasing transparency of companies’ emissions

• improved awareness and management of energy and emissions by more companies

• increased share of emissions and energy reported for particular sectors

• increased coverage of businesses reporting could support emerging climate-related financial
disclosure reporting requirements.

11
Thresholds for the New Zealand and European Union schemes vary by sector.
Page | 41
However, the authority notes careful consideration needs to be given to the potential impacts of
lowering the reporting thresholds, such as:
• increased cost and regulatory burden to companies
• a detrimental effect on the integrity of the reported data (lowering the threshold will likely
affect small companies with less experience, existing expertise and resources for reporting)

• any increased administrative burden on the regulator.

Careful consideration must be given if any reporting threshold is lowered to ensure it results in a
material difference in the coverage of the scheme and the integrity of data reported is maintained.
The authority is of the view that the proportion of each sector's emissions currently reported under the
scheme is a more valuable point of reference than the proportion of Australia's total net emissions
reported under the scheme. Maintaining the proportion of each sector’s emissions reported under the
NGER scheme will be important in tracking the emissions reductions in each sector as they begin to
decarbonise.

Recommendation 1
The proportion of each sector’s emissions reported under the NGER scheme must, at a minimum, be
maintained at current levels.

3.2.2 Sectoral coverage

Agriculture and land
Emissions from Agriculture and Land Use, Land-Use Change and Forestry (land), as defined by the
UNFCCC, are currently excluded from NGER (Figure 3.1). By and large this means that most primary
producers, including agri-businesses, do not report emissions within the NGER scheme. There are cases
where primary producers that are also large energy consumers or manage significant agricultural waste
streams already report emissions within the scheme. In either case, emissions from the major sources
of emissions in agriculture, including from ruminant livestock and fertiliser use, and emissions from land
clearing are not required to be reported through the scheme.
The agriculture sector covers emissions from agricultural production and includes sources of emissions
such as enteric fermentation, fertiliser use, manure management, and rice cultivation. In 2020-21,
emissions from agriculture were estimated to be 78 Mt CO2-e. Emissions from enteric fermentation
(methane emitted from the rumen of ruminant livestock) represented approximately 70% of emissions
from the agriculture sector, or 12% of national emissions (DCCEEW, 2023a).
The land sector includes sources and sinks of carbon from vegetation and soils and covers greenhouse
gas emissions associated with land management practices that impact the carbon stored in vegetation
and soils, such as changes in land use from forest to cropland or grassland. Emissions and sinks from
land occur over vast areas and can be influenced not only by management of the land, but also
environmental conditions. The land sector removed more carbon dioxide from the atmosphere than it
released in 2022-23, resulting in net negative emissions of 64 Mt CO2-e, equivalent to removing 14% of
Australia’s national total (DCCEEW, 2023k).
Estimated coverage of agriculture and land sectors
Assessing the potential coverage of agriculture and land sector emissions is challenging because
detailed, good quality data on emissions from farming operations is not readily available. The
authority’s analysis of potential emissions coverage in the agriculture sector has relied on the best
available information, but it is necessarily incomplete and should be read as indicative. These

Page | 42
challenges highlight the limited access to robust data on emissions from agriculture and the land sector,
and the need to improve emissions data and transparency on activities and practices. Noting these
limitations, in the authority’s assessment the inclusion of emissions from agriculture within the NGER
scheme is likely to cover in the order of 5 to 10% of agricultural emissions, or approximately
4 to 8 Mt CO2-e.
The authority has derived approximate emissions factors from National Greenhouse Accounts data for
emissions from enteric methane, manure management and associated soil emissions. With these
emissions factors, approximately 15,000 head of cattle would be sufficient to exceed the NGER
scheme’s 25,000 t CO2-e facility publication threshold. Of the agri-businesses with these characteristics,
only some are operated as constitutional corporations, and it is only this subset which is required to
report under the NGER scheme. This limitation applies across all sectors included in the NGER scheme.
The majority of farms in Australia are operated as non-corporate structures. Agriculture businesses that
potentially meet the threshold for inclusion in the NGER scheme are likely to have turnover greater
than $1 million per annum in most years (ABARES, 2021), and would therefore be relatively well-placed
to establish and maintain inventory systems to report emissions.
Livestock emissions from feedlots with a capacity of greater than 11,000 head of cattle could also
exceed the facility threshold of 25,000 t CO2-e. Total emissions from cattle on feedlots were
approximately 2 Mt CO2-e in 2021 (DCCEEW, 2023b). Approximately 65% of cattle in feedlots are kept
in facilities with greater than 10,000 head of cattle (ALFA, 2023). Based on these figures, the inclusion
of agriculture in the NGER scheme could potentially capture about 1.3 Mt CO2-e per year arising from
feedlots. Whether or not feedlots are operated as constitutional corporations or using business
arrangements will affect these estimates. The authority notes the review process underway by the
department assessing scientific information for a potential update to this emissions factor due to report
in 2025.
The authority also considered whether the largest sized agri-businesses, those running cattle herds in
the order of 100,000 to 450,000 head across all their properties, would be captured by the NGER
corporate group threshold of 50,000 t CO2-e. Based on limited publicly available information,
conversations with stakeholders and authority analysis, companies which may reach this threshold
include: AACo, BBRC, Consolidated Pastoral Company, Crown Point Pastoral, Hancock Prospecting,
Heytesbury Pastoral Company, Australian Country Choice, Northern Australia Pastoral Company,
Paraway Pastoral, Stanbroke Beef (AACo, 2023; Hancock Prospecting, 2023; CPC, 2023; Beef Central,
2020; BBRC, 2023; Business News, n.d.; Stanbroke, 2023; Australian Country Choice, 2023;
Paraway Pastoral Company, n.d.; NAPCO, 2023). The total annual emissions from the pasture cattle
owned by the companies listed above, running cattle across Queensland, the Northern Territory,
Western Australia and South Australia would be approximately 4 Mt CO2-e, or 5% of emissions from the
Australian agriculture sector.
Growing need for emissions reporting in the agriculture and land sectors
There are strong drivers for introducing comparable coverage of emissions for the UNFCCC-defined
agriculture and land sectors under the NGER scheme. As Australia makes the transition to a net zero
economy, all sectors will need to contribute. Market and regulatory requirements for businesses to
report emissions are extending to the agriculture and land sectors (Box 1) and having facility-level
reporting could lead to better estimates and a greater level of confidence in the emissions reporting for
these sectors. Internationally, New Zealand (Motu, 2017), Germany (Climate Leadership Council, 2023),
Italy (Climate Leadership Council, 2023) and Mexico (ICAP, 2014; IETA, 2018) require reporting of
agricultural emissions under their national emissions reporting schemes.

Page | 43
Box 1: Market and supply-chain pressures for lower emissions agricultural products

Investors, financiers and supply-chains are increasingly seeking to manage their exposure to high-
emitting sectors, such as agriculture, by establishing schemes or mechanisms to meet their voluntary
commitments, mandatory disclosure and market requirements (DAFF, 2023; UNEP, 2021; SBTi, 2023).

As a result, it will become increasingly important for agri-businesses to understand their emissions to
respond to the need for information, remain competitive, maintain access to markets (DAFF, 2023) and
manage risks to their business.
Industry submissions to the authority’s Issues Paper highlighted the growing need to support farmers to
measure and report their emissions to meet industry-led emissions reduction commitments (Australian
Dairy Industry Council and Pork Australia submissions).
Agriculture is a significant industry for Australia, with a gross value of $92 billion in 2022-23 (ABARES,
2023a). Agriculture exports account for 72% of agriculture production, which exposes producers to
international reporting obligations (ABARES, 2023b).
Rural Research and Development Corporations allow the Australian government and primary producers
to co-invest in agreed priority areas of investment. To address the need for farm-level emissions data,
some private companies and Rural Research and Development Corporations are developing tools for
estimating and calculating on-farm emissions (MLA, 2023; MyFootprint, 2023; AIA, 2023).
The authority recommended in its 2023 annual progress report that the Australian government should
develop a program to support farmers to measure, reduce and disclose their emissions in line with an
established Government standard. In this review, the authority is recommending that new NGER
methods would provide that standard for companies and facilities that exceed NGER thresholds.

Companies with large industrial sector emissions are required to report emissions under the NGER
scheme. Introducing comparable reporting requirements for the agriculture and land sector would
provide the same regulatory support for and assurance of emissions estimates reported by businesses
for these sectors of the economy. This would also help the government to plan, prepare and provide
targeted support for actions to reduce these emissions, including supporting the government’s
proposed climate-related financial disclosure framework. Under this framework, businesses will be
required to report their scope 1, 2 and 3 emissions from all sectors, including agriculture and land
emissions (Section 3.1.6) (The Treasury, 2023).

Investors and banks told the authority that they need better information on emissions from agricultural
practices to support these reporting requirements. The Australian Sustainable Finance Institute (ASFI)
submission to this review noted the importance of reliable, transparent, and accessible corporate
emissions data and stated:

“Increasingly capital will not flow into areas where there is significant uncertainty
with respect to the quantification of climate-related risk. Excluding key sectors such
as agriculture and forestry from emissions reporting under NGERs will have significant
adverse impacts for the businesses in those sectors and the broader Australian
economy.”

ASFI submission to this review

The National Farmers Federation (NFF) submission to the Treasury on climate-related financial
disclosures expressed concern that new demands for data on agriculture emissions may lead to
individual farmers having to develop their own reporting frameworks to report the same information
Page | 44
through a range of different reporting mechanisms (NFF, 2023). Developing methods under the NGER
scheme, along with guidance, would provide a reporting standard to assist farmers to report their
emissions and harmonise reporting across the agricultural industry.

The extension of the NGER scheme to the agriculture and land sectors is consistent with the first object
of the NGER Act, as it would allow better informed government policy, a better-informed Australian
public and assist government programs and activities (NGER Act, 2007). It is also consistent with the
explanatory memorandum for the National Greenhouse and Energy Reporting Bill 2007, which states
that it was the intent of the scheme that agriculture emissions would be reported once appropriate
methodologies became available (NGER Bill 2007 Explanatory Memorandum, 2007). Methods for
calculating emissions from agriculture were not included in the scheme in 2007 because there were no
methodologies available for the agriculture sector at the time that would provide meaningful data at
the company level (NGER Bill 2007 Explanatory Memorandum, 2007). Workable methods for calculating
emissions at the farm level are now emerging and in the authority’s view these could form a starting
point for Method 1 equivalent estimation methods for NGER. The NGER methods should build upon
existing National Inventory methods and draw on industry tools that are found to be sufficiently robust.
As for other sectors, the methods should provide flexibility for businesses to report using the tier of
method that best suits their needs. The authority notes the ownership structure of firms will have
implications for the extent of coverage of the sector by the NGER scheme, as the scheme only applies
to constitutional corporations. The NGER scheme methods could also provide a voluntary standard to
be adopted to meet market demands outside the NGER scheme, by farmers and businesses that do not
meet NGER thresholds.

There is an important role for the government to regulate the standard to which these emissions
should be reported. The alternative, where companies decide upon and justify the methods they use to
meet corporate reporting requirements individually (including for climate disclosures), will incur a
private cost to the economy with associated complexities around the consistency, quality and integrity
of the adopted approaches.

The authority notes the concerns raised by a number of stakeholders about the poten�al for undue
burden that NGER farm-level repor�ng could introduce. This includes the cost, difficulty, and
uncertainty of data collec�on; and complexity of accoun�ng for on-farm prac�ces, condi�ons, and
business structure. The authority recognises that �me needs to be given for developing robust
calcula�ons for emissions accoun�ng on-farm as it is likely to be an involved and lengthy process.

Considering scope 1 and 2 emissions, expanding reporting of emissions to the agriculture and land
sector under the NGER scheme will likely cover a similar group of companies that will be covered by
climate-related financial disclosure requirements and, rather than lead to increased reporting costs for
businesses, it would provide certainty for businesses on methods that meet government requirements.
Companies should be supported to build the capacity and skills needed to report emissions consistent
with NGER reporting requirements.

The authority also recognises that extending coverage to the agriculture and land sectors may
introduce new reporting obligations for some corporations currently reporting industrial emissions, as
they would be expected to extend their reporting to scope 1 agriculture and land sector emissions and
removals. Where agriculture and land sector emissions are a low-level source for a business, a
simplified approach should be allowed, as is currently supported under the NGER scheme for other
sources of emissions (CER, 2023k).

Page | 45
The authority is aware significant challenges remain in the development of methods for reporting
emissions from the land sector. Methods for reporting carbon sequestration are available through the
ACCU scheme, but further work and time is required to develop an approach that is useable for the
purposes of the NGER scheme. Based on research and stakeholder consultation, the authority considers
a longer timeframe is needed for further refinement of these approaches. The authority is of the view
that reporting of agriculture and land emissions should be done separately (i.e. not allow covered
entities to report the net of agricultural and land emissions).

Design of a method for NGER coverage of the land sector will need to consider which emissions and
removals sources need to be included. An NGER method for the sector should at least cover changes in
forest cover, land clearing and forest regrowth.

Decisions will also need to be made on how to include the land sector as part of the NGER threshold. It
is the authority’s view that emissions from other sectors and emissions or removals from the land
sector should be reported separately and not be combined to report net emissions. The authority is of
the view that Australia needs to know more about the emissions and emissions trends of Australia’s
large primary producers. The use of a forest sink to lower emissions on a net basis to take a company
out of scheme participation would defeat this purpose.

Recommendation 2a
The NGER scheme be expanded to include methods for calculating emissions from the UNFCCC-
defined agriculture and land sectors. The government should work with interested parties in the
agriculture sector on the most appropriate way to include these emissions sources under the same
thresholds as for other sectors and develop robust estimation methods for facility-level emissions
reporting in these sectors.

Recommendation 2b
Introduce mandatory reporting requirements for agricultural sector emissions by the 2026-27
financial year and for land sector emissions by the 2027-28 financial year.

Based on publicly available information, some agri-businesses may run herds large enough to exceed
the 100,000 t CO2-e per year emissions threshold for coverage under the Safeguard Mechanism. This is
a result of the comparatively large land area and accompanying herd size of these agri-businesses. If
agricultural facilities do reach the threshold for Safeguard Mechanism coverage it is the authority’s
view that legislative amendments be put in place to ensure that Safeguard entities are not covered by
the Safeguard Mechanism at this time.

In its 2023 Annual Progress Report, the authority has recommended the government fund an extensive
challenge-based program of research and early-stage commercialisation of agriculture emissions
reduction technologies. The authority also recommended the government develop a program to
support farmers to measure, reduce and disclose their emissions in line with an established
government standard, provide advice on actions farmers can take to reduce emissions, and help them
to implement high priority actions. The authority will give further consideration to net zero technology
and emissions pathways in the agricultural sector in its sectoral pathways review commissioned by the
Parliament.

Page | 46
Whole-of-government reporting

The NGER scheme only applies to entities that are constitutional corporations. Government entities
that are not a constitutional corporation are not required to report (CER, 2022f). This means most
government operations do not have reporting requirements under the NGER scheme.

Coverage of government departments and agencies under the NGER scheme would increase
information currently available to the public and policy makers and improve accountability and
transparency. It would also provide a level of consistency in reporting across jurisdictions, and ensure
emissions are reported to a consistent standard by public sector entities across the country.

There is a move towards the voluntary reporting of emissions from government operations in Australia.
The Australian Government has set a target for net zero emissions by 2030 for the Australian Public
Service (DoF, 2023). The Department of Finance has developed a framework for public reporting of
emissions from all Commonwealth entities (DoF, 2023). Emissions will be reported in annual reports,
commencing for all Commonwealth entities in 2023 (DoF, 2023). The ACT (EPSD Directorate, 2022),
Queensland (State of Queensland, 2022), New South Wales (NSW Government, 2023), and Victoria
(DEECA, 2022) have publicly reported emissions from government operations and the authority
understands other states are in the process of investigating potential emissions reporting options.

Given many governments are moving towards more transparent reporting requirements, looking to
impose additional NGER reporting requirements would be premature at this stage. It is important,
however, that government emissions reporting is robust, transparent and consistent across
governments. A standard agreed by governments could provide assurance that reporting of
government emissions will be adequate and comparable.

Recommendation 3
Seek agreement with state and territory governments on a framework that will allow for consistent
reporting of emissions by government entities. In the absence of an agreed framework, the
government should explore the potential to extend coverage of the NGER scheme to government
entities.

Publicly owned landfills

Approximately 65% of total waste disposal activity in Australia is covered by the NGER scheme
(DCCEEW, 2022e). Waste management by landfill is becoming increasingly concentrated, and the 21
largest landfills account for approximately 50% of Australia’s waste disposal (DCCEEW, 2023a).

Publicly owned landfills, that is landfills owned by state and territory governments and local
government bodies, previously reported their emissions through the NGER scheme when the carbon
price was in effect. The Clean Energy Act 2011 expanded reporting requirements to include not-for-
profit entities that met the criteria for liable entities. This included landfills with annual emissions over
25,000 t CO2-e, or 10,000 t CO2-e for landfills located near a large landfill facility (Clean Energy Act 2011
s23; Clean Energy (Consequential Amendments) Bill 2023). This resulted in reporting requirements, and
at the time an emissions liability, for 27 councils (CCA, 2018). The legislation package that created the
carbon price was repealed in 2014.

Page | 47
Most publicly owned landfills are not constitutional corporations and do not report their emissions
through the NGER scheme. The authority has considered whether the reporting obligations under the
NGER scheme should apply to all waste facilities with annual emissions over 25,000 t CO2-e. This change
would provide more information on waste emissions and increasing equity in reporting between
private and public landfills. The authority does not propose that waste facilities with emissions below
this limit would be required to participate in the scheme as was the case under the Clean Energy Act
2011.

Expanding reporting requirements to publicly owned landfills would increase the reporting burden on
captured landfill owners, that are mostly local councils. This could impact smaller councils with fewer
resources, however, quantities of waste disposed to landfill are collected by state government agencies
(DCCEEW, 2023a), and the regulator has developed a solid waste calculator to assist with calculations
(CER, 2023l). Although local councils may need to build capacity to understand reporting requirements,
this could be eased by use of existing data and tools.

The constitutional basis for the NGER Act arises from the census and statistics power, corporations
power, external affairs power and the incidental power (Section 4, NGER Act). The authority notes that
legal advice would need to be sought to confirm the appropriate constitutional head of power before
extending reporting requirements to publicly owned landfills.

Recommendation 4
Extend NGER coverage to publicly owned landfills where legally possible.

3.2.3 Scope 3 emissions

The NGER scheme does not require entities to report their scope 3 emissions.
Scope 3 emissions are indirect emissions other than from electricity use generated from sources
upstream or downstream in the reporting facility’s value chain (Table 2.1). Scope 3 emissions include
emissions within supply chains that occur inside Australia. For example, the emissions associated with
mining bauxite and transporting the ore to an alumina refinery for alumina production are scope 3
emissions for the alumina refinery, and scope 1 emissions for the mining operation.
Scope 3 emissions also include emissions which occur upstream or downstream of production and can
include emissions outside of Australia, such as emissions from the combustion of Australian coal or
liquefied natural gas (LNG) exported to other countries.
At the aggregate level, potential direct downstream emissions from the combustion of fossil fuels
exported by Australia, coal and LNG, are up to 1,100 Mt CO2-e per year. 12 At the entity level the
emissions associated with the combustion of these fuels in other countries depends upon the nature
and efficiency of the power stations in which they are combusted. Information on where and when
these fuels are combusted, and the associated emissions, are not captured by the NGER scheme.
Determining and disclosing scope 3 emissions can help to meet the demands of consumers and
shareholders, help manage risks, such as transition risks, and identify opportunities to reduce emissions
in supply chains (CCA, 2021b; GHG Protocol, 2022; The Treasury, 2023). For these reasons the reporting
of scope 3 emissions is coming into focus for businesses because visibility of scope 3 emissions can
assist in identifying potential transition risks in supply chains (The Treasury, 2023).

12
Based on internal analysis using Resources and energy quarterly (REQ) June 2023 data for coal and LNG export
quantities in the year to March 2023.
Page | 48
Consultation for this review highlighted that inclusion of scope 3 emissions within the NGER scheme
would increase accountability and transparency of emissions generated beyond a facility, including
emissions from waste and burning of fossil fuels. A submission from the Australian Sustainable Finance
Institute recommended aligning NGER reporting with climate related financial reporting, including
scope 3 emissions.
The Australian government’s proposal on climate-related financial disclosures includes mandatory
reporting of scope 3 emissions, consistent with the International Sustainability Standards Board’s
standard on climate disclosures (ISSB, 2023; The Treasury, 2023). As requirements are implemented
over the next few years Australian companies will gain considerable understanding of the methods to
estimate scope 3 emissions, and the challenges and assumptions needed in making these calculations.
The data reported by entities through the NGER scheme on Australian greenhouse gas emissions are a
potentially valuable source of information for determining estimates of scope 3 emissions at the entity
level. These are the emissions that occur within Australia upstream of manufacturing and processing
facilities, for example, that feed into the productions of manufactured products like alumina,
aluminium and steel. The NGER system captures 68% of Australia’s emissions and includes data on
emissions within these domestic supply chains.
Using the NGER system to derive information about scope 3 emissions associated with domestic supply
chains, at the entity level, would require additional reporting of data through the scheme, such as
information about the quantity of materials sold or consumed by other NGER reporters.
A detailed data modelling exercise would help determine how effective such an approach would be for
understanding domestic scope 3 emissions at the entity level. This is a type of analysis that could be
undertaken over the coming years as scope 3 emissions reporting is introduced through climate-related
financial disclosures to formalise the data used to support these disclosures.
While the authority notes the importance of and interest in scope 3 emissions reporting, this topic was
not further investigated for the 2023 NGER review. However, the authority will pursue this topic
through its upcoming work program.

Recommendation 5
Undertake a study to investigate the use of the emissions data reported through the NGER scheme
to facilitate estimation of scope 3 emissions at the entity level in Australia.

3.3. Estimation Methods

The Measurement Determination describes the estimation methods, standards and criteria to be
applied by reporters when calculating their energy and emissions information. As a legislative
instrument under the NGER Act, the Measurement Determination is within the scope of the authority’s
review. The authority’s review has focused on two specific areas of the Measurement Determination:
fugitive methane emissions measurement and the emerging area of market-based reporting methods.
Chapter 4 presents the authority’s findings on methane measurement reporting and verification, and
this section explores market-based reporting methods.
3.3.1 Market-based methods for electricity
In June 2023, amendments were made to the NGER legislation to introduce optional, supplementary
reporting of market-based scope 2 emissions from consumption of electricity purchased or acquired
from an external (to the facility) network. This amendment allows NGER reporters to make unique
claims on the zero-emissions intensity attributable to some renewable electricity purchases and reflect
these in their scope 2 emissions reporting.

Page | 49
Eligible purchases include large-scale generation certificates (LGCs) from the Renewable Electricity
Target and GreenPower certificates (Chapter 7.4, Measurement Determination).
Previously reporters could only calculate their scope 2 emissions using the ‘location-based’ method
whereby for electricity consumed from the grid, reporters calculate their scope 2 emissions by
multiplying the quantity of electricity used by an emissions factor which reflects the average emissions
intensity of the local grid (the Measurement Determination incorporating amendments up to National
Greenhouse and Energy Reporting (Measurement) Amendment (2022 Update) Determination 2022).
Emissions factors are used at the state and territory level. Reporters must still report their location-
based scope 2 emissions but now also have the option to report on their market-based scope 2
emissions (DCCEEW, 2023l). This amendment took effect on 1 July 2023.
3.3.2 Market-based methods for renewable fuels
During the department’s 2023 consultation on NGER scheme updates, NGER scheme participants
requested an extension of the optional market-based reporting for scope 2 electricity emissions to
emissions associated with the use of liquid and gaseous renewable fuels (such as renewable diesel and
biomethane), where they are distributed via common infrastructure and consumed by multiple parties
(DCCEEW, 2023l).
Renewable fuels are fuels that can be manufactured using biogenic sources which absorb carbon
dioxide from the atmosphere as they grow, or through industrial processes powered by renewables or
other low-emission energy sources which utilise captured carbon dioxide in the industrial process (IEA,
2023b) (CSIRO, 2018). These are attributed a zero scope 1 emissions factor for carbon dioxide. For the
purposes of the NGER scheme, these fuels can only be considered on a scope 1 basis. Renewable fuels
produced through industrial processes are also referred to as synthetic fuels (IEA, 2021). Examples of
renewable fuels include biomethane, sustainable aviation fuel and biodiesel.
Through submissions made to the authority’s issues paper, the authority heard from a number of
stakeholders that current emissions accounting methodologies are not capturing renewable fuels
appropriately (Australian Institute of Petroleum, one anonymous submission) and that market-based
reporting or mass-balance accounting 13 for liquid and gaseous renewable fuels should be introduced
(Bioenergy Australia, Origin, EDL, bp Australia, one anonymous submission).
The need for market-based methods emerge when shared infrastructure is used to store or transport
low-emissions energy sources with incumbent fuels, or electricity. Currently, the reporting of emissions
from the combustion of fuel sourced from common infrastructure (for example a fuel storage tank or
natural gas pipeline) can only be done based on a location-based method. The Measurement
Determination does not allow NGER reporters that source their fuel from common infrastructure to
reflect the full emissions benefits of using renewable fuels that they have purchased and deposited in
the common infrastructure (DCCEEW, 2023l). Instead, they would only be attributed a part share of the
emissions reduction from the renewable fuels they purchased. Distribution from shared infrastructure
is common at airports, seaports and in gas networks.

13
Mass-balance accounting allows for tracking of mixed renewable and conventional fuel in systems and products
(DECC, 2014)
Page | 50
 Box 2: Reporting lower carbon fuels from common infrastructure under the current scheme
Consider for example, three airlines that must report their consumption of fuel that they have drawn
from common fuel storage infrastructure. If airline 1 adds renewable fuel to the common
infrastructure, the fuel drawn by the three airlines will be a blend of fossil and renewable fuels.
Airline 1 has two options to determine the amount of renewable fuel they physically consumed in
accordance with the blended liquid fuel provisions in section 2.67 of the NGER Measurement
Determination:
• Adopt the manufacturer’s determination of the composition of the blend. This is unlikely to
apply or be useful as the manufacturer won’t know the composition of the fuel being drawn
on from the storage infrastructure at the airport.

• Adopt the result of sampling and isotopic radiocarbon analysis of each batch of fuel
consumed. Fuel consumed would need to be analysed batch by batch given the likely
heterogenous blending of the renewable and conventional jet fuel as they are added to,
distributed, and drawn from through the system. This is unlikely to be cost effective,
particularly at low blend rates.

Under the existing NGER settings, the full emissions benefit of airline 1’s purchase cannot be
attributed to airline 1 in its reporting and it is unlikely that the full volume of renewable fuel
purchased and added to the common infrastructure would be reported across the three airlines.
Source: supplied by DCCEEW to the authority

Market-based reporting would allow for NGER reporters to make claims on the lower emissions
intensity attributable to renewable liquid and gaseous fuel purchases, even if the fuel they purchased is
distributed through common infrastructure and physically consumed by multiple entities. This is
particularly important for entities that need to demonstrate that they have reduced their emissions to
meet their obligations under the Safeguard Mechanism.
Effective market-based reporting needs to:
• avoid double counting
• ensure appropriate and accurate recognition of the impact of the use of renewable fuels on a
facility’s emissions and manage potential adverse impacts.
To avoid double counting, proof of purchases could be undertaken using mass or unit-based
certificates. For example, scope 2 renewable electricity claims are confirmed using eligible renewable
electricity certificates. Eligible renewable fuel certificates could be used to confirm renewable fuel
purchases, which would have the zero scope 1 carbon emissions factor applied under the NGER
scheme. Currently, there are no renewable fuel certificates recognised in the NGER scheme.
The need for certification schemes for renewable fuels was raised with the authority by stakeholders
(EDL, Grattan Institute, 2 anonymous submissions). In August 2023, GreenPower launched the
Renewable Gas Certification Pilot to certify biogas, biomethane and renewable hydrogen projects in
Australia for the creation of renewable gas certificates, called Renewable Gas Guarantee of Origin
(RGGO). This pilot scheme has been designed as an interim scheme to bridge the gap until a permanent
scheme is established (GreenPower, 2023). Currently there are no Australian renewable liquid fuel
certification schemes.
A framework to approve certification of renewable fuels (including lifecycle considerations) will be
important for ensuring appropriate and accurate recognition of the impact of the use of renewable
fuels on a facility’s emissions and manage potential adverse impacts. Renewable fuels do not always

Page | 51
result in lower emissions than the fossil fuel equivalent due to the lifecycle emissions of the renewable
fuel, for example, jet fuel produced from palm oil through a hydroprocessed esters and fatty acids
manufacturing pathway can have a similar emissions profile to conventional jet fuel (Becken, Mackey, &
Lee, 2023). Lifecycle emissions from renewable fuels can range from being more emissions intensive to
over 90% emissions reduction compared to fossil fuels (Figure 3.10). Food crops tend to have less
lifecycle emissions reductions than other feedstocks. Other adverse impacts from the production of
renewable liquid fuels can include environmentally damaging impacts on land, water, pesticide and
fertiliser use and can also impact food prices by diverting food products to fuel markets (Jeswani,
Chilvers, & Azapagic, 2020). A certification framework could set minimum benchmarks for lifecycle
emissions reductions for reporters to claim the zero scope 1 carbon emissions factor for renewable
fuels under NGER and manage social and environmental adverse impacts.

120
Percentage of emissions compared to fossil jet fuel

100

80

60

40

20

0
Agricultural residues (FT)
Forestry residues (FT)
Poplar (short rotation) (FT)
Miscanthus (FT)
Switchgrass (FT)
Tallow (HEFA)
Used cooking oil (HEFA)
Palm Fatty Acid Distillate (HEFA)
Corn oil (HEFA)
Soybean oil (HEFA)
Rapeseed oil (HEFA)
Palm oil (HEFA) >85% biogas treatment
Palm oil (HEFA) <85% biogas treatment
Brassica carinata oil (HEFA)
Camelina oil (HEFA)
Agricultural residues (AtJ)
Forestry residues (AtJ)
Sugarcane (AtJ)
Corn grain (AtJ)
Miscanthus (AtJ)
Switchgrass (AtJ)
Molasses (AtJ)
-20

Figure 3.10 A comparison of the lifecycle emissions of different combinations of feedstocks and
manufacturing pathways for renewable jet fuel compared to fossil jet fuel with the manufacturing
pathway shown in brackets.
Notes:
• Calculations included lifecycle assessments and indirect land use change (ILUC) calculations.
Lifecycle emissions are based on the International Civil Aviation Organization (ICAO) factors.
Feedstocks that are considered ‘waste products’ are assumed to not have upstream emissions.
• These are global lifecycle emissions, fuels produced in different countries can have vastly
different lifecycle emissions.
• FT= Fischer Tropsch manufacturing pathway, HEFA= hydroprocessed esters and fatty acids
manufacturing pathway and AtJ= Alcohol to Jet manufacturing pathway.
• Source: (Becken, Mackey, & Lee, 2023)

Page | 52
 Recommendation 6

Develop a framework to approve certifications that can guarantee the renewable status of
renewable liquid and gaseous fuels. This framework should be informed by a review of existing
international certification schemes. The certifications approved under the framework need to guard
against adverse impacts.

Recommendation 7

Introduce optional market-based reporting of renewable liquid and gaseous fuels once a framework
for approving certifications for renewable fuels is operational.

Renewable fuel definitions

The July 2023 amendments to the NGER Regulations included new definitions of ‘renewable diesel’ and
‘renewable aviation kerosene’ (Part 1, NGER Act).

renewable diesel means a biofuel that:

(a) is produced through a process such as gasification, FischerTropsch synthesis, hydrothermal
conversions or hydroprocessing; and
(b) consists mainly of alkane and other hydrocarbons; and
(c) is suitable for use as:
(i) a substitute for diesel oil; or
(ii) a blending component substitute for diesel oil.

renewable aviation kerosene means a biofuel that:

(a) is produced through a process such as gasification, Fischer‑Tropsch synthesis, hydrothermal
conversions or hydroprocessing; and
(b) consists mainly of alkanes and other hydrocarbons; and
(c) is either or both of the following:
(i) a synthetic blending component within the meaning of the American Society for Testing
and Materials Standard ASTM D7566: Standard Specification for Aviation Turbine Fuel
Containing Synthesized Hydrocarbons, published by ASTM International, as in force or
existing from time to time;
(ii) a synthetic blending component permitted in aviation turbine fuel that meets the
requirements set out in the United Kingdom Defence Standard Def Stan 91‑091: Turbine
Fuel, Kerosene Type, Jet A‑1; NATO CODE: F‑35; Joint Service Designation: AVTUR,
published by UK Defence Standardization, as in force or existing from time to time.
The current wording for this definition requires all renewable diesel and renewable aviation kerosene
to be biofuels and excludes synthetic renewable fuels produced from non-biological feedstocks.
Technology and plans are developing such that there is, or could soon be, the manufacture of synthetic
renewable fuels that have a short carbon cycle, such as fuels made from carbon drawn from the
atmosphere through direct air capture. 14

14
Existing direct air capture plant can capture 4,000 t CO2 per year (IEA, 2022), meeting the month-to-year
definition of the short carbon cycle.
Page | 53
The authority is of the view that the exclusion of synthetic renewable fuels 15 such as these, from the
renewable fuel definitions could result in emissions reporting that does not recognise the potential full
emissions benefit of these fuels, which could discourage investment in these emerging low emissions
technologies. The authority acknowledges that the emissions benefit of fuels based on carbon drawn
from the atmosphere through direct air capture will need to be assessed on a full life cycle basis and
will require certification of the emissions intensity of their manufacture.
The IPCC distinguishes biogenic fuels from fossil fuels by the time taken for their formation, which are
months-to-years for biogenic fuels (short carbon cycle), and millions of years for fossil fuels (long
carbon cycle) (IPCC, 2018). Due to the short carbon cycle of biogenic fuels, they are considered
renewable and assigned a zero carbon emissions factor (Schedule 1, Part 3, Measurement
Determination).
The authority acknowledges that there is currently a lack of guidance from the IPCC on how to account
for synthetic renewable fuels under National Greenhouse Gas Inventories. The authority is of the view
that the definition of renewable synthetic fuels needs to reflect their full emissions benefits.

Recommendation 8
Engage with the IPCC to create guidance on the definition and emissions factors of renewable
synthetic fuels. Subsequently amend the definition for renewable fuels in the NGER Regulations to
include renewable synthetic fuels once there is clear guidance from the IPCC.

3.4. Transparency
As noted in Chapter 2, only a limited amount of information reported under the NGER scheme is
published each year by the regulator.
For corporations that meet the publication threshold (50 kt CO2-e per year for combined scope 1 and 2
emissions for corporate groups), the regulator must publish: gross scope 1 emissions, gross scope 2
emissions and net energy consumption (Section 24, NGER Act).
The regulator is also required to publish:
• Scope 1 emissions, scope 2 emissions and energy consumption for Reporting Transfer
Certificate (RTC) holders that meet the relevant publication threshold (25 kt CO2-e of combined
scope 1 and 2 emissions, or 100 TJ of energy consumption or production)

• Scope 1 emissions, scope 2 emissions and electricity generation for all facilities in the electricity
sector (CER, 2023m)
• Scope 1 emissions, scope 1 emissions that were carbon dioxide, methane and nitrous oxide
(DCCEEW, 2023d), offset use and facility baselines for all facilities covered under the Safeguard
Mechanism (CER, 2023n). 16

15
Currently, there is not a universal definition of synthetic renewable fuels. Synthetic fuels are produced
artificially from renewable or non-renewable sources that resemble the characteristics of fossil-derived fuels (Ram
& Salkuti, 2023). The definition of ‘renewable’ consistent with the IPCC’s guidance for biogenic sources would
exclude fuels derived from fossil carbon.
16
The requirement to publish Safeguard facility emissions by gas type is under new subsection 24(3A) of the NGER
Act, which was added as part of the Safeguard reforms and applies for the 2023-24 financial year and following.
Page | 54
Under section 25 of the NGER Act registered corporations can apply to have all or part of their reported
emissions and energy data, with some exceptions, withheld from publication on the basis of
commercial value considerations (CER, 2022g).
For the reporting year 2021-22, only 417 of the 871 registered controlling corporations (CER, 2023o;
CER, 2023p) had their data published at the corporate group level (CER, 2023q). The corporations for
which data were published produced the vast majority of reported emissions, accounting for nearly
98% of the total emissions reported under the NGER scheme (CER, 2023p; CER, 2023e).
At the facility level, the regulator published 2021-22 data for 219 facilities under the Safeguard
Mechanism (CER, 2023d) and 561 designated electricity generation facilities (CER, 2023r). This data
published at the facility level accounted for 71% of the total emissions reported under the NGER
scheme. These facilities, for which emissions data is published, account for less than 10% of the
approximately 8500 facilities reported under the NGER scheme in 2021-22.
During the authority’s review there were a range of views expressed by stakeholders on the question of
whether more of the NGER dataset should be made available to the public, with some arguing for the
release of more information and others being of the view that the current balance between data
disclosure and confidentiality is appropriate. In the public survey conducted for this review, the
authority asked respondents how well the current publicly available data meets their data needs. The
majority of respondents said the current data published either does not or only partially meets their
data needs. The authority heard that high-quality, accessible, and transparent data could:
• allow organisations to better understand emissions and energy use across the Australian
economy more effectively, allowing for greater accountability and enhancing the utility of NGER
data in policy analysis and impact tracking
• improve community confidence in corporate emissions reporting and allow corporate
greenwashing to be more easily assessed (and consequently reducing the opportunities for it)
• support climate-related financial risk disclosures if published data is consistent with stakeholder
needs for reliable corporate emissions data
• better inform financial institutions’ lending and investment decisions and support customers’
confidence in the accuracy of corporate emissions
• support analysis on the opportunities for emissions reductions and allow for more transparent
benchmarking between facilities.

The authority is concerned that there is currently no facility level emissions or energy data published
for 90% of facilities reporting under the NGER scheme. The authority is also concerned that the
published data under the scheme does not include reliable time series data for corporate groups or
facilities, information relating to the estimation methods used or emissions by greenhouse gas (noting
that Safeguard facilities will be required to report by gas type in future).
The authority’s 2018 NGER Review identified the need to improve public access to NGER data and
called for increasing the amount of data reported publicly to better meet data users’ needs
(Recommendation 15) (CCA, 2018). Following this recommendation, the Australian Government
committed to progressively publish more useful key findings and trends based on data users’ needs and
priorities (Australian Government, 2019). However, the information published by the regulator since
the review has remained largely unchanged (CER, 2022h) due to limited resourcing and limited value in
the insights that can be published under the current data aggregation rules.

Page | 55
As momentum builds for Australia to meet its legislated climate targets, there will be an increasing
need for high-quality and transparent emissions data. The benefits of improving the transparency and
usefulness of the data reported under the NGER scheme include enhancing data analysis, increasing the
accountability of emitters, and better informing consumers, investors and other decision-makers.
The current publication threshold and aggregation of the published data were set at the
commencement of the scheme in 2007 based on concerns for disclosing commercially sensitive
information. However, the authority heard concerns that these provisions for commercial sensitivity
are misaligned with the shifting community expectations around the transparency of reported
emissions.
3.4.1 Comparison to international schemes

There is growing international recognition of the importance and value of transparent and accessible
emissions data, including at the entity and asset-level. This is reflected in emissions reporting schemes
such as those in Canada, the US and California publishing facility-level emissions by greenhouse gas.
Table 3.6 compares the different data published across international reporting schemes.
Emissions reporting Facility-level Emissions by Time-series Sector data
scheme emissions greenhouse data
data gas
Only for
Australia: National Greenhouse Only for
Safeguard and
and Energy Reporting (NGER) Safeguard
electricity-
Scheme facilities
sector facilities

United States: Greenhouse Gas

Reporting Program (GHGRP) (US
EPA, 2022a)

Canada: Greenhouse Gas

Reporting Program (GHGRP)
(Government of Canada, 2023b)

California: Mandatory
Greenhouse Gas Reporting
Regulation (MRR) (CARB, 2022)

Table 3.3 Comparison of different data published under international reporting schemes.

Page | 56
BOX 3.3: Data published under the United States’ Greenhouse Gas Reporting Program

Under the United States' Greenhouse Gas Reporting Program (GHGRP) data is reported from both
direct emitters and upstream suppliers. The data collected under the program is made publicly
available each year unless the data qualifies for confidential treatment (US EPA, 2023).

The facility-level data published includes information such as (US EPA, 2022b):

• Address, coordinates, ID number and industry classification of the facility

• Emissions by greenhouse gas
• Emissions by source/process
• Emissions per year since 2010
• Fuel type
• Measurement methods used
• Report submitted by the facility
The reported data are made available to the public each year through resources such as interactive
tools, profiles and fact sheets on specific topics of interest to help the public use and derive value
from the greenhouse gas reporting data. The published data products include (US EPA, 2022a):
1. Facility Level Information on GreenHouse gases Tool (FLIGHT): An interactive website with
mapping features to search the data for individual facilities by name or location, or filter the
data by state or county, fuel type, industry sectors and sub-sectors, annual facility emission
thresholds, and greenhouse gas type. It also allows comparison of emission trends over time,
data to be viewed in several formats including maps, tables, charts and graphs, and any data
set generated using filters to be downloaded.
2. National Data Highlights: Interactive data visualisations of reported greenhouse gas
emissions showing trends by sector, gas, location, and facility emission ranges.
3. Yearly Overview Profile: Annual report of data collected by GHGRP containing an overview of
the data, including emissions trends by industry, state and gas, the number of reporters
whose emissions fall above and below certain threshold values, and descriptions of
monitoring methods used.
4. Sector Data Highlights and Profiles: Data highlights for each sector, analyses of the
industries that report under the GHGRP program including estimates of GHGRP coverage,
emissions trends (including discussion), emissions by state, gas, and process, the number of
reporters whose emissions fall above and below certain threshold values, and monitoring
methods used.
5. Envirofacts: Provides all publicly available data collected by the GHGRP in a searchable,
downloadable format by facilities. This includes GHG data and much of the underlying data
facilities use to determine greenhouse gas values and other reported data.
6. State and Tribal Fact Sheet: Interactive fact sheet summarising GHGRP emissions by state,
tribal lands, or EPA region for the current year.
7. Data Frequently Requested: Data sets readily available for download.

Page | 57
3.4.2 Options to improve transparency under the NGER scheme
The authority is of the view that increasing the transparency of the data collected under the NGER
scheme is essential to ensure it remains aligned with the expectations of the public and the standards
set internationally. In the public survey conducted for this review, the authority asked respondents
what changes they would recommend to government in relation to the current content of the publicly
available data. Over 80% of respondents recommended some change, such as publishing data at the
facility level, emissions by greenhouse gas, information on estimation methods used or data as a
consistent time-series. Some respondents suggested the usefulness of the data would be improved if it
was published in a more accessible format, or it included additional information such as sector, fuel
type, emissions source and the uncertainty of the reported emissions.
Feedback from state and territory government users of NGER data on the accessibility of the data was
mixed. Some noted that accessibility was adequate, while others noted issues such as the restrictive
nature of the data protection and confidentiality provisions, the lack of time-series consistent datasets
and the need to perform cleansing activities on the datasets provided.
Here the authority considers several different opportunities to improve the transparency and
usefulness of the published data.
Publishing emissions data by source and type at the facility level
Publishing scope 1 emissions data by greenhouse gas (e.g. carbon dioxide, methane and nitrous oxide)
at the facility level would bring the published NGER data in line with the subset to be published for the
Safeguard Mechanism. Such an approach would also bring Australia in line with the much more
comprehensive emissions datasets published for comparable international reporting schemes in
jurisdictions such as Canada and the US. Additionally, it would consolidate all publicly available facility-
level data into a single dataset.
The authority heard from stakeholders during the public consultation that publishing emissions data at
the facility level would allow for greater accountability and improve the community and scientific value
of the NGER data, enhancing its utility in policy analysis and impact tracking. The authority also noted
that reporting emissions by greenhouse gas could highlight opportunities to reduce emissions, and
reporting on emissions (and mitigation efforts) should be clear, transparent, and publicly accessible.
With these goals in mind, the authority was also mindful that the distribution of emissions reported by
each facility is heavily skewed. In 2021-22, approximately 43% of facilities reported total scope 1 and 2
emissions of only 0.5 kt CO2-e or less. An appropriate facility-level publication threshold could be
considered to limit the administrative burden for the regulator while still improving transparency and
granularity of the data published. Table 3.7 outlines the number of facilities that would exceed a range
of potential facility-level publication thresholds of combined facility-level scope 1 and 2 emissions.

Page | 58
 Examples of possible Number of facilities Total reported
facility-level publication above publication emissions covered
thresholds (kt CO2-e) threshold (approx.) (%)

25 1000 95

10 1700 98

5 2400 99

0 8500 100

Table 3.4 The number of facilities that would exceed a range of potential facility-level publication
thresholds (combined scope 1 and 2) and the proportion of emissions covered.
Publishing time-series data
For the facility-level data that is currently published (Safeguard and electricity generation facilities), the
lack of unique identifier for each facility hinders the ability to link facilities on a year-to-year basis. This
lack of robust time series data makes comparisons between years very time consuming and in many
cases not possible for members of the public who don’t have access to specific information such as the
name of a former owner of a facility. Publishing time series data at the facility level would allow better
tracking of emissions reductions over time and would bring the NGER scheme in line with comparable
international schemes such as Canada and the US.
Information on estimation methods
There is no information published relating to the estimation methods used by reporters to calculate
their emissions. In the reporting year 2021-2022, the simplest estimation method (Method 1) was used
in more than 80% of the activities that reported emissions of a greenhouse gas, accounting for 36% of
reported scope 1 emissions. Public reporting of the estimation methods used may increase the
accountability for how reporters are measuring their emissions. The authority found the lack of public
reporting of the estimation methods used by companies may reduce incentives to move to higher order
reporting methods.
Presentation and accessibility of published data
One of the objectives of the NGER scheme is to inform government policy formulation and the
Australian public. The authority noted the usefulness and accessibility of both the publicly published
data set and more detailed data set (for use by governments under strict confidentiality conditions)
could be improved by publishing the relevant dataset through an application programming interface
(API) so that users can download and programmatically query the data using their own software. 17

Other supporting materials that would support the transparency of the NGER data include interactive
maps and graphing functions. Reporting schemes for Canada, the US and California present facility data
through an interactive mapping tool with features to filter data by criteria such as facility type, location,
name, industry and emissions by greenhouse gas (CARB, 2022; US EPA, 2022a; Government of Canada,
2023a).

17
Through the use of an application programming interface (API) users can download and use their own software
to query the NGER data set. The department makes the national inventory data available in this way which allows
users to programmatically query data using Open Data Protocol v4.
Page | 59
The US Greenhouse Gas Reporting Program also produces other resources such as interactive data
profiles and tools on specific topics of interest to help the public use and derive value from the
greenhouse gas reporting data.

Recommendation 9
As a first step in increasing the transparency of NGER data, the NGER scheme requires that the
regulator publish, starting with data for the 2023-24 financial year, the following data at the facility
level for facilities which produce annual emissions greater than or equal to 5,000 t CO2-e:

• Scope 1 emissions by greenhouse gas as a consistent time-series.

• Scope 2 emissions as a consistent time-series.

• The method used in each financial year to estimate scope 1 and scope 2 emissions.

Recommendation 10
Resource the regulator to publish relevant NGER datasets through an application programming
interface (API) so that users can download and programmatically query the data using their own
software. This should be implemented for the publication of the 2024-25 NGER data.

Recommendation 11
Resource the regulator to improve the accessibility and usefulness of the published data by exploring
opportunities to present data in additional formats on its website. This should be implemented for
the publication of the 2024-25 NGER data.

Recommendation 12
Resource the regulator to collect the necessary information from reporters such that it can link
facilities reported under the NGER scheme across time.

3.5. Confidentiality
Each year, the regulator publishes a subset of the data it collects under the NGER legislation. Under
section 25 of the NGER Act, corporations can request parts, or all of this data, with some exceptions, be
withheld from publication on the basis of commercial value considerations (Box 3.4). The exceptions
are defined in subsection 25(5). This subsection states that section 25 does not apply to the emissions
and energy production data for designated generation facilities—the regulator must publish these data.
As a result of the recent amendments to the NGER Act, the regulator will be required to publish an
expanded set of data relating to emissions from Safeguard facilities. 18 These new data are also not
subject to applications under section 25.

See subsection 24(3A) of the NGER Act which was inserted by the Safeguard Mechanism (Crediting)
18

Amendment Act 2023.

Page | 60
 Box 3.4: section 25 of the NGER Act
25 Requests for information not to be published
(1) A registered corporation, a person required to provide a report under section 22G, 22X or
22XB, or a person required to provide information under section 20, may apply to the
Regulator requesting information not be published if the information reveals, or could be
capable of revealing:
(a) trade secrets; or
(b) any other matter having a commercial value that would be, or could reasonably be
expected to be, destroyed or diminished if the information were disclosed;
(c) about a specific facility, technology or corporate initiative relating to the corporation
or the person.
(2) The application must:
(a) identify the corporation or the person; and
(b) identify the information that is requested not to be published; and
(c) be given in the manner and form approved by the Regulator.
(3) The Regulator may accept the application and not publish the information if he or she is
satisfied that the information would reveal, or would be capable of revealing, information of
a kind specified in subsection (1).
(4) The Regulator must notify an applicant, in writing, of a decision to accept or refuse an
application under this section.
(5) This section does not apply to information required to be published under subsection
24(1AF), (3A) or (3B).

Currently, corporations do not frequently seek to utilise this confidentiality process. Over the past 10
years, only 30 applications have been received by the regulator under section 25 (CER pers. comm.).
Of these applications:
• 5 applications have been accepted and the data withheld from publication. These applications
were assessed between the years 2010-11 – 2012-13 — with none accepted since that time.
• 10 applications have been refused.

• 15 applications have been withdrawn. 19

In deciding whether to accept or refuse an application under the test in subsection 25(1), the regulator
assesses whether the information that the applicant is requesting to be withheld has commercial value
that would be, or could be expected to be, impacted by publication.
The regulator has told the authority that processing applications under section 25 is resource intensive
for both the regulator and the applicant. Applications can be complex and may require numerous

19
An applicant can withdraw an application at any time before the regulator makes the final decision. The
majority of applications have been withdrawn because the regulator has confirmed that the information the
corporation was applying to have withheld was not information the regulator was required to publish (CER pers.
comms).
Page | 61
engagements with applicants in order to obtain relevant information and ensure procedural fairness.
They can, therefore, take a considerable amount of time to process. For example, a recent application
took over one year to process and reach a decision (CER, 2023s; Hendry, 2022).
As applications under section 25 are infrequent, and the majority of these are not approved, the
authority used this review to consider whether section 25 should remain in the NGER Act — that is,
should corporations retain the ability to have this kind of information withheld from publication?
Many responses to the authority’s public survey conducted for this review supported publication of
reported information with some limited and specific situations in which information would not be
published, while others supported the removal of section 25. Respondents who supported retention of
the exemption mechanism pointed to the need to protect commercially valuable information and
information relating to new technologies. Several respondents stated that there was a stronger case for
publication of emissions data while retaining some level of protection against disclosure of
commercially sensitive energy consumption and production data.
The authority understands the views of many people that data relating to emissions and energy should
be public knowledge (see previous section on Transparency and associated recommendation).
Ultimately, the authority came to the view that section 25 should be retained. The authority’s view is
that based on current circumstances it is appropriate for sensitive data to continue to be withheld from
publication in specific, limited, circumstances, i.e. when publication would be likely to cause
unacceptable commercial damage.
Relevantly, the test in subsection 25(1) is cast in the same terms as the general protection against
disclosure of this type of information under section 47 of the Freedom of Information Act 1982 (FOI
Act). Section 47 of the FOI Act provides that documents are exempt from release if they would reveal
trade secrets or any other information that has commercial value which would be, or could be expected
to be, destroyed or diminished by disclosure. The authority has not identified a clear reason why the
limited class of information that currently falls within the scope of section 25 of the NGER Act should
not receive similar protection.
The authority also observed that there is no current indication that the section 25 mechanism is being
over-used in a way that materially impacts general transparency of relevant emissions data.
The authority noted, however, that the level of use of the section 25 mechanism may change in the
future. For example, if the government accepts the authority’s recommendation to publish more
facility-level data for NGER facilities generally (see above), this could significantly increase the situations
in which information that is viewed by corporations as commercially sensitive is in scope for
publication. This may, in turn, cause an upsurge in section 25 applications to the regulator. Accordingly,
the authority recommends that the government maintains a watching brief over the level of utilisation
of the section 25 mechanism, with a view to revisiting its appropriateness and scope in the event that
its existence undermines the overall effectiveness of the publication regime. At that time, it may be
appropriate to import into the provision an additional public interest test that would need to be
satisfied before an application is approved. Any upsurge in applications may also necessitate
consideration of the regulator’s resourcing available for processing.
Although the authority recommends retention of the section 25 mechanism, based on the regulator’s
experience with applications to date the authority considers that opportunities for improving the
process should be examined, to ensure it is efficient and results in timely resolution of applications.
Measures to achieve this may require legislative amendment.

Page | 62
Specifically, further consideration should be given to providing greater clarity on how to determine
whether information has commercial value and how that value may be diminished or destroyed.
Presently applicants and decision-makers have the benefit of non-binding guidance issued by the
regulator (CER, n.d., b). Some guidance on the application of the relevant tests may also be drawn from
the FOI context. Overall, this provides limited certainty for both the regulator and applicants.
Therefore, there may be benefit, particularly in the event of an increase in applications, in providing for
legislatively-recognised guidelines for the application of relevant tests. 20 In the public survey conducted
for this review over half the respondents who expressed a view about the adequacy of the test in
section 25 supported more clearly defining the characteristics of data that has commercial value. Many
of these responses came from corporations that report under the NGER scheme. Numerous individuals
and organisations who expressed support for increased transparency over emissions also supported
greater clarity in the test for non-publication.
Consideration should also be given to whether the section 25 application and decision-making process
can be streamlined in order to reduce the administrative burden on the regulator and improve
timeframes. The legislation could specify, or allow for subordinate rules to prescribe, additional process
matters such as content requirements, and processes and timeframes for the provision of
supplementary information by applicants.
Finally, consideration should be given to requiring that section 25 applications must be made for a
specific period or reporting year. At the moment, applications do not have to specify a timeframe for
non-publication, meaning that if the regulator approves the application the information in question is
withheld from publication indefinitely. Given that section 25 provides an exception to the general
expectation that data should be published, it seems appropriate that the duration of protection should
be time-limited, so it is revisited periodically.

Recommendation 13
Monitor the future utilisation of section 25 of the NGER Act and whether it is impacting upon the
overall effectiveness of the publication regime in section 24 of the Act.

Recommendation 14
Consider measures to provide additional guidance and streamline the process for making and
deciding non-publication applications under section 25 of the NGER Act, including through legislative
amendment if needed.

20
For an example of guidelines of this kind, see the Information Commissioner’s guidelines issued under section
93A of the FOI Act.
Page | 63
Page | 64
4. Fugitive methane measurement, reporting and verification
Methane has a much shorter lifetime in the atmosphere than carbon dioxide — with a mean lifetime of
11.8 years compared to centuries — but has a significantly higher short-term global warming potential
than carbon dioxide (IPCC, 2021; CSIRO, 2022). Due to these two features, immediate and major
reductions in methane emissions, together with stringent carbon dioxide mitigation, will have near-
term effects on the climate in the next few decades (IPCC, 2022).
Accuracy of reported emissions is crucial for identifying mitigation opportunities and for tracking
progress in emissions reduction.

In Australia, methane comprises 24% of national emissions (Figure 4.1). 21 The largest sources of
methane emissions are agriculture, fugitive emissions associated with coal and gas production, waste,
and Land Use, Land-Use Change and Forestry (LULUCF). A significant majority of Australia’s fugitive
emissions (86%) are reported under the NGER scheme (see Table 2.2).

2%
4%
Agriculture
Carbon dioxide
24%
Fugitive emissions
Methane 11%
69% 24% Waste
Nitrous oxide 52% 10%
LULUCF
Other 1%
Stationary energy

Figure 4.1 The total greenhouse gases reported for the year to March 2023 in the Quarterly Update of
Australia’s National Greenhouse Gas Inventory: March 2023 and the sectoral breakdown of Australia’s
national methane emissions (DCCEEW, 2023k). *Stationary energy emissions exclude electricity.
Research teams around the world are using satellites to observe methane plumes near the earth’s
surface. Over the past five years developments in satellite technologies and inverse modelling, the
technique used to trace a plume back to a source and make an estimate of the rate of emissions, has
resulted in new sources of data to estimate facility level emissions (RMI, 2023).
A study published in 2021 by researchers at the Netherlands Institute for Space Research
(Sadavarte, et al., 2021) made conclusions that emissions may be under-reported at Australian facilities.
The conclusions of Sadavarte et al. (2021) have fed into other reports such as the International Energy
Agency’s Global Methane Tracker which makes claims that fugitive methane emissions are under-
reported across coal and oil and gas producing facilities in Australia (IEA, 2023c).
With the general concern about the accuracy of reported fugitive emissions growing, the Minister for
Climate Change and Energy wrote to the Chair of the Climate Change Authority in relation to the
authority’s review of the NGER legislation in 2023. In this correspondence the Minister drew attention
to the recent reforms to the Safeguard Mechanism, and the increasing importance these changes place
on the accuracy of emissions reported under the NGER scheme. The Minister suggested that the
authority may wish to consider whether updates to the NGER methane emissions measurement,
reporting and verification (MRV) rules are required. The letter noted the work of the Metcoal Methane

Australia commenced reporting its national greenhouse gas inventory using IPCC Fifth Assessment Report (AR5)
21

GWP100 in May 2021 (DCCEEW, 2021).

Page | 65
Partnership and the Oil and Gas Methane Partnership 2.0 and suggested the authority may like to
consider whether mandatory requirements for source-site reconciliation and direct measurement of
emissions are practicable at this time. The Minister noted observations and recommendations on the
benefits and costs of possible changes would be of assistance.
This chapter examines the reporting of fugitive methane emissions in Australia through the NGER
scheme, the questions around the accuracy of that reporting and the options to address those
questions through the NGER scheme, where the authority considers necessary.
4.1. Fugitive methane emissions in Australia

Fugitive emissions are defined by the IPCC as the ‘intentional or unintentional release of greenhouse
gasses that occur during the extraction, processing and delivery of fossil fuels to the point of final use’
(IPCC, 2019b).

Fugitive emissions constitute around a quarter of Australia’s reported methane emissions and
accounted for 11% of Australia’s total emissions in 2022 (Figure 4.1 & Table 4.1) (DCCEEW, 2023k;
DCCEEW, 2023a). Coal and ‘oil and gas’ production are the source of all of fugitive emissions in Australia
accounting for 57% and 43% of Australia’s fugitive emissions, respectively (see Table 4.1). While
methane emissions from landfill and wastewater treatment may also be viewed as other sources of
fugitive methane emissions, the IPCC definition is specific to emissions stemming from the energy
sector.
In Australia, the composition of fugitive emissions is approximately 70% methane, with the remainder
made up mostly of carbon dioxide (DCCEEW, 2023k). Fugitive emissions can vary depending on the
facility setup, basin characteristics, activity stage, and activity type. For example, in coal mining, there
can be wide variations in both the gas content and the composition of the gas across Australian coal
basins, which are also impacted by whether a mine is on the surface or underground. In oil and gas
operations, there can be significant variances in the geological characteristics of the oil or gas basin,
and fugitive emissions compositions are dependent on how processed the product is and which activity
is occurring. Flaring — the combustion of fugitive emissions — changes the composition of fugitive
emissions, converting most of the methane into carbon dioxide (NSW EPA, 2015). Venting is the
disposal of emissions by release to the atmosphere either intentionally or unintentionally.

Page | 66
 Proportion of Proportion of
Fugitive emissions
Sector Australia’s fugitive Australia’s total
(Mt CO₂-e)
emissions (%) emissions (%)
Underground mines 17.4 36 3.8
Coal Surface mining 9.3 19 57 2.0 6.0
Other, incl. flaring 1.1 2.4 0.2
Oil 0.1 0.3 0.03

Oil & Natural gas 5.7 12 1.2

43 4.5
gas Venting 9.8 20 2.1
Flaring 5.3 11 1.1
Total Fugitive emissions 48.8 100 10.5
Table 4.1 Fugitive emissions reported in the 2021 National Inventory, by sector and source (DCCEEW,
2023m). Total national emissions reported for this year, 2020-21, was 465 Mt CO2-e.

4.2. Reporting of fugitive methane emissions in the NGER scheme

The nature of fugitive emissions from coal, oil and gas operations are different, and this affects how
these emissions can be measured. While fugitive emissions from oil and gas operations are generally
highly concentrated, fugitive emissions from open cut coal operations tend to be more diffuse once
mining has commenced. Due to this variability there are different methods available to measure or
estimate emissions for activities across these sectors.
The National Greenhouse and Energy Reporting (Measurement) Determination 2008 (Measurement
Determination) outlines the methods for calculating emissions for the NGER scheme. An overview of
these methods is included in Table 2.4. There are four general methods available to reporters, with
methods increasing in complexity from Method 1 to Method 4. Method 1 uses a default multiplier
referred to as an emissions factor. Methods 2 and 3 can require sampling to estimate emissions for an
activity, or have an emissions factor applied to each piece of equipment or component, and Method 4
requires direct measurement of emissions on either a continuous or periodic basis.
Reporters are given a choice of methods they may use to estimate emissions, however not all methods
are available for estimating emissions from all sources. Method availability depends on the sector and
the activity, and the technologies available for measurement or estimation (Chapter 3, Measurement
Determination). An overview of the methods available for reporting fugitive emissions is included at
Appendix D. Methods are updated annually by the Department of Climate Change, Energy, the
Environment and Water (the department) (CER, 2023t; DCCEEW, 2022b). Recent updates to methods
for estimating fugitive emissions include:
• going beyond international reporting requirements by splitting natural gas production and
processing into separate source types
• the addition of new sources for natural gas storage, natural gas liquefaction, storage and
transfer, and produced water
• introduction of methods reflecting the latest available research, including results of Leak
Detection and Repair (LDAR) programs
• increasing the Method 1 emissions factor for open cut coal mining in Queensland from 0.023 to
0.031 CO₂-e per tonne of run-of-mine coal extracted, incorporating updated data sources.

Page | 67
4.2.1 Coal mining methods under the NGER scheme
In the Measurement Determination, fugitive methane emissions from coal mining are split into a small
number of activities — 4 for underground mining and 3 for open cut mining (Chapter 3, Part 3.2,
Measurement Determination). In both types of mining, the extraction of coal activity is responsible for
the largest portion of fugitive emissions (DCCEEW, 2023a).
Coal mining activities, other than coal extraction, that are included in the Measurement Determination
for reporting fugitive methane emissions include:
• pre-mining venting, where emissions are released prior to the commencement of mining
• flaring of coal mine waste gas
• post-mining activities that include the processing of coal from gassy underground mines.
To estimate fugitive emissions associated with coal extraction in underground coal mines, the
Measurement Determination limits the choice of method to Method 4. To implement Method 4 in an
underground coal mining setting, sensors are installed to monitor the composition and flow rates of gas
venting from the mine shaft (DCCEEW, 2023a).
The Measurement Determination allows for the use of a range of methods for estimating fugitive
emissions from underground coal mining activities other than coal extraction:

• Method 1 is available for processing of coal, reported as post mining activities

• Methods 1-2 are available for estimating methane emissions from flaring of coal mine waste
gas
• Method 4 is available for pre-mining venting or flaring emissions.
In open cut coal mining, methane is released to the atmosphere from the exposed portions of the coal
seams which creates a diffuse source of emissions. The Measurement Determination makes Methods 1-
3 available for reporting these emissions. Methane emissions from flared coal mine waste gas can be
reported using Method 1, and pre-mining venting emissions must be reported using Method 4 only.
Decommissioned underground coal mines are also split into 2 activities for fugitive methane:
• Methane for decommissioned mines, where gas continues to be released from the mine after
mining concludes, for which Method 1 and 4 are available.
• Flaring of coal mine waste gas, for which Method 1 is available.
4.2.2 Oil and gas methods under the NGER scheme
Methods for estimating fugitive methane emissions from oil and gas operations are categorised into a
large number of specific activities in the Measurement Determination (Chapter 3, Part 3.3,
Measurement Determination). These activities and available methods are summarised in Figure 4.2,
and covered in more detail in Appendix D. The activities for which emissions are reported typically fall
under three broad categories:

• leakage, or the unintended release of emissions

• venting, where emissions are disposed by release to the atmosphere either intentionally or
unintentionally
• flaring, where methane is disposed of by combustion, converting it to carbon dioxide.

Page | 68
 Activity Emissions source Methods Activity Emissions source Methods Activity Emissions source Methods

Venting/leakage 1, 4 Onshore Leakage 1, 2, 3 Leakage 1, 2

Oil or gas Produced
natural gas
exploration water
production
Flaring 1, 2A

Leakage 1, 2, 3 Offshore Leakage 1, 2, 3 Venting/leakage 1, 2, 3

Natural gas
natural gas
transmission
Crude oil production
Venting 1, 4 Flaring 1, 2A
production

Flaring 1, 2A Venting 1, 4 Leakage 1, 2, 3

Natural gas
production Natural gas
Venting/leakage 1, 2 Flaring 1, 2A Venting 1
storage
Crude oil
transport
Leakage 1, 2, 3 Flaring 1, 2A
Natural gas
gathering
Venting 1 Leakage 1, 2, 3
Leakage 1, 2, 3 and Natural gas
boosting liquification,
Crude oil Flaring 1, 2A Venting 1
Venting 1, 4 storage and
refining
transfer
Leakage 1, 2, 3 Flaring 1, 2A
Flaring 1, 2A

Natural gas
Venting 1 Leakage 1, 2, 3
processing Natural gas
distribution
Flaring 1, 2A Flaring 1, 2A

Figure 4.2 Summary of method availability for reporting oil and gas fugitive methane emissions under
the NGER Measurement Determination (Chapter 3, Part 3.3, Measurement Determination).
For oil and gas sources, Method 1 frequently applies the emissions factor to throughput of oil or gas
through the segment (Explanatory Statement, National Greenhouse and Energy Reporting
(Measurement) Amendment (2021 Update) Determination 2021). Methods 2 and 3 typically apply
emissions factors to each piece of equipment or component for leak emissions sources, or sampling of
the gas composition for flaring emissions sources, while Method 4 requires direct measurement or
engineering calculation approaches.
Reporters must use the same method for a group of several defined activities if these activities are
within the facility boundary (Chapter 3, Part 3.3, Measurement Determination). These include
emissions reported for leakage from onshore natural gas production, offshore natural gas production,
natural gas processing, natural gas gathering and boosting, natural gas storage, and natural gas
liquefaction, storage and transfer.
Results of LDAR programs 22 can be reflected in emissions reported under the NGER scheme if they are
made using appropriate requirements and standards. Reporters can apply a lower, ‘no-leak’ emissions
factor for relevant equipment components for a number of estimated sources of leakages (Chapter 3,
Part 3.3, Measurement Determination).

22
LDAR programs routinely monitor equipment to identify leaks for repair.
Page | 69
4.3. Remote sensing technologies put a focus on Australia’s fugitive methane emissions
Remote sensing technologies, ranging from satellites to on the ground sensors, are being deployed by
researchers around the world to quantify facility-level methane emissions from the top-down. Some
studies using these technologies have concluded that methane emissions may have been
underestimated at some Australian facilities using traditional bottom-up approaches for estimating
fugitive methane emissions (Sadavarte, et al., 2021; Palmer, et al., 2021).
4.3.1 Research into the use of remote sensing technologies for the estimation of greenhouse gas
emissions
Satellites have been used to detect and estimate concentrations of greenhouse gases from orbit for
some time, with the first satellite dedicated to greenhouse gas monitoring, Greenhouse Gases
Observing Satellite (GOSAT), launched by Japan in 2009 (NIES, n.d.). More satellites have been launched
since, including those from the Copernicus program of the European Space Agency, the EMIT program
from NASA, and GHGSat (ESA, n.d.; NASA, 2022; GHGSat, n.d.). A number of satellites are scheduled to
launch in the coming years, which are planned to generate higher resolution and more timely, specific
data on the release of greenhouse gases into the earth’s atmosphere (Jacob D. J., et al., 2022).

Figure 4.3 Image of methane plumes in the Hunter Valley, New South Wales, observed by NASA’s EMIT
satellite on 25 January 2023 (NASA, 2023), accessed by the authority 8 August 2023.

Satellites provide an indirect measure of greenhouse gas emissions. Researchers that have used
satellite-based measurements of methane plumes in the atmosphere rely on a technique known as
‘inverse modelling’ to transform data collected from the atmosphere, including measurements of gas
concentrations and weather information, into estimates of emissions at the earth’s surface (Cho,
Chung, Miller, & Saibaba, 2022). Inverse modelling is a developing field and the speed of inverse
modelling has increased with computational power in recent years (Chevallier, Lloret, Cozic, Takache, &
Remaud, 2023).
There are limitations to satellite-based measurements that prevent this technology being used to
estimate emissions reliably at the facility level (Sherwin, et al., 2023; Cooper, Dubey, & Hawkes, 2022.
These limitations stem from cloud coverage, the fraction of sunlight reflected by the earth’s surface,
and wind (Cooper, Dubey, & Hawkes, 2022). These estimates are also very sensitive to assumptions of
wind speed, which can introduce a 30% uncertainty to emissions estimates (Jacob D. J., et al., 2022;
Varon, et al., 2018). The resolution of methane-detecting satellites currently limit the identification of

Page | 70
facilities that are geographically close – for example, the TROPOMI satellite has a resolution of 5.5 × 7
km2 (Jacob D. J., et al., 2022).
The temporal nature of these satellite observations also limit their use in making conclusions about the
total annual emissions from a facility. For example, coal and gas fugitive emissions sources have been
found to have high temporal variability (Riddick, Mauzeralla, Celia, Kang, & Bandilla, 2020; Frankenberg,
et al., 2016; Zavala-Araiza, et al., 2015; Duren, et al., 2019; Dreger & Kędzior, 2021; UNEP, 2022;
Swolkień, Fix, & Gałkowski, 2022).
As a result, accurate estimates of these emissions are difficult with limited sampling. This limitation
occurs for all approaches that use limited sampling to track emissions sources that vary over time.
Despite these limitations, the combination of improved satellite data and processing power has
enabled the detection of concentrated emissions sources. Fugitive methane venting and leaks that
result in concentrated plumes of methane, known as super-emitting events, are the most frequently
identified sources of emissions because of their concentration and scale (Zavala-Araiza, et al., 2015;
NASA, 2022; Irakulis-Loitxate, Guanter, Maasakkers, Zavala-Araiza, & Aben, 2022; Zhang, et al., 2020).
4.3.2 Satellite studies of methane emissions from Australian facilities
Two international satellite-based studies have reported on emission estimates for Australian facilities
(Sadavarte, et al., 2021; Palmer, et al., 2021). 23
A report from researchers at the Netherlands Institute for Space Research evaluated three locations
with coal mines in the Bowen Basin in Queensland, comparing satellite-based emissions estimates with
their estimates of reported methane emissions (Sadavarte, et al., 2021). The Sadavarte et al. analysis
estimated reported emissions by combining data from the EDGARv4.3.2 global emissions inventory,
Australia’s National Inventory, 24 basin-level gas content, mine type and production volumes (Sadavarte,
et al., 2021). The authors concluded that there were underestimations in the reported emissions for
two of the three sources.
As a further examination of the satellite data reported in the Sadavarte et al. study, the authority has
performed analysis to compare these satellite-based estimates with the total facility-wide emissions for
these mines reported under the Safeguard Mechanism (Table 4.4). The Safeguard data includes
emissions reported for the whole facility, including all reported fugitive emissions. The authority’s
analysis of NGER data indicates that for Safeguard facilities where coal mining is the primary activity at
the facility:
• Underground: fugitive emissions comprised an average of 95% of emissions reported to the
NGER scheme, with fuel combustion comprising the remaining 5%

• Open cut: fugitive emissions comprised an average of 41% of total emissions reported to the
NGER scheme, and fuel combustion comprises 59%
Confidentiality constraints prevent this Safeguard facility data from being further disaggregated. As
such, the facility-wide emissions reported under the Safeguard Mechanism for these mines have been
treated as the ceiling of the reported fugitive emissions in the authority’s analysis.
Emissions reported under the Safeguard Mechanism for 2018-19 and 2019-20 were averaged to obtain
averaged annual facility emissions for the mines covering the same years as the Sadavarte et al. study.

23
Other studies have come to similar conclusions regarding estimates of methane emissions reported to the US
and Canadian National Inventories (Dubey, Cooper, Staffell, Hawkes, & Balcombe, 2023; Shen, et al., 2022).
24
The study used the state level fugitive methane emissions from open cut and underground coal mining
published in the National Inventory Report 2018 (DCCEEW, 2020).
Page | 71
For sources where Sadavarte et al. estimated the emissions from multiple mines, Safeguard data for
those mines were combined.

The authority’s analysis found that:

• total facility-wide emissions reported by these facilities were found to be within the
uncertainty range of the satellite-based estimates made by Sadavarte et al. for two sources
(Sources 2 and 3 in Table 4.2), which have a mix of open cut and underground mines

• satellite-based estimates made by Sadavarte et al. for Hail Creek (Source 1 in Table 4.4) — an
open cut mine for which Methods 1-3 are available — were higher than the total facility-wide
emissions reported for that year.

Source 1 Source 2 Source 3

Hail Creek Goonyella Broadmeadow (GB) Capcoal Grasstree (CG)
(HC) Mine Mine, Moranbah North (MN) Mine & Oaky Creek (OC)
Mine* & Grosvenor (G) Mine Mine
Mine type Open cut Open cut and underground
Facility name HC GB MN* G CG* OC
Avg annual facility
emissions reported to 0.50 1.2 2.0 1.2 2.8 1.2
Safeguard (Mt CO2-e)
Avg annual emissions
reported to Safeguard 0.50 4.4 4.0
per source (Mt CO2-e)

Sadavarte et al. satellite

estimates per source 5.8 ± 1.3 4.8 ± 1.5 3.8 ± 1.6
(Mt CO2-e)

Table 4.2 Sadavarte et al estimates of fugitive emissions compared to the total emissions reported per
facility under the Safeguard Mechanism (Sadavarte, et al., 2021). AR4 used to convert from methane to
CO2-e. 25

A similar satellite-based study by the UK National Centre for Earth Observation (NCEO) estimated
emissions associated with coal mines in the Bowen Basin and compared these estimates with facility-
wide data reported under the Safeguard Mechanism (Palmer, et al., 2021). The study found estimated
emissions were within the margin of error of the total reported emissions for underground coal mines.
However, estimated emissions made by Palmer et al. were higher than the reported emissions for the
two open cut coal mines (Table 4.3).

25
The Global Warming Potential (GWP) from the IPPC’s Fourth Assessment Report (AR4) was used for the
reporting periods 2015–16 to 2019–20. AR4 used a GWP of methane of 25. *Two mines were under multiyear
reporting for this period, so “reported covered emissions” for 2018-19 were used.
Page | 72
 Moranbah North/
Hail Creek Coppabella Capcoal
Broadmeadow
Open cut and
Mine type Open cut Open cut Underground
underground
Palmer et al. satellite
1.1 ± 0.5 0.8 ± 0.4 2.9 ± 1.3 2.8 ± 1.3
estimate (Mt CO2-e)
Annual facility emissions
reported to Safeguard 0.5 0.2 3.2 2.8
(Mt CO2-e)
Table 4.3 Palmer et al. comparison of fugitive emissions and total emissions reported per facility under
the Safeguard Mechanism (Palmer, et al., 2021). Palmer et al. satellite emissions estimates using AR5,
while emissions were reported to the NGER scheme under AR4 for this period. 26 The Palmer et al. data
was converted to AR4 in the table.
From this very limited pool of two satellite-based studies, and the authority’s own analysis, the
authority has observed general agreement between satellite-based estimates of fugitive emissions and
reported emissions using Method 4 (i.e. underground coal mines). However, discrepancies appear to be
more prevalent for two open cut mines examined in these studies where lower order methods are
available for reporting emissions.
While further studies will be required to investigate the concordance between satellite-derived
estimates and reporting based on lower order methods in the NGER scheme, the evidence presented
here points to possible issues around the accuracy of emissions estimates based on lower order
methods in the NGER scheme.
4.3.3 Use of lower order reporting methods may underlie possible discrepancies between estimates
of fugitive emissions
To further understand the possible discrepancy between measurements made by remote sensing and
reported emissions, the authority has reviewed the methods used by NGER reporters to estimate
fugitive emissions based on analysis of 2021-22 NGER data (Figure 4.3).
The authority’s analysis has found 54% of Australia’s total fugitive emissions from coal mines, and oil
and gas operations used Method 1.
Further analysis by states and territories showed that for open cut mining:
• 72% of fugitive emissions were reported using Method 1 in Queensland
• 26% of fugitive emissions were reported using Method 1 in New South Wales.
The emissions factor for fugitive methane is lower in Queensland than in NSW, indicating reporters may
be incentivised to use Method 1 where the use of a lower emission factor may lead to a lower
estimation of fugitive emission than higher order methods (Measurement Determination). 27 In contrast,
in NSW where the emissions factor is higher, reporters may be incentivised to use higher order
methods to estimate their fugitive emission from open cut mining.

26
The IPCC Fifth Assessment Report (AR5) uses a GWP of methane of 28.
27
For the year 2021-22, these were 0.023 and 0.061 tonnes CO₂-e per tonne of coal, for Queensland and New
South Wales, respectively. In 2023, the Queensland Method 1 emission factor was revised to 0.031 tonnes CO2-e
per tonne of coal.
Page | 73
For the gas sector, the authority found that Method 1 is the most frequently used method. However
due to confidentiality constraints of the NGER Act, the portion of emissions reported using each
method cannot be disclosed.

Fugitive methane emissions reported Fugitive emissions reported to NGERs

to NGERs from coal mining, 2021-22 from coal mining, 2021-22
100
Underground
80 total Method
Number of reports

Undergound 1
60 methane 2
2A
40 Open cut 3
total 4
20 Open cut Other
methane Total
0
1 2 4 Other -0 5 10 15 20
Method Mt CO2-e

Fugitive methane emissions reported Fugitive emissions reported to NGERs

to NGERs from oil and gas, 2021-22 from oil and gas, 2021-22
600
Total
Number of reports

emissions
400

200 Total
methane

0
1 2 2A 3 4 Other -0 5 10 15 20
Method Mt CO2-e

Figure 4.4 An overview of methods used to report fugitive emissions under the NGER scheme in 2021-22
(CO₂-e). The methods used for reporting some fugitive emissions are not shown due to confidentiality
constraints.
4.4. International developments in methane measurement reporting and verification
There is growing international momentum to improve the accuracy and transparency of methane
emissions monitoring. In considering possible improvements to the NGER scheme, the authority has
reviewed international developments in methane measurement, reporting and verification.

Methane measurement, reporting and verification (MRV) frameworks provide systematic approaches
for measuring or estimating methane emissions, reporting these emissions, and verifying these
emissions, typically through an independent third-party.
4.4.1 Oil and Gas Methane Partnership 2.0 and Metcoal Methane Partnership
Two new international frameworks for improving methane MRV are being developed by the United
Nations Environment Program (UNEP) together with industry groups— the Oil and Gas Methane
Partnership (OGMP) 2.0 and the Metcoal Methane Partnership (MMP).
Launched in 2020, the OGMP 2.0 reporting framework was developed in conjunction with the European
Commission, the Environmental Defense Fund, the Clean Air Taskforce, and the Climate and Clean Air
Coalition to establish a comprehensive measurement-based methane reporting framework for the oil

Page | 74
and gas industry. Over 100 companies, with assets representing over 35% of the world’s oil and gas
production, have joined OGMP 2.0 (OGMP, n.d., a).
The yet to be completed MMP is being developed by the UNEP International Methane Emissions
Observatory (IMEO) for metallurgical coal producers. MMP is aimed at decarbonising the steel supply
chain. MMP aims to establish a performance framework for substantial, sustained reduction of
methane emissions. It aims to provide guidelines on scientific methodologies for quantifying and
reporting emissions, requiring annual reporting of emissions data to IMEO.
Both OGMP 2.0 and MMP frameworks include flexibility of reporting, with five levels available to
estimate and report methane emissions increasing in complexity from Level 1 (based on emission
factors) to Level 5 (requiring source and site level measurements), see Table 4.4. These frameworks also
set performance targets for either absolute methane emissions reduction or reduction in methane
intensity. 28
Both frameworks describe a ‘gold standard’ for methane emissions estimation and reporting:
• MMP gold standard: companies must reach Level 5 for operated underground sites within
3 years, and for all non-operated sites and surface mines within 5 years.

• OGMP 2.0 gold standard: all assets with material emissions must report at Level 4, 29 with all
remaining sources reported at Level 3 30 and demonstrated efforts to move to Level 5 (OGMP,
2020; OGMP, 2022).

Level 1 Level 2 Level 3 Level 4 Level 5

Reporting: Reporting: Reporting: As per level 3

Some Detailed
Estimation: Source-level
disaggregation disaggregation Reporting &
OGMP Reporting: measurement or
of sources, of sources
2.0 Uses an sampling. Detailed Estimation: As
including for required.
aggregate for engineering calculations per Level 4.
leaks, venting
whole Estimation: and modelling can be Requires
and flaring.
operation. Emissions used where appropriate. additional site-
Estimation: factors include level
Estimation:
Typically uses those from Reporting: As per level 3 measurements
Uses simple
generic guidance for quality
emission Estimation: Site specific
emissions documentation, assurance of
MMP factor related measurements at an
factors, but academic or total source-
to production. appropriate frequency
more industry studies, level estimates.
for lowest uncertainty of
quantification or international
estimated emissions.
can be used. standards

Table 4.4 A simplified overview of the estimation and reporting levels of the OGMP 2.0 and MMP
frameworks (OGMP, 2020).

Similarly, the NGER reporting scheme typically makes multiple methods available to reporters,
increasing in complexity from Method 1 to Method 4. Methods 1-4 for reporting emissions under the
NGER scheme are well aligned with Levels 2-4 in both OGMP 2.0 and MMP.

28
Volume of methane released per tonne of coal or as percentage of marketed gas.
29
Defined as a minimum 70% of total emissions for the facility.
30
Must include justification as to why over 90% of emissions are not reported at Level 4.
Page | 75
While there is significant alignment between the two international frameworks and the NGER scheme,
there are a number of areas where these frameworks diverge:
• Source-site reconciliation - the NGER scheme does not include methods for site- or facility-
level measurement for verification of total source-level emissions measured or estimated
across the site.

• Completeness of emissions sources - some categories of emissions that are required under
OGMP 2.0/MMP are not currently required to be reported under the NGER scheme. These
include: decommissioned open cut coal mines, post mining emissions for open cut coal mines
and non-gassy underground coal mines, and coal waste pile emissions using Method 1.
• Granularity of reported emissions - under the NGER scheme, some activities cover emissions
from a number of sources that are disaggregated under OGMP 2.0 and MMP. These include
natural gas transmission sources, and natural gas distribution sources.
• Availability of direct measurement methodologies - some activities which have Level 4
reporting methods under OGMP 2.0 and MMP do not have a comparable Method 4 direct
measurement or detailed engineering calculations available under the NGER scheme. These
include: leakage sources in oil and gas, flaring sources in oil and gas, and some vented sources
in oil and gas.
A number of Australian oil and gas facilities are covered under OGMP 2.0 (OGMP, n.d., b). The authority
will monitor new measurement methods developed as part of these frameworks in our annual progress
report for potential future inclusion in the NGER Measurement Determination.
4.4.2 Source-site reconciliation of emissions estimates

Top-down measurements provide a means to verify bottom-up reported emissions

Both OGMP 2.0 and MMP place a high importance on direct measurement of emissions sources, as
opposed to the use of emissions factors. In addition to this, these frameworks require verification or
quality assurance of these measurements through site-level measurements. Site-level measurements
are designed to quantify the total amount of emissions across all sources of emissions within a site or
facility. While satellite measurements conducted from orbital height do not yet have the accuracy
required for measuring methane emissions at the facility-level, there are many measurement
technologies that are currently suitable for measuring these emissions closer to the ground (Erland,
Thorpe, & Gamon, 2022). Examples of technologies used for these measurements are outlined in Box
4.1.
At the highest level (Level 5) both OGMP 2.0 and MMP approach estimating methane emissions using a
combination of direct measurements and site-level measurements. These are also referred to as
‘bottom-up’ and ‘top-down’ measurements.
Bottom-up measurements or estimates use data obtained close to the source of emissions. The NGER
scheme, including Methods 1-4, are examples of methodologies for making bottom-up estimates or
measurements of emissions.
Top-down measurements or estimates are made at a larger spatial scale, beyond individual point
sources. Top-down measurements use technologies to detect or measure emissions from a range of
spatial scales ranging from: plant or equipment scale, to facility or site scale, to larger areas including
basins. These measurements are useful to understand total emissions across a particular spatial scale.
In recent years, there have been significant advancements in top-down measurement technologies. Box
4.1 explores these advancements.

Page | 76
 Box 4.1 Spatial scale of top-down measurement technologies

The most appropriate technology for top-down measurements depends on the volume and
concentration of methane, and the geographical scale of the site or facility (Erland, Thorpe, &
Gamon, 2022). A summary of methods and applicable scale of measurements are included in the
table below (WMO, 2019), (Erland, Thorpe, & Gamon, 2022).

Platform for
Scale of measurement Examples for use of data
measurement
Detect methane emission hotspots,
Regional – sub-regional
Satellite estimate regional fluxes. Identify super-
(1 km2 – 1000 km2)
emitting leaks.
Sub-regional – facility Airborne (aircraft Source detection, make basin-wide
(1 km2 – 100 km2) and remote sensing) estimates, identify super-emitting leaks.
Identify super-emitting leaks, determine
Facility – site Ground-based facility-wide emission factors. Emissions
(<1 m2 to 1 km2) (including vehicles) reporting, input to facility-scale
reporting, leak identification.
The process of bringing top-down and bottom-up measurements together to evaluate the
completeness of emissions estimates is called ‘source-site reconciliation’. Source-site reconciliation is
the process where the total of the bottom-up emissions measurements and estimates from across a
facility are compared and cross-checked against a top-down, site- or facility-wide emissions
measurement. This reconciliation process can be used to verify emissions totals and can also be used to
identify unknown emissions sources (OGMP, 2022; Johnson, Conrad, & Tyner, 2023; Erland, Thorpe, &
Gamon, 2022).
While all fugitive methane measurements have uncertainties associated with them, making
measurements at multiple ‘levels’ – both at the source level and at the site level – and reconciling
differences in emissions estimates will reduce the overall uncertainty in the reported emissions (Wang,
et al., 2022). These different measurements can be considered complementary, with discrepancies
between the two estimates used to detect previously unknown methane sources and implement
improved bottom-up measurements (Daniels, et al., 2023).
Sources of fugitive methane emissions not reported in the NGER scheme may be identified in the
reconciliation process. From coal mining, this could include unidentified gas migration, unused mine
entries or bore holes, or new ground seeps opening, including micro-seepage that can be difficult to
detect (IEA, 2023d; Sechman, Kotarba, Kędzior, Kochman, & Twaróg, 2020). In gas facilities,
unaccounted sources of emissions can include unknown intermittent leaks due to plant operations or
other activities (Cusworth, et al., 2021; Saint-Vincent & Pekney, 2020).
Limited top-down measurements of fugitive methane emissions in Australia
The authority has found limited examples of top-down emissions measurements being conducted in
Australia. A study conducted by CSIRO, Australian Coal Industry’s Research Program (ACARP), and the
Department of Industry, Innovation and Science evaluated two top-down measurement techniques for
their potential to estimate fugitive emissions over open cut coal mines in the Hunter Valley and the
Bowen Basin (Day, et al., 2017). The study found emissions were able to be accurately estimated for
some emissions sources using mobile monitoring techniques (vehicles equipped with a methane
analyser) and atmospheric modelling methods, but more development is required for these techniques
to be appropriate for estimating all coal mining fugitive sources.

Page | 77
Several studies have evaluated basin-wide estimates of fugitive emissions for the Surat Basin. For
example, one study used data acquired from 2 continuous monitoring stations that measured methane
concentrations for 3 years, and additional ground-based instruments for 1.5 years (Luhar, et al., 2020).
The authors found that estimated fugitive emissions from coal seam gas production in the basin were
33% higher than expected from their detailed bottom-up emissions estimate. Another study of the
basin used aircraft equipped with sensors to measure gas concentration (Neininger, Kelly, Hacker, Lu, &
Schwietzke, 2021). The emissions estimates obtained using aerial surveys were found to be slightly
higher than their detailed, bottom-up emissions estimate of the Basin, but the authors found good
overall agreement between the top-down measurements and bottom-up estimates.
This year, scientists from the International Methane Emissions Observatory (IMEO) conducted a study
of coal mine methane emissions in the Bowen Basin. Results from this study may provide more
information about the appropriate measurement technologies to accurately estimate emissions from
more Australian coal mines.
Capability gap for top-down measurements of fugitive methane emissions in Australia
Historically, Australia has been world leading in scientific research and technical capability relating to
atmospheric methane measurement and quantification. In the early 1970s the Australian Government
committed to the UNEP to monitor and study global atmospheric composition for climate change
purposes as a result of human activities and natural variability. As a result, the Kennaook/Cape Grim
Baseline Air Pollution Station began recording methane concentrations from 1978 and has been in
continuous operation since as a joint responsibility of the Australian Bureau of Meteorology (BoM) and
the CSIRO (Wang, Yung, Lacis, Mo, & Hansen, 1976; CSIRO, n.d., a). Using data recorded at this station,
Australian scientists from the CSIRO have made significant advances in the understanding of the growth
and changes in atmospheric methane concentrations, evaluated the sources of increased methane, and
developed models of the global methane cycle (Fraser, Khalil, Rasmussen, & Crawford, 1981; Pearman,
Etheridge, de Silva, & Fraser, 1986; Pearman & Eraser, Sources of increased methane, 1988; Steele, et
al., 1992; Fung, et al., 1991).
Since this time, while nodes of methane measurement expertise have developed across Australia within
the CSIRO, University of New South Wales, University of Wollongong, University of Melbourne, and
other universities, Australia has failed to keep pace with global developments and investment in
methane measurement capability.
Australia’s small methane measurement and analysis community include research institutions and
domestic companies offering methane measurement, reporting and verification services utilising
technologies that cover different scales of emissions sources, from ground-based measurements to
drones and light aircraft. However, this sector will require time and dedicated investment to reach its
full potential.
High quality data on all sources of methane in geographical areas surrounding a facility are essential for
improving the accuracy of any facility-wide emissions measurements.
Continuous monitoring of methane emissions is important for establishing the natural, or background,
levels of methane in the atmosphere. Emissions monitoring networks can provide very important data
to validate emissions estimates for national inventories, as well as help improve understanding of
atmospheric science (NOAA, n.d.).
There are currently 4 stations in the Australian Greenhouse Gas Observation Network (AGGON), which
monitor the atmospheric concentration of greenhouse gases (CSIRO, n.d., b). By comparison there are 7
stations across the state of California in the United States, and 46 stations across 16 countries in the
European Union (CARB, n.d.; ICOS, n.d.). Due to Australia’s large geography and limited number of
monitoring stations, there are gaps in Australia’s emissions monitoring network.
Page | 78
4.5. Improving fugitive emissions reporting under the NGER Scheme
The authority has identified improvements that can be made to the NGER Measurement Determination
to enhance the accuracy of fugitive emissions reporting.
4.5.1 Increasing the accuracy of reported fugitive methane emissions in the NGER scheme
The authority has heard from many stakeholders that the use of Method 1 is no longer appropriate for
estimating fugitive emissions with the accuracy required to track emissions reduction activities. While
the use of Method 1 brings benefit to reporters such as simplicity and lower cost, the authority is of the
view that moving to higher order methods would provide increased accuracy of Australia’s reported
fugitive emissions.
Further, as Method 1 uses an emissions factor and commodity production volumes to calculate
emissions, reported fugitive emissions change only when production levels change. Without being able
to account for reduced emissions, there is little incentive to invest in emissions abatement activities.
Method 1 for extraction of coal in open cut mines uses some emissions factors that are based on older
studies with limited sample sizes. For example, the emissions factor for New South Wales coal mines is
based on a 1993 study from the CSIRO (DCCEEW, 2023n).
Emissions factors are also not able to accurately capture the variability of methane content across
different coal seams or gas zones (ACARP, 2008). Importantly, where mines are pre-drained of
methane, the use of emissions factors do not capture this reduction of fugitive emissions in the mine.
This may discourage the use of pre-drainage, as this reduction is unable to be reflected in a facility’s
reported emissions where Method 1 is used. Reduction of emissions through pre-drainage can be
captured by moving to Method 2. Emissions factors also fail to capture the variability of mine depths.

’Australia’s heavy reliance on emissions factors to report methane means that

companies can deliberately or inadvertently overlook significant emissions sources,
such as intermittent leaks. It also reduces the incentive for companies to adopt best
practices for methane detection and abatement, such as replacing pneumatics and
pumps, installing recovery systems, and implementing leak detection and repair
programmes.’
Environmental Defense Fund submission to this review

’Woodside supports improvements to the measurement, reporting and verification

(MRV) of reported methane emissions for the purpose of identifying and promoting
mitigation activities by enabling more transparency in the crediting of methane
reductions. The framework should be holistic and tailored for Australian operations,
with a pragmatic approach that balances measurement and estimation, ensuring that
operators can optimise measurement type and frequency according to the materiality
of emissions measured and their variability.’
Woodside Energy submission to this review
In the public survey conducted for this review, less than a quarter of all respondents (and less than half
who identified as NGER reporters) classified the current reporting of fugitive emissions as somewhat
accurate or very accurate. Survey respondents identified costs as the largest barrier to moving to higher
order methods, followed by availability of technology and access to instrumentation or services.

Page | 79
 ’This assumption [that the use of emissions factors implies there may be significant
under reporting when compared to direct metering] ignores the logic with which
NGERS was designed and the conservative approach taken to develop emissions
factors. Reporting entities that use estimation rather than direct metering are not
withholding information or completing their obligations to a lesser degree of veracity.
Further, there may be site-specific determinates that preclude direct measurement /
metering.’
AIGN submission to this review

Recommendation 15

Phase out Method 1 estimation methodologies for fugitive methane emissions, including as a matter
of urgency for the extraction of coal in open cut coal mining.

As part of the phase out of Method 1 estimation methodologies, the authority is of the view that the
government should establish higher order methods for all fugitive emission sources included in the
Measurement Determination.
There are activities in the Measurement Determination for which Method 1 is the only available
method. These include some venting sources in oil and gas, and post mining emissions in coal mining.
The authority is of the view that where possible, higher order methods should be established to enable
Australian reporters to report their emissions to the highest degree of accuracy.
Establishing higher order methods for all remaining coal mining activities, where possible, would likely
support alignment with the anticipated Metcoal Methane Partnership reporting requirements. The
Metcoal Methane Partnership draft standards require that all activities have measurement or sampling
methods for 95% of their emissions.
The authority’s analysis suggests that direct measurement methods or detailed engineering calculations
should be made available for all activities reported in the oil and gas sector, to ensure all emission
sources with high materiality can be measured using Method 4. Gold standard reporting under OGMP
2.0 guidelines require a minimum of 70%, and targets of over 90%, of an oil and gas asset’s total
emissions to be reported at the equivalent of Method 4 (OGMP, 2022). Higher order method
availability will enable enhanced monitoring of emissions reductions and facilitate Australian reporters
to be able to sign up for OGMP 2.0.

’There is currently no method within the NGER program for reporting fugitive
methane emissions from the oil and gas sector that is based upon the direct
measurement of emissions. Rather, the binary characterisation of fugitive emissions
leaks with the NGER determination (method 2 and 3) as either a leaker or non-leaker,
without further differentiation with respect to the size of leaks, means there is no
incentive under the NGER scheme to improve methane emission performance –
carrying out detailed surveillance or undertaking actions with incremental
improvement in leak rates.’
Australian Energy Producers submission to this review
The authority has not conducted a detailed analysis of activities for which higher order methods for
estimating fugitive emissions are not yet available. The authority is of the view that the department
should be adequately resourced to review these activities, and develop and consult on higher order
methods for estimating fugitive emissions for amendable activities.

Page | 80
The establishment of some higher order methods may require further scientific studies to address
current information gaps. As part of the annual review of the Measurement Determination, the
department can only update methods where new data becomes available. Where there are gaps in
available and suitable research required to establish these higher order methods, the government
should fund research to develop them.

Recommendation 16

Resource the department to establish higher order estimation methods for all fugitive methane
emission sources included in the Measurement Determination.

Method 2 and 3 for the estimation of fugitive emissions from extraction of coal from open cut mines
were developed from an Australian Coal Industry Research Program’s (ACARP) study published in 2011
(ACARP, 2011). The Method 2 and 3 guidelines in the Measurement Determination require a minimum
of 3 boreholes to be sampled (ACARP, 2011). Due to the variability of methane content throughout coal
seams, this number of samples may be inadequate, particularly for modern deeper mines that typically
have higher methane content.
In a workshop organised by the authority on methane measurement, reporting, and verification,
scientific experts stated that there may be issues with the sampling requirements for Method 2 for the
estimation of fugitive emissions from open cut mining. These measurements may not be representative
of the whole-of-mine emissions.

Recommendation 17

As a matter of urgency, review Method 2 for extraction of coal in open cut coal mining with respect
to sampling requirements and standards.

The current reporting requirements for integrated gas facilities require all emissions sources within a
facility to use the same method for a selected group of activities (Measurement Determination). Under
current requirements, unless all measurements within an integrated gas facility are made at the same
level for this group, they cannot be reported using that method. This requirement was identified by
reporters as a barrier to using higher order methods.
To enable the direct measurement of sources within integrated gas facilities, particularly for those of
high materiality, the government should review the flexibility for reporting of emissions, while ensuring
greater flexibility of reporting does not compromise the integrity of estimated emissions. For example,
increased flexibility of reporting of emissions from integrated gas facilities could be contingent on
reporters providing evidence of emissions monitoring strategies in place at facilities, including continual
emissions monitoring devices.

‘Woodside would welcome a process to enable greater flexibility to incorporate

emerging technologies for use in the reporting of methane emissions on all sources
but in particular with any requirements to report fugitive emissions in line with LDAR
practices.’
Woodside Energy submission to this review

Recommendation 18
Review the requirement for integrated gas facilities to use the same method across activities to allow
for flexibility to use higher order methods for larger emission sources, while ensuring integrity of
estimated emissions.

Page | 81
4.5.2 Introducing top-down verification of reported emissions in the NGER scheme

As global efforts to monitor fugitive methane emissions gain momentum, increased capability in
satellite-based monitoring programs will enable the increased detection of fugitive emissions from
Australian facilities. Emissions reporting in Australia will continue to be a source of interest for
international studies and media outlets. The authority is concerned that the current disorderly process
where a range of methods are used by different groups, without agreed standards and protocols, to
make emission estimates for Australian facilities, will undermine confidence in the NGER scheme. With
the NGER scheme recognised as an international best practice emissions reporting framework, through
appropriate investment, Australia is well placed to become a world leader in methane emissions
reporting.

The authority is of the view that top-down verification of emissions estimates should be
institutionalised within the NGER framework. This will allow for the comparison of estimates made
using methods documented in the Measurement Determination with top-down measurements made
using known, standardised and agreed methods. Such an arrangement would allow for an orderly
process of verification of emissions estimates reported through the NGER framework.

‘Amendments to update the Measurement Determination should be made to require

all fossil fuel facility operators to conduct direct methane emissions measurement at
both the source and site levels, for coal, oil and gas activities covered by the
Determination (and equivalent requirements for facilities that have ceased
operation).’
Environmental Defense Fund submission to this review

‘The NGER review should consider enhancing methane measurement reporting in line
with best international practices, to promote accuracy and reliability. Therefore,
NGER scheme reconciliation with voluntary measurement and reporting approaches
such as the Methane Partnership 2.0 (OGMP 2.0) framework represents a further
consideration.’
APA submission to this review

‘The emergence of remote sensing measurement should continue to be supported,

and improvements monitored. At the same time, it should be recognised that a “top-
down” method must be rigorously ground-truthed against the existing ”bottom-up”
methods.’
AIGN submission to this review
The authority heard broad support for top-down emissions verification through a number of
submissions to the review, and during workshops with industry, scientists and non-government
organisations. In the public survey conducted for this review, none of the 30 respondents who
identified as NGER reporters or the 12 respondents who identified as reporting fugitive emissions to the
NGER scheme, had signed up to OGMP 2.0. The survey also found there was limited intent from
respondents who identified as reporters to sign up to MMP when it launches.
Australia should develop guidelines to be referenced within the Measurement Determination for
reporting top-down verification of emissions that are appropriate for the NGER scheme, including
standards and methodologies. Due to differences in the nature of emissions sources across industries,
these guidelines should be designed so that they can capture fugitive emissions sources across both
coal, and oil and gas. They should be based on information and advice provided by a panel of scientific
and industry experts with experience and knowledge in these measurement technologies.

Page | 82
The authority is of the view that a rigorous scientific and technological review will need to be
undertaken in Australia to document the range of sensor technologies, sample collection processes
(drone, aircraft, satellite, ground based) and analytic methods (e.g. inverse modelling) needed to
develop top down emissions estimates. Acceptable calibration, uncertainty and sensitivity levels for
each type of measurement should be a key focus of this review. Such a review should draw on
Australia’s industry and science experts, including from the CSIRO and officials from the National
Measurement Institute (NMI). Where information gaps exist, government should fund further studies
to develop the scientific evidence base specific to the Australian context for development of these
guidelines.

Recommendation 19
Commission a panel of Australian and international experts to establish a best practice process to
document the standards and requirements for making transparent, repeatable and credible top-
down measurements of fugitive methane emissions from Australian facilities. This panel should
evaluate whether any further research studies are needed and should be resourced to conduct
required studies. The panel of experts should be commissioned in the first quarter of 2024, and the
guidelines for making top-down verification measurements published as soon as practicable.
Alongside the development of guidelines for making top-down verification measurements, a top-down
verification policy framework should be established and integrated into the NGER scheme. Such a
framework should include details such as:
• verification requirements, including the frequency of top-down measurements
• schedule of phasing in of top-down emissions verification
• training or experience requirements for reporters
• guidance on reconciliation between top-down verification measurements and bottom-up
emissions estimates.
The Clean Energy Regulator (the regulator) should be involved in overseeing the reconciliation process.

Recommendation 20
Develop a top-down verification policy framework for the verification of bottom-up estimates of
fugitive methane emissions reported under the NGER scheme. This should be phased in on a trial
basis as soon as practicable, with mandatory verification using top-down measurements
commencing the year after. If any discrepancies are found between bottom-up estimates obtained
using an NGER method and the top-down verification measurement, the bottom-up measurement
approach should be refined by the reporting entity to reconcile the emission estimates.

Page | 83
4.5.3 Developing sovereign capability in methane measurement reporting and verification
In the future, satellite technologies may reach the standards required to verify emissions from some
high emitting facilities within the NGER scheme. The government should continue to monitor these
developments, and should consult the expert panel on the appropriate requirements that should be
met for the detection of fugitive emissions. Requirements may include acceptable satellite detection
limits and accuracy, standards for inverse modelling, and what data to be included with any satellite
reports.

Recommendation 21

Determine the appropriate requirements to be met for future use of satellite technology in detection
of fugitive methane emissions, and for verification of estimated fugitive methane emissions.

Throughout consultation for this review, the authority has heard the need to develop Australia’s
capability in methane measurement expertise. This foundational knowledge base is required to
improve top-down emissions measurements, and contribute to the broader knowledge base of
methane mitigation opportunities for Australia.
With the growing importance of methane emissions in the global response to climate change, and as a
signatory to the Global Methane Pledge, the authority views that it is important the government
prioritise and support the re-establishment of Australia as a world leader in methane emissions
monitoring and quantification. This support should aim to expand and connect existing nodes of
expertise and could leverage emerging international partnerships such as the International Methane
Emissions Observatory (UNEP, n.d.).
Development of Australia’s sovereign capability in methane measurement will be critical to ensure the
NGER scheme continues to support the achievement of Australia’s greenhouse gas emissions reduction
targets by:

• improving the robustness of the emissions data reported to the NGER scheme
• providing a basis for understanding third party reports of methane emissions events
• allow identification of abatement opportunities and tracking of progress towards emissions
reduction targets.

Recommendation 22
Prioritise and support the development of Australia’s sovereign capability in methane emissions
measurement and quantification, by building on existing expertise and leveraging international
partnerships where appropriate.

Page | 84
5. The Safeguard Mechanism
The Safeguard Mechanism is created under Part 3H of the NGER Act. Accordingly, the authority is
required to review its operation as part of its five yearly statutory review of the Act. Following the
reforms of the Safeguard Mechanism which came into effect on 1 July 2023, the operation of the policy
from this year onwards will look very different compared with its first seven years.
Key aspects of the reforms to the Safeguard Mechanism include using a production-adjusted emissions
intensity framework to set all baselines and the requirement for baselines to decline in a predictable
and gradual way that is consistent with achieving Australia’s emissions reduction target of 43% below
2005 levels by 2030 and net zero by 2050. The decline rate has been set at 4.9% each year until 2030
and applies to all new and existing Safeguard facilities, unless a differential trade exposed baseline
adjusted facility rate has been approved for a facility.
The Safeguard Mechanism reforms also establish the following emissions targets (known as the
‘Safeguard outcomes’):

• Total net Safeguard emissions for all of the financial years between 1 July 2020 and 30 June
2030 do not exceed a total of 1,233 million tonnes of carbon dioxide equivalence.

• Net Safeguard emissions decline to:

i. no more than 100 million tonnes of carbon dioxide equivalence for the financial year
beginning on 1 July 2029
ii. zero for any financial year to begin after 30 June 2049.
• The 5-year rolling average of Safeguard emissions for each financial year that begins after 30
June 2024 is lower than the past 5-year rolling average Safeguard emissions for that financial
year.
Here the authority provides a brief assessment on the performance of the scheme prior to the 2023
reforms and provides some observations on the reformed scheme.
5.1. Performance of the mechanism prior to the recent reforms
The Safeguard Mechanism was introduced into the NGER Act on 1 July 2016, with the objective to
…ensure that net covered emissions of greenhouse gases from the operation of a designated large
facility do not exceed the baseline applicable to the facility.
Facilities covered by the Safeguard Mechanism were required to keep their emissions below a baseline
applicable for that facility. The Clean Energy Regulator (the regulator) set the baseline for each facility.
There have been two types of baselines used under the mechanism (DCCEEW, 2022f):

• Fixed baselines, which place a total, or absolute, limit on the emissions a facility is permitted to
produce.
• Production-adjusted (or emissions intensity) baselines, which place a limit on the amount of
emissions a facility is permitted to emit on average to make their product or service.
The Safeguard Mechanism transitioned to a production-adjusted framework over the period 2019 to
2021 (DCCEEW, 2022f). Prior to the recent reforms to the mechanism, most facilities had production-
adjusted baselines, or were moving on to them soon (DCCEEW, 2022f).

Page | 85
Landfills have had different coverage and baselines setting arrangements to other Safeguard facilities,
recognising they do not have an identifiable production variable (CER, 2023u). Grid-connected
electricity generators also received different treatment. A single sectoral baseline of 198 Mt CO2-e was
applied to all generators connected to Australia’s five main electricity grids (CER, 2023u). This sectoral
approach was taken to grid-connected electricity generators in recognition that the electricity sector
behaves more like a single entity, where the output produced is centrally coordinated to meet demand
in real time (CER, 2023u).
5.1.1 Performance at the facility level
Since 2016, all facilities have stayed at or below their baseline. To stay below their baseline, some
facilities managed excess emissions by exercising flexible compliance options, including applying for
multi-year monitoring periods and surrendering Australian Carbon Credit Units (ACCUs) (Table 5.1). In
general, however, the use of these compliance options was often not required, as the level of emissions
allowed by baselines was generally higher than the actual emissions produced by Safeguard facilities.
For example, in 2021-22, baselines were, on average, approximately 40% higher than the actual
emissions from the corresponding facility (not including facilities utilising multi-year monitoring
periods).

Number of facilities that

Number of Number of facilities with multi-
Year surrendered ACCUs (including
covered facilities year monitoring periods
deemed surrender)
2016-17 203 6 16

2017-18 211 17 13

2018-19 210 31 18

2019-20 215 28 13

2020-21 212 40 14

2021-22 219 31 15

Table 5.1 Number of facilities covered by the Safeguard Mechanism each year and usage of compliance
options (CER, 2023n).

5.1.2 Performance at the mechanism level

Total emissions covered by the Safeguard Mechanism trended up over the first three years of the
scheme and have then slightly declined over the following three years (Figure 5.1). However, the
aggregate emissions from Safeguard facilities each year have never dropped below the initial level of
131 Mt CO2-e in its first year of operation in 2016-17 (shown by the black line in Figure 5.1). The
increase in aggregate emissions each year from the 2016-17 level is shown in light blue in Figure 5.1.
The resulting cumulative increase in aggregate Safeguard emissions since 2016-17 is 43 Mt CO2-e,
indicating that over the first six years of operation the Safeguard Mechanism was not effective in
reducing the total absolute emissions from Australia’s industrial sector.

Page | 86
 Increase since first year

Combined covered emissions (Mt CO2-e) 140

120

100

80

60

40

20

0
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Reporting Year

Figure 5.1 Total emissions covered by the Safeguard Mechanism since its introduction in 2016 (CER,
2023n)

To date, there has been little demand for ACCUs from facilities covered by the Safeguard Mechanism
(Table 5.2).
Combined gross Percentage of total Percentage of total ACCUs issued
ACCUs
Reporting covered covered emissions by government used for
surrendered
year emissions covered by ACCUs Safeguard compliance
(total)
(Mt CO2-e) (%) (%)
2016-17 131.3 448,097 0.34 3.4

2017-18 138.4 260,428 0.19 2.1

2018-19 144 190,381 0.13 1.4

2019-20 143 246,539 0.17 1.6

2020-21 136.9 419,315 0.31 2.5

2021-22 137.5 738,862 0.54 4.5

Table 5.2 ACCUs (CER, 2022i) and the Safeguard Mechanism (CER, 2023n)

5.1.3 Performance of the grid-connected electricity sector

Emissions from the grid-connected electricity generation facilities have been below the sectoral
baseline each year since the introduction of the Safeguard Mechanism (Figure 5.2). In 2021-22,
emissions from the grid-connected electricity sector were 57 Mt CO2-e (or 29%) below the sectoral
baseline. This means individual baseline compliance obligations have not been triggered for the grid-
connected electricity sector since the Safeguard Mechanism was put in place.

Page | 87
 200
Sectoral baseline = 198 Mt CO2-e
Total scope 1 emissions (Mt CO2-e)

150

100

50

0
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Reporting year

Figure 5.2 Emissions from the grid connected electricity sector by year compared with sectoral baseline
(CER, 2023m).

5.2. Observations on the reformed Safeguard Mechanism

The data for the first year of operation of the reformed Safeguard Mechanism may not be available
until April 2025. Following the release of that data the authority will be able to begin to make
observations about the performance of the reformed scheme. However, as part of the concurrent
review of the Carbon Credits (Carbon Farming Initiative) Act 2011 (ACCU Scheme review), the authority
has examined the potential impact of the reformed Safeguard Mechanism on the domestic carbon
markets. Interested readers are directed to the ACCU scheme review for the results of this analysis.
In this section the authority makes observations of the reformed scheme by comparing it to its previous
recommendations. This section also describes the work the authority will be conducting in future years
to assess the performance of the reformed Safeguard Mechanism.
5.2.1 Previous recommendations by the authority
Table 5.3 presents a summary of recommendations made by the authority in recent years. There is
good alignment between the reformed mechanism and these previous recommendations.

Page | 88
 Report Year Recommendation

Submission to 2022 In a submission to the department, the authority offered the following
the Safeguard comments on key issues raised in the Safeguard Mechanism Reforms
Mechanism consultation paper:
Consultation
• The Safeguard Mechanism’s share of the national abatement task
should be determined with consideration given to the potential
contributions of all sectors of the economy. It should not be less than a
proportional share.
• Crediting and trading of over-achievement against baselines should
commence once baselines are binding and declining for a Safeguard
facility to earn credits.
• Flexible compliance options based on carbon markets can smooth the
transition to lower emissions but need to be of high environmental
integrity.
• If/when international offsets are recognised for use in the Safeguard
Mechanism, the offsets recognized should be Internationally Traded
Mitigation Outcomes created under Paris Agreement rules.
• Tailored treatment for Emissions Intensive Trade Exposed (EITE) entities
should be targeted to where a risk of carbon leakage is demonstrated
to clearly exist, and should be transitional and transparent.
• Safeguard facilities should prepare and publish strategies and plans
setting out how they intend to comply with their declining baselines.
Prospering in a 2020 Recommendation 14: Enhance the Safeguard Mechanism to deliver emissions
low emissions reductions from large emitters in industry with:
world: an
• declining baselines with clear trajectories and the ability to trade
updated
climate policy under- and over-achievement once baselines have commenced
toolkit for declining and are binding
Australia • targeted, transitional and transparent competitiveness assistance to
emissions intensive, trade exposed industries captured by the
enhanced Safeguard Mechanism where a demonstrated risk of carbon
leakage exists.
Review of the 2020 Recommendation 2: To realise abatement opportunities in industrial facilities,
Emissions leverage co-investment and avoid risks to the ACCU market, the government’s
Reduction low-emissions technology incentive scheme make Safeguard Mechanism Credit
Fund (SMC) – concessional loans bundled with grants and tax incentives – available
to Safeguard-covered facilities undertaking transformative, below-baseline
abatement projects.
If designed as a carbon market mechanism, and noting the King Review
recommendation that the incentive scheme not be an offsets scheme,
consideration be given to mitigating risks to the ACCU market by:
• ensuring below-baseline carbon credits (SMCs) are:
o allocated for emissions reductions that meet a ‘transformative
project’ threshold, for example by setting crediting baselines
well below compliance baselines
o saleable only to the government and to entities under the
Safeguard Mechanism for the purpose of complying with
Safeguard obligations (and not otherwise fungible with ACCUs)

Page | 89
 • allowing banking of SMCs for use in future years only after an
assessment of the outcomes of the initial pilot phase
• funding any government purchase of SMCs separately from amounts
already allocated to the Climate Solutions Fund for the purchase of
ACCUs
• giving future consideration to implementing declining baselines with
clear trajectories, to maintain demand for ACCUs and SMCs (for
example, as technology evolves) and enhance co-investment in both
schemes
Review of the 2018 • Update Safeguard baselines to align approaches for measuring
National emissions and setting baselines.
Greenhouse • Improve liquidity in the market for ACCUs to reduce costs of complying
and Energy
with the Safeguard.
Reporting
legislation • Increase the incentive for Safeguard facilities to invest in projects that
reduce their indirect emissions using the Emissions Reduction Fund.
• Remove deemed surrender so Safeguard facilities only benefit once
from the ACCUs they generate.
Table 5.3 Previous recommendations by the authority on the Safeguard Mechanism
Central to the reformed Safeguard Mechanism are declining facility baselines. Previous reports by the
authority have recommended that baselines decline linearly in line with Australia’s emissions reduction
targets (CCA, 2020a; CCA, 2020b). The authority has also recommended the ability to trade over- and
under-achievement of baselines, once baselines commenced declining and are binding (CCA, 2020a).
This feature appears in the reformed Safeguard Mechanism in the form of ‘Safeguard Mechanism
Credits’. The authority has also noted that once crediting is in place, a Safeguard facility should not be
able to register an ACCU Scheme project to earn ACCUs from an activity that addresses the facility’s
scope 1 emissions—to remove any possibility of double-counting emissions reductions (CCA, 2022).
Under the reforms, ERF projects that solely reduce covered emissions at Safeguard facilities are no
longer able to be registered (DCCEEW, 2023d).
Another area of alignment relates to emissions intensive, trade exposed (EITE) industries. The reformed
mechanism offers tailored treatment for EITE businesses. The authority previously recommended
targeted, transitional and transparent competitiveness assistance to EITE businesses captured by the
Safeguard Mechanism where a demonstrated risk of carbon leakage exists (CCA, 2020a). Alongside the
Safeguard Mechanism reforms, the government offered support to EITEs in the form of access to
funding for low emissions technologies and discounted baseline decline rate—availability of support
depends on the type of EITE facility. The authority has previously suggested support mechanisms that
do not include differential baseline decline rates—as differential decline rates would shift the emissions
reduction effort onto non-EITE facilities (CCA, 2022). The authority notes that the baseline decline rate
was set accounting for trade-exposed baseline adjustments and includes a reserve to account for
higher-than-expected use of these adjustments (DCCEEW, 2023d).
One area of divergence between the reformed Safeguard Mechanism and the authority’s previous
recommendations is around transition planning. The authority previously recommended requiring all
covered facilities to prepare and publish strategies setting out how they will comply with declining
baselines (CCA, 2022). Such reporting requirements could have several benefits.

Page | 90
 • This would be in keeping with good practice corporate disclosures and would ensure that
where facilities are not subject to mainstream reporting requirements of publicly listed
companies, they are required to publish relevant information.
• The reported information would send valuable signals to the market, for example about future
demand for low emissions technologies and alternatives to high-emissions energy sources, and
for carbon offsets.
• It would also provide information and confidence in relation to expected outcomes under the
Safeguard Mechanism reforms.
The reformed Safeguard Mechanism only requires facilities that apply for multi-year monitoring periods
to prepare a plan for complying with their Safeguard obligations. Facilities that use ACCUs to meet 30%
cent or more of their baseline will be required to submit statements on why more on-site abatement
has not been undertaken, with aspects of this to be published to allow scrutiny.
It is possible these statements will include some detail on transition plans.
While the reforms do not go to the extent of requiring all Safeguard facilities to prepare transition
plans, it is likely that the requirements under the government’s proposed climate-related financial
disclosures will see more information on corporate transition plans published. Under the current
proposal, all entities covered by the financial disclosure mandate 31 will be required to disclose
transition plans, including information about offsets, target setting and mitigation strategies (The
Treasury, 2023). The proposal notes that for entities that do not have a transition plan, the disclosure
requirement could be met by stating they do not have a transition plan. The proposal also notes that, as
part of the broader consultation on the government’s Sustainable Finance Strategy, Treasury will
consider arrangements that could strengthen the development and disclosure of company transition
plans. The authority will continue to monitor the design and implementation of the government’s
initiatives under the Sustainable Finance Strategy and assess the availability of information on
Safeguard facility transition plans.
5.2.2 Future work by the authority
Ongoing analysis of the performance of the Safeguard Mechanism will be a key workstream for the
authority in the future.
Under recent changes to the Climate Change Act 2022 the authority must, as part of its annual advice
to the Minister for Climate Change and Energy, advise on whether gross and net Safeguard emissions
are declining consistently with Safeguard outcomes specified in the objects of the NGER Act. This new
reporting obligation will first come into effect for the authority’s 2024 Annual Progress Report. The
authority’s advice must take into account:
i. the impact of any expanded Safeguard facilities and new Safeguard facilities, and any facilities
of those kinds expected in the future, and
ii. any emissions estimates that are given to the authority by the Minister for the Environment
about approvals under the Environment Protection and Biodiversity Conservation Act 1999 that
relate to Safeguard facilities.
If Safeguard emissions, or net Safeguard emissions for the financial year are not declining in line with
the Safeguard outcomes, the authority’s advice to the Minister must also consider whether any

31
As proposed, public companies and large proprietary companies that are controlling corporations for Safeguard
facilities would be subject to the new disclosure requirements from 2024-25 onwards.
Page | 91
amendments to the Safeguard rules are needed in order to achieve those outcomes.
The authority is currently establishing a process for providing this advice on an annual basis, noting the
timing of the advice will be determined by the availability of Safeguard Mechanism data.
The authority is also expected to have a role in the government’s 2026-2027 review of the Safeguard
Mechanism. It is expected the authority will be asked to advise on the extent to which on-site
abatement is being driven by the Safeguard reforms, and whether any additional incentives are
required (such as a discount on ACCUs when used for more than a certain percentage of a baseline or
any circumstances where limits on the use of ACCUs may be appropriate) (DCCEEW, 2023d).

Page | 92
6. Administration and compliance
6.1. Administration
The Department of Climate Change, Energy, the Environment and Water (the department) has policy
oversight of the National Greenhouse and Energy Reporting legislation. Its responsibilities include:
• policy development for the NGER scheme and the Safeguard Mechanism
• conducting the annual review of the NGER Measurement Determination

• ongoing engagement with the public and industry on the NGER scheme and the Safeguard
Mechanism.
The Clean Energy Regulator (the regulator) implements the NGER Act, its legislative instruments, and
related policies and processes. This includes (CER, 2022j):
• registering and deregistering corporations for reporting
• receiving reports via the Emissions and Energy Reporting System (EERS)

• monitoring and enforcing compliance

• applying the audit framework
• administering the National Greenhouse and Energy Register
• administering the Safeguard Mechanism

• publishing data.
In the public survey conducted for this review, the authority asked respondents how satisfied they were
with the department’s role in maintaining and updating the NGER scheme. The authority also asked
about the level of satisfaction in the regulator’s implementation of the NGER scheme. In both cases,
only a minority of respondents were unsatisfied to some extent. Some issues were raised by
respondents, particularly relating to the scheme guidance materials and the availability of process-
related information under the scheme. Scheme guidance materials are discussed further in Section 6.2.
6.1.1 Administration activities
Having considered feedback from the regulator, the authority has identified opportunities to streamline
and improve the regulator’s administration activities. The first of these relates to deregistration of
entities below the reporting threshold.
Deregistration of entities below the reporting threshold
NGER reporters that fall below the reporting threshold must apply to the regulator if they wish to be
deregistered. These reporters will be deregistered by the regulator, provided they meet certain
conditions. Deregistration cannot be performed on the regulator’s own initiative unless the corporation
ceases to exist — as specified in subsection 18B(5) of the NGER Act.
In general, the deregistration process works as intended. However, one operational issue has surfaced
relating to corporations in liquidation. When a corporation enters liquidation, the regulator can only
deregister it once it ceases to exist. For the duration of their liquidation, they are considered non-
reporting entities. Historically, the regulator has deregistered several corporations once they ceased to
exist under the Australian Securities and Investments Commission (ASIC) but prior to that, they were
considered non-reporting entities within the NGER scheme for five to ten years (CER pers. comms.).
Over time, the regulator has developed better processes for identifying when companies go into
liquidation and can contact them while the administrators are actively involved in matters.
However, there are still three corporations in the NGER scheme that are undergoing liquidation and
Page | 93
cannot be deregistered. Two of the companies haven’t reported for 13 years and the other hasn’t
reported for five years (CER pers. comms).
The authority is of the view that these non-reporting corporations in liquidation add to the
administrative burden of the regulator and that it should have the discretion to deregister these
corporations from the NGER scheme. This may require legislative amendments. It may be appropriate
for the amendments to include guidance on the criteria for deregistration in these circumstances, for
example by including a minimum time that the regulator must wait after an entity enters liquidation
prior to deregistration.

Recommendation 23

Authorise the regulator to deregister corporations in liquidation from the NGER scheme on the
regulator’s own initiative to reduce the administrative burden for the regulator.

Reporting in a corporation’s trigger year

When a corporation meets a reporting threshold for the first time, it must register under the NGER
scheme (Section 12, NGER Act). The authority understands that in general, there is good awareness of
the NGER scheme in Australian industry, and that most companies self-identify and register once they
pass a threshold. As an additional measure to ensure compliance, the regulator performs business and
sectoral monitoring throughout the year and communicates with companies in instances where it
believes registration and reporting may be required (CER pers. comms). Occasionally, companies do not
immediately realise they have an obligation and end up registering late i.e. after the first year they
exceed a threshold, or their ‘trigger year’.
Currently there is no legislative basis for the regulator to require submission of reports for the years
between the trigger year and the year of registration. The regulator can only require a report for the
trigger year and the year of registration.
For example, if Corporation A triggers the reporting threshold in 2021-22 and registration occurs in
2022-23, the regulator requires reports for 2021-22 and 2022-23. In comparison, if Corporation B
triggers the reporting threshold in 2021-22 and registration occurs in 2023-24, the regulator can only
require reports for 2021-22 and 2023-24, leaving a gap in the data for 2022-23 as there is not
requirement to provide any data for the year in between.
For the years 2017-18 to 2020-21, a total of eight reporters have registered more than one year after
their trigger year (CER pers. comms). The regulator reports that while incomplete data between the
trigger year and the year of registration is not desirable, pursuing voluntary provision of data may have
data quality issues, and is also not desirable. The remaining option to resolve this issue is to create a
legislative basis for the regulator to request reporting for all years following the trigger year, regardless
of when registration occurs.

Recommendation 24

Require corporations that meet reporting thresholds to provide reports for all years following their
trigger year, regardless of when they register, to ensure completeness of the NGER datasets.

Page | 94
Replacing ‘trading name’ with ‘registered business name’
Currently the National Greenhouse and Energy Reporting Regulations 2008 require the National
Greenhouse and Energy Register to capture a corporation’s trading name, where it has one. Trading
names are being phased out by ASIC and replaced with ‘registered business names’. The transition
period ends on 31 October 2023, after which time trading names will no longer be displayed in the
Australian Business Register (Australian Business Register, 2021). To ensure the NGER documentation
remains up to date and comparable with other systems, the authority recommends updating the NGER
legislation to remove references to ‘trading name’ and replace them with ‘registered business name’.

Recommendation 25

Update the NGER scheme to replace references to a corporation’s ‘trading name’ with ‘registered
business name’.

6.12 Cost to business

The explanatory memorandum for the NGER Bill explains that one of the design objectives of the
scheme was to provide a single, cooperative, streamlined, reporting system for greenhouse and energy
data across all jurisdictions that imposes least cost and red tape burden needed to maintain the
integrity of existing national data collections (Revised Explanatory Memorandum, National Greenhouse
and Energy Reporting Bill 2007). That is, the design of the scheme sought to balance compliance costs
(to corporations and governments) with achievement of scheme outcomes.
Costs to businesses under the NGER scheme can include purchasing and operating measurement
equipment, paying staff or consultants to manage reporting, and auditing requirements.
In the public survey conducted for this review, the authority asked respondents about the
administrative burden for businesses associated with reporting under the scheme. Most respondents
viewed the administrative burden as either somewhat significant or non-significant. However, when
asked about the balance the NGER scheme strikes between costs on businesses and achieving the NGER
scheme’s statutory duties, most were supportive of the balance being struck.
6.1.3 Cost to government
In 2022-23 the regulator spent around $3.8 million implementing the NGER scheme and the Safeguard
Mechanism. This covered costs for activities such as program management, engagement, compliance,
data management and publication, and development of education materials; it does not include costs
for auditing and broader corporate overheads. The regulator expects administration costs to increase
following the reforms to the Safeguard Mechanism. In 2021-22, the department spent around $800,000
overseeing the NGER scheme. This does not include the cost of overseeing the Safeguard Mechanism,
however the department also notes its work has increased due to additional focus on methods that the
reformed Safeguard Mechanism has introduced. This also excludes the cost of the authority’s review of
the NGER Act and associated legislation, which occurs every five years.
6.2. Compliance and enforcement under the legislation
Based on feedback from the regulator and the public responses to the survey, the authority has found
compliance and enforcement under the NGER legislation is currently functioning effectively.

Page | 95
6.2.1 Guidance and education
The regulator has guidelines available on its website to assist reporters to comply with their NGER
obligations (CER, 2023v). In 2018, the authority heard that this education and guidance is important for
supporting compliance and data quality (CCA, 2018).
In the public survey conducted by the authority this year, the authority found the large majority of
NGER reporter respondents viewed the guidance provided by the regulator as either moderately or
very helpful in ensuring they report correctly under the NGER scheme. Some respondents suggested
improvements that could be made, in particular the inclusion of more case studies and worked
examples in the written guidance material.
6.2.2 Resubmissions and audits
In the 2018 review of the NGER legislation, the authority considered two indicators to understand the
extent of compliance with the legislation: the number of resubmissions requested by the regulator
because non-compliance was identified in reported data; and the number of adverse audit findings
(CCA, 2018). The authority has re-examined these indicators to understand the extent of compliance
since the last review.
Once reports are submitted each year, the regulator performs sophisticated analyses using automated
and detailed manual assessments to identify errors. Where material errors are found, resubmissions
are requested by the regulator (CER pers. comm.). In 2018, the authority found that the percentage of
resubmissions had been falling over the nine years since the scheme was introduced—the average
portion of total reports that were required to be resubmitted was 13% in the first five years of
operation and dropped to an average of 9% in the following four years (CCA, 2018). The authority noted
the decline in resubmissions could be interpreted as an indicator of increased accuracy of the data
reported (CCA, 2018). Table 6.1 shows that the rate of resubmissions has continued to decline since the
authority’s last review, with an average resubmission rate of 7% (inclusive of the reporting year 2017-
18). Again, this decrease could be a sign that accuracy of submitted reports has continued to increase.

2017-18 2018-19 2019-20 2020-21 2021-22

Number of submissions 869 878 915 932 953

Number of resubmissions 89 78 43 37 64*

Resubmissions as a percentage of
10 9 5 4 7
total submissions

Table 6.1 Report submissions and resubmissions for the NGER scheme and the Safeguard Mechanism
(CER pers. comms). * A data cleansing project was conducted for location information submitted for the
NGER reporting period 2021-22. This project increased the number of resubmissions of data by eight for
that period.

In addition to the detailed analysis the regulator conducts, audits are also performed on submitted
reports (Table 6.2). Over the last five years, the regulator has received on average voluntary audits on
6-8% of submissions each year. The regulator has also initiated audits on 1% of submissions each year,
on average across the five years. The regulator initiates audits to investigate particular compliance
priorities or risks.
Of the regulator-initiated audits over the last five years, the percentage of audits returning adverse
findings has been on average less than 20%. Most return clean findings (no material errors) or qualified
findings (the report is prepared in compliance with the NGER Act in all material aspects except this
qualification).

Page | 96
The high number of regulator-initiated audits, which are conducted to investigate compliance priorities
and risk areas, with no adverse findings indicates high levels of compliance and can indicate accuracy in
reported data.

Reporting year 2017-18 2018-19 2019-20 2020-21 2021-22

Number of submissions 869 878 915 932 953

Voluntary audits 61 67 77 68 59

Regulator initiated audits 18 11^ 6 9 7*

Total number of audits 79 78 83 77 66

Table 6.2 Audits and audit outcomes for the NGER scheme and Safeguard Mechanism (CER pers.
comms). ^ 11 audits were performed on 9 different reporting entities; * 7 audits have been finalised as
of 3 August 2023, however a total of 10 audits on 2021-22 NGER reports have been scheduled

In the public survey conducted for this review, the authority asked respondents how effective the NGER
audit framework is in ensuring that reporters are reporting correctly, completely and are fully
compliant with their reporting requirements under the NGER Act. There was a fairly even split between
respondents that found it effective to some extent and those that found it ineffective to some extent. A
number of respondents commented about the availability (or lack thereof) of auditors with sufficient
knowledge of the technical aspects of emissions reporting.
Considering the feedback from the survey and the research presented here, the authority is of the view
that the regulator is applying the audit framework effectively and actively working to improve it, e.g.
through the increasing sophistication of its assessment process and through its responsive approach to
setting compliance and enforcement priorities.
The planned climate-related financial disclosures scheme may draw upon the Register of Greenhouse
and Energy Auditors established under the NGER legislation. The timing of these reporting
requirements will affect the demand for these auditors if they coincide. Given this and the concerns
raised through the public survey, the authority is of the view that the pool of appropriately skilled
auditors will likely need to increase over coming years.
6.2.3 Enforcement action
The regulator has a range of enforcement powers including (CER, 2017):
• accepting enforceable undertakings from scheme participants in cases of potential or actual non-
compliance
• issuing infringement notices
• pursuing legal action for breaches of civil penalty provisions
• imposing conditions on, suspending or deregistering greenhouse and energy auditors
• publishing any reporters that submit a late report, if the reporter has a history of late reporting (for
the 21-22 reporting period onwards).
Enforceable undertakings are written statements from a person or organisation that they will do, or
refrain from doing certain things in order to resolve breaches or improve compliance with legislation
(CER, 2023w).

Page | 97
The 2018 review found that, to that time, the regulator’s enforcement action relating to greenhouse
and energy reporting has been limited to issuing two enforceable undertakings (CCA, 2018). Since that
time there have been two additional enforceable undertakings. Both undertakings relate to reporters
making errors in their NGER reports, resulting in over- and under- reporting of emissions.
Both undertakings are ongoing, requiring various actions from the reporters to improve the quality of
their reports (CER, 2023x). The regulator finds that enforceable undertakings have been effective in
improving reporter behaviour and data compliance (CER pers. comms., 2023).
In 2018 there was broad support by reporters for the current approach and level of penalties (CCA,
2018). In 2023, this was also generally the view of respondents when asked about enforcement powers
and activities of the regulator in the survey conducted by the authority for this review.

Page | 98
References
AACo (Australian Agricultural Company) (2023). The Art of Australian Beef. Retrieved from
aaco.com.au
ABARES (Australian Bureau of Agricultural and Resource Economics) (2021). AGSURF data.
Retrieved from
https://apps.agriculture.gov.au/agsurf/?_gl=1*1cfnvfz*_ga*MTkyMDQxMDY5LjE2OTI5MjYxOTc
.*_ga_EFTD1N73JJ*MTY5MzUyNjQ2OC40LjEuMTY5MzUyNzc1NS4wLjAuMA.
ABARES (Australian Bureau of Agricultural and Resource Economics) (2023a). Agricultural Outlook.
Retrieved from https://www.agriculture.gov.au/abares/research-topics/agricultural-outlook
ABARES (Australian Bureau of Agricultural and Resource Economics) (2023b). Snapshot of Austalian
Agriculture 2023. Retrieved from
https://www.agriculture.gov.au/abares/products/insights/snapshot-of-australian-
agriculture#around-72-of-agricultural-production-is-exported
ACARP (Australian Coal Industry's Research Program) (2008). Evaluating a Tier 3 Method for
Estimating Figitive Emissions from Open Cut Coal Mining. Retrieved from
https://www.acarp.com.au/abstracts.aspx?repId=C15076
ACARP (Australian Coal Industry's Research Program) (2011). Guidelines for the Implementation of
NGER Method 2 or 3 for Open Cut Coal Mine Fugitive GHG Emissions Reporting (C20005) and
Technical Discussion of the Implementation of NGER Method 2 or 3 for Open Cut Coal Mine
Fugitive GHG Emissions Reporting (C20005A). Retrieved from
https://www.acarp.com.au/abstracts.aspx?repId=C20005
ALFA (Australian Lot Feeders' Association) (2023). Numbers on feed rebound to near-record levels.
Retrieved from https://www.feedlots.com.au/post/numbers-on-feed-rebound-to-near-record-
levels
Australian Business Register (2021). Trading names in the ABR. Retrieved from
https://www.abr.gov.au/media-centre/featured-news/business-super-funds-charities/trading-
names-abr
Australian Country Choice (2023). Cattle and genetics. Retrieved from
https://www.accbeef.net.au/our-business/cattle-genetics/
Australian Government (2019). Australian Government response to the Climate Change Authority's
Review of the National Greenhouse and Energy Reporting Legislation. Retrieved from
https://www.dcceew.gov.au/about/reporting/obligations/government-responses/cca-review-
nger
BBRC (2023). BBRC Worldwide. Retrieved from
https://bbrcworld.com/investments/agriculture/#:~:text=BBRC%27s%20beef%20operations%2
0consist%20of,land%20owner%20in%20the%20world.
Becken, S., Mackey, B., & Lee, D. S. (2023). Implications of preferential access to land and clean energy
for Sustainable Aviation Fuels. Science of The Total Environment, 886, 163883.
doi:https://doi.org/10.1016/j.scitotenv.2023.163883
Beef Central (2020). Remote water monitoring pays big dividends for Central Australia's Crown Point.
Retrieved from https://www.beefcentral.com/ag-tech/remote-water-monitoring-pays-big-
dividends-for-central-australias-crown-point/

Page | 99
Business News (n.d.). Industry Lists - Heytesbury. Retrieved from
https://www.businessnews.com.au/Company/Heytesbury
CARB (California Air Resources Board) (2022). 2021 GHG Emissions Data. Retrieved from Mandatory
GHG Reporting - Reported Emissions: https://ww2.arb.ca.gov/mrr-data
CARB (California Air Resources Board) (n.d.). Statewide Greenhouse Gas Monitoring Network.
Retrieved from https://ww2.arb.ca.gov/our-work/programs/ghg-network
CCA (Climate Change Authority) (2018). Review of the National Greenhouse and Energy Reporting
Legislation. Retrieved from https://www.climatechangeauthority.gov.au/publications/2018-
review-national-greenhouse-and-energy-reporting-act
CCA (Climate Change Authority) (2020a). Prospering in a low-emissions world: An updated climate
policy toolkit for Australia. Retrieved from
https://www.climatechangeauthority.gov.au/prospering-low-emissions-world-updated-
climate-policy-toolkit-australia
CCA (Climate Change Authority) (2020b). Review of the Emissions Reduction Fund. Retrieved from
https://www.climatechangeauthority.gov.au/publications/2020-review-emissions-reduction-
fund
CCA (Climate Change Authority) (2021a). Paris Plus: From cost to competitive advantage. Retrieved
from https://www.climatechangeauthority.gov.au/publications/paris-plus-cost-competitive-
advantage
CCA (Climate Change Authority) (2021b). Paris Plus: Trade and investment trends in a decarbonisaing
world. Retrieved from https://www.climatechangeauthority.gov.au/news/paris-plus-trade-and-
investment-trends-decarbonising-world
CCA (Climate Change Authority) (2022). Safeguard Mechanism reform: consultation paper. Retrieved
from https://consult.dcceew.gov.au/safeguard-mechanism-reform-consultation-
paper/submission/list
CER (Clean Energy Regulator) (2017). Compliance and enforcement action. Retrieved from
https://www.cleanenergyregulator.gov.au/About/Compliance-and-
Enforcement/Compliance%20and%20enforcement%20action
CER (Clean Energy Regulator) (2021). Facilities Method. Retrieved from
https://www.cleanenergyregulator.gov.au/ERF/Choosing-a-project-type/Opportunities-for-
industry/facility-methods/facilities-method#How-is-abatement-calculated
CER (Clean Energy Regulator) (2022a). Defining a facility for National Greenhouse and Energy
Reporting. Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/NGER-Defining-
facilities.aspx
CER (Clean Energy Regulator) (2022b). Registration. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/Reporting-cycle/Register-and-deregister#n7
CER (Clean Energy Regulator) (2022c). Transcript: Emissions estimation methods and fuel measurement
criteria video. Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/Emissions-estimation-
methods-and-fuel-measurement-criteria.aspx

Page | 100
CER (Clean Energy Regulator) (2022d). Methods and measurement criteria guideline. Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/Methods-and-
measurements-criteria-guideline.aspx
CER (Clean Energy Regulator) (2022e). How to report. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/Reporting-cycle/Report
CER (Clean Energy Regulator) (2022f). Registration as a controlling corporation for National
Greenhouse and Energy Reporting. Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/Registration-as-a-
controlling-corporation.aspx
CER (Clean Energy Regulator) (2022g). What data is published and why. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/What-data-is-published-and-why
CER (Clean Energy Regulator) (2022h). National greenhouse and energy reporting data: Data
highlights. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/Data-highlights
CER (Clean Energy Regulator) (2022i). Australian carbon credit units issued. Retrieved from
https://www.cleanenergyregulator.gov.au/ERF/project-and-contracts-registers/project-
register/Historical-ACCU-data
CER (Clean Energy Regulator) (2022j). About the National Greenhouse and Energy Reporting scheme.
Retrieved from https://www.cleanenergyregulator.gov.au/NGER/About-the-National-
Greenhouse-and-Energy-Reporting-scheme
CER (Clean Energy Regulator) (2022k). Compliance policy for education, monitoring and enforcement
activities. Retrieved from https://www.cleanenergyregulator.gov.au/About/Policies-and-
publications/Compliance-policy-for-education-monitoring-and-enforcement-activities
CER (Clean Energy Regulator) (2023a). Key steps in reporting your obligations. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/Reporting-cycle/Assess-your-
obligations/Reporting-thresholds
CER (Clean Energy Regulator) (2023b). Greenhouse gases and energy. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/About-the-National-Greenhouse-and-Energy-
Reporting-scheme/Greenhouse-gases-and-energy
CER (Clean Energy Regulator) (2023c). The Safeguard Mechanism. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/The-Safeguard-Mechanism
CER (Clean Energy Regulator) (2023d). Safeguard facility reported emissions 2021-22. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/The-Safeguard-Mechanism/safeguard-
data/safeguard-facility-reported-emissions/safeguard-facility-reported-emissions-2021-22
CER (Clean Energy Regulator) (2023e). NGER 2021-22 published data highlights. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/Data-highlights/2021-22-published-data-highlights
CER (Clean Energy Regulator) (2023f). CERT Report Guidelines (FY2021-22 and CY2022). Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/CERT-Report-Guidelines-
FY2021-22-and-CY2022.aspx

Page | 101
CER (Clean Energy Regulator) (2023g). Data highlights. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/Data-highlights
CER (Clean Energy Regulator) (2023h). Compliance and enforcement priorities 2023-24. Retrieved from
https://www.cleanenergyregulator.gov.au/About/Pages/Compliance%20and%20Enforcement/
Compliance%20priorities/Compliance-and-enforcement-priorities-2023-2024.aspx
CER (Clean Energy Regulator) (2023i). Guarantee of Origin. Retrieved from
https://www.cleanenergyregulator.gov.au/Infohub/Markets/guarantee-of-origin
CER (Clean Energy Regulator) (2023j). Guarantee of Origin - Trial projects. Retrieved from
https://www.cleanenergyregulator.gov.au/Infohub/Markets/guarantee-of-origin/trial-projects
CER (Clean Energy Regulator) (2023k). Guidance on aggregated facility reporting, percentage
estimates, and incidental emissions and energy. Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/Aggregated-facility-
reporting-percentage-estimates-and-incidental-emissions-and-energy-guideline.aspx
CER (Clean Energy Regulator) (2023l). Calculators. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/Forms-and-resources/Calculators
CER (Clean Energy Regulator) (2023m). Electricity sector emissions and generation data. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/electricity-sector-emissions-and-generation-data
CER (Clean Energy Regulator) (2023n). Safeguard data. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/The-Safeguard-Mechanism/safeguard-data
CER (Clean Energy Regulator) (2023o). Controlling corporations registered under the NGER Act
(including Reporting Transfer Certificate holders) for the 2021-22 reporting year. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/Extract-of-National-Greenhouse-and-Energy-Register-by-year/national-
greenhouse-and-energy-register-2021-22
CER (Clean Energy Regulator) (2023p). Corporate emissions and energy data 2021-22. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/Corporate%20emissions%20and%20energy%20data/corporate-emissions-
and-energy-data-2021-22
CER (Clean Energy Regulator) (2023q). Greenhouse and energy information by controlling corporation
2021-22. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/Corporate%20emissions%20and%20energy%20data/corporate-emissions-
and-energy-data-2021-22
CER (Clean Energy Regulator) (2023r). Electricity sector emissions and generation data 2021–22.
Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/electricity-sector-emissions-and-generation-data/electricity-sector-
emissions-and-generation-data-2021%E2%80%9322
CER (Clean Energy Regulator) (2023s). Corporate emissions and energy data 2020-21. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%
20reporting%20data/Corporate%20emissions%20and%20energy%20data/corporate-emissions-
and-energy-data-2020-21

Page | 102
CER (Clean Energy Regulator) (2023t). Measurement Determination. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/Legislation/Measurement-Determination
CER (Clean Energy Regulator) (2023u). Baselines for financial years ending before 1 July 2023. Retrieved
from https://www.cleanenergyregulator.gov.au/NGER/The-Safeguard-Mechanism/The-
Safeguard-Mechanism-for-financial-years-ending-before-1-July-2023/Baselines-for-financial-
years-ending-before-1-July-2023
CER (Clean Energy Regulator) (2023v). Guidelines. Retrieved from
https://www.cleanenergyregulator.gov.au/NGER/Forms-and-resources/Guidelines
CER (Clean Energy Regulator) (2023w). Enforceable undertakings. Retrieved from
https://www.cleanenergyregulator.gov.au/About/Compliance-and-
Enforcement/Compliance%20and%20enforcement%20action/enforceable-undertakings
CER (Clean Energy Regulator) (2023x). Current enforceable undertakings. Retrieved from
https://www.cleanenergyregulator.gov.au/About/Compliance-and-
Enforcement/Compliance%20and%20enforcement%20action/enforceable-
undertakings/Current-enforceable-undertakings
CER (Clean Energy Regulator) (n.d., a). Reporting scope 2 emissions. Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/Reporting-scope-2-
emissions.aspx
CER (Clean Energy Regulator) (n.d., b). Guidance for completing application for information not to be
published. Retrieved from
https://www.cleanenergyregulator.gov.au/DocumentAssets/Pages/Guidance-for-completing-
application-for-information-not-to-be-published.aspx
CER (Clean Energy Regulator) (2023). pers. comm.
Chevallier, F., Lloret, Z., Cozic, A., Takache, S., & Remaud, M. (2023). Toward High-Resolution Global
Atmospheric Inverse Modeling Using Graphics Accelerators. Geophysical Research Letters, 50,
e2022GL102135. Retrieved from https://doi.org/10.1029/2022GL102135
Cho, T., Chung, J., Miller, S. M., & Saibaba, A. K. (2022). Computationally efficient methods for large-
scale atmospheric inverse modeling. Geoscientific Model Development, 15, 5547–5565.
Retrieved from https://doi.org/10.5194/gmd-15-5547-2022
Climate Active (2022). Carbon Neutral Organisations . Retrieved from
https://www.climateactive.org.au/sites/default/files/2023-04/Standards_Organisation.pdf
Climate Leadership Council (2023). Counting Carbon: Voluntary and mandatory emissions reporting
programs. Retrieved from https://clcouncil.org/reports/Counting-Carbon.pdf
Cooper, J., Dubey, L., & Hawkes, A. (2022). Methane detection and quantification in the upstream oil
and gas sector: the role of satellites in emissions detection, reconciling and reporting.
Environmental Science: Atmospheres, 2, 9–23. Retrieved from
https://doi.org/10.1039/D1EA00046B
CPC (Consolidated Pastoral Company) (2023). CPC. Retrieved from https://www.pastoral.com/
CSIRO (Commonwealth Scientific and Industrial Research Organisation) (2018). National Hydrogen
Roadmap. Retrieved from https://www.csiro.au/en/work-with-us/services/consultancy-
strategic-advice-services/csiro-futures/energy-and-resources/national-hydrogen-roadmap

Page | 103
CSIRO (Commonwealth Scientific and Industrial Research Organisation) (2022). Methane levels and
the role of science in mitigation. Retrieved from
https://www.csiro.au/en/news/all/articles/2022/november/methane-levels-and-the-role-of-
science-in-mitigation
CSIRO (Commonwealth Scientific and Industrial Research Organisation) (n.d., a). Latest Kennaook /
Cape Grim greenhouse gas data. Retrieved from
https://research.csiro.au/acc/capabilities/cape-grim-baseline-air-pollution-station/
CSIRO (Commonwealth Scientific and Industrial Research Organisation) (n.d., b). GASLab/AGGON.
Retrieved from https://research.csiro.au/acc/capabilities/gaslab/
Cusworth, D. H., Duren, R. M., Thorpe, A. K., Olson-Duvall, W., Heckler, J., Chapman, J. W., . . . Miller,
C. E. (2021). Intermittency of Large Methane Emitters in the Permian Basin. Environmental
Science & Technology Letters, 8, 567–573. Retrieved from
https://doi.org/10.1021/acs.estlett.1c00173
DAFF (Department of Agriculture, Fisheries and Forestry) (2023). National Statement on Climate
Change and Agriculture. Retrieved from https://www.agriculture.gov.au/agriculture-land/farm-
food-drought/climatechange/national-statement-on-climate-change-and-agriculture
Daniels, W. S., Wang, J. L., Ravikumar, A. P., Harrison, M., Roman-White, S. A., George, F. C., &
Hammerling, D. M. (2023). Toward Multiscale Measurement-Informed Methane Inventories:
Reconciling Bottom-Up Site-Level Inventories with Top-Down Measurements Using Continuous
Monitoring Systems. Environmental Science & Technology, 11823–11833. Retrieved from
https://doi.org/10.1021/acs.est.3c01121
Day, S., Luhar, A., Etheridge, D., Hibberd, M., Thatcher, M., Loh, Z., . . . Halliburton, B. (2017).
Improving Methods for Quantifying Fugitive Emissions from Open Cut Coal Mining.
https://www.acarp.com.au/abstracts.aspx?repId=C24017
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2020). National
Inventory Report Volume 1: 2018. Retrieved from https://www.dcceew.gov.au/climate-
change/publications/national-greenhouse-gas-inventory-report-2018
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2021). Quarterly
Update of Australia’s National Greenhouse Gas Inventory: September 2020. Retrieved from
https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-gas-inventory-
quarterly-update-september-2020
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2022a). The
Measurement Determination. Retrieved from https://www.dcceew.gov.au/climate-
change/emissions-reporting/national-greenhouse-energy-reporting-scheme#toc_2
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2022b). National
Greenhouse and Energy Reporting Scheme. Retrieved from
https://www.dcceew.gov.au/climate-change/emissions-reporting/national-greenhouse-energy-
reporting-scheme
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2022c). Australian
Energy Update 2022. Retrieved from
https://www.energy.gov.au/sites/default/files/Australian%20Energy%20Statistics%202022%20
Energy%20Update%20Report.pdf

Page | 104
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2022d). Australia's
Guarantee of Origin - policy paper. Retrieved from https://consult.dcceew.gov.au/aus-
guarantee-of-origin-scheme-consultation
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2022e). National
Inventory Report 2020: Volume 2. Retrieved from https://www.dcceew.gov.au/climate-
change/publications/national-inventory-report-2020
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2022f). Setting
baselines under the Safeguard Mechanism. Retrieved from
https://consult.dcceew.gov.au/safeguard-mechanism-reform-consultation-paper
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023a). National
Inventory Report 2021: Volume 1. Retrieved from https://www.dcceew.gov.au/climate-
change/publications/national-inventory-report-2021
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023b). Australia's
National Greenhouse Accounts. Retrieved from
https://www.greenhouseaccounts.climatechange.gov.au/
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023c). Australian
National Greenhouse Accounts Factors: 2022. Retrieved from
https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-accounts-
factors-2022
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023d). Safeguard
Mechanism Reforms Factsheet. Retrieved from https://www.dcceew.gov.au/climate-
change/emissions-reporting/national-greenhouse-energy-reporting-scheme/safeguard-
mechanism
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023e). Safeguard
Mechanism. Retrieved from https://www.dcceew.gov.au/climate-change/emissions-
reporting/national-greenhouse-energy-reporting-scheme/safeguard-mechanism
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023f). Guarantee of
Origin scheme. Retrieved from https://www.dcceew.gov.au/energy/renewable/guarantee-of-
origin-scheme
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023g). Australia’s
Carbon Leakage Review. Retrieved from https://www.dcceew.gov.au/climate-
change/emissions-reduction/review-carbon-leakage
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023h). Australian
Energy Statistics. Retrieved from https://www.energy.gov.au/government-priorities/energy-
data/australian-energy-statistics
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023i). Australian
Energy Update 2023. Retrieved from https://www.energy.gov.au/government-
priorities/energy-data/australian-energy-statistics
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023j). Australia’s
Guarantee of Origin Scheme Design Policy Paper. Retrieved from
https://consult.dcceew.gov.au/aus-guarantee-of-origin-scheme-consultations-on-design

Page | 105
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023k). National
Greenhouse Gas Inventory Quarterly Update: March 2023. Retrieved from
https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-gas-inventory-
quarterly-update-march-2023
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023l). National
Greenhouse and Energy Reporting (NGER) Scheme - 2023 Amendments - Consultation Outcomes
Paper. Retrieved from https://consult.dcceew.gov.au/2023-nger-scheme-proposed-updates
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023m). Paris
Agreement Inventory, 2021. Retrieved Aug 2, 2023, from
https://www.greenhouseaccounts.climatechange.gov.au/
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (2023n). 2023 NGER
Update - Consultation paper. Retrieved from https://consult.dcceew.gov.au/2023-nger-
scheme-proposed-updates
DCCEEW (Department of Climate Change, Energy, the Environment and Water) (n.d.). Australia's
National Greenhouse Accounts, Paris Agreement inventory 2021. Retrieved from
https://www.greenhouseaccounts.climatechange.gov.au/
DECC (Department of Energy & Climate Change) (2014). Mass Balance Guidance. Retrieved from
https://assets.publishing.service.gov.uk/media/5a7cf8b3ed915d28e9f39468/Mass_Balance_Gu
idance.pdf
DEECA (Department of Energy, Environment and Climate Action) (2022). FRD 24 Reporting of
environmental data by government entities. Retrieved from
https://www.dtf.vic.gov.au/sites/default/files/document/FRD%2024%20Reporting%20of%20en
vironmental%20data%20by%20government%20entities.DOCX
DoF (Department of Finance) (2023). APS Net Zero Emissions 2030. Retrieved from
https://www.finance.gov.au/government/aps-net-zero-emissions-2030
Dreger, M., & Kędzior, S. (2021). Methane emissions against the background of natural and mining
conditions in the Budryk and Pniówek mines in the Upper Silesian Coal Basin (Poland).
Environmental Earth Sciences, 80, 746. Retrieved from https://doi.org/10.1007/s12665-021-
10063-4
Dubey, L., Cooper, J., Staffell, I., Hawkes, A., & Balcombe, P. (2023). Comparing satellite methane
measurements to inventory estimates: A Canadian case study. Atmospheric Environment: X, 17,
100198. Retrieved from https://doi.org/10.1016/j.aeaoa.2022.100198
Duren, R. M., Thorpe, A. K., Foster, K. T., Rafiq, T., Hopkins, F. M., Yadav, V., . . . Falk, M. (2019).
California’s methane super-emitters. Nature, 180–184. Retrieved from
https://doi.org/10.1038/s41586-019-1720-3
EPSD Directorate (Environment, Planning and Sustainable Development Directorate) (2022). 2021-22
Minister's Annual Report under the Climate Change and Greenhouse Gas Reduction Act 2010.
Retrieved from https://www.climatechoices.act.gov.au/climate-change/what-the-act-
government-is-doing/ministers-annual-climate-change-report
Erland, B. M., Thorpe, A. K., & Gamon, J. A. (2022). Recent Advances Toward Transparent Methane
Emissions Monitoring: A Review. Environmental Science & Technology, 56, 16567–16581.
Retrieved from https://doi.org/10.1021/acs.est.2c02136

Page | 106
ESA (European Space Agency) (n.d.). Sentinel-5. Retrieved Aug 5, 2023, from
https://sentinels.copernicus.eu/web/sentinel/missions/sentinel-5
Frankenberg, C., Thorpe, A. K., Thompson, D. R., Hulley, G., Kort, E. A., Vance, N., . . . Green, R. O.
(2016). Airborne methane remote measurements reveal heavy-tail flux distribution in Four
Corners region. PNAS, 9734–9739. Retrieved from
http://www.pnas.org/cgi/doi/10.1073/pnas.1605617113
Fraser, P. J., Khalil, M. A., Rasmussen, R. A., & Crawford, A. J. (1981). Trends of atmospheric methane
in the southern hemisphere. Geophysical Research Letters.
https://doi.org/10.1029/GL008i010p01063
Fung, I., John, J., Lerner, J., Matthews, E., Prather, M., Steele, L. P., & Fraser, P. J. (1991). Three-
dimensional model synthesis of the global methane cycle. Journal of Geophysical Research
Atmospheres. Retrieved from https://doi.org/10.1029/91JD01247
GHG Protocol (Greenhouse Gas Protocol) (2022). Scope 3 Frequently Asked Questions. Retrieved from
https://ghgprotocol.org/sites/default/files/2022-12/Scope%203%20Detailed%20FAQ.pdf
GHGSat (n.d.). What we do. Retrieved Aug 5, 2023, from GHGSat: https://www.ghgsat.com/en/what-
we-do/
Government of Canada (2017). Canada Gazette, Part I, Volume 151, Number 52: GOVERNMENT
NOTICES. Retrieved from https://www.gazette.gc.ca/rp-pr/p1/2017/2017-12-30/html/notice-
avis-eng.html#na2
Government of Canada (2020). National Inventory Report 1990–2018: Greenhouse Gas Sources and
Sinks in Canada: Executive Summary. Retrieved from
https://publications.gc.ca/site/eng/9.506002/publication.html
Government of Canada (2023a). Facility greenhouse gas reporting: overview of 2021 reported
emissions. Retrieved from https://www.canada.ca/en/environment-climate-
change/services/climate-change/greenhouse-gas-emissions/facility-reporting/overview-
2021.html
Government of Canada (2023b). Facility-reported greenhouse gas data. Retrieved from
https://www.canada.ca/en/environment-climate-change/services/climate-change/greenhouse-
gas-emissions/facility-reporting/data.html
GreenPower (2023). Renewable Gas Certification Pilot. Retrieved from
https://www.greenpower.gov.au/about-greenpower/renewable-gas-certification-pilot
Hancock Prospecting (2023). Innovating in Agriculture. Retrieved from
https://www.hancockprospecting.com.au/projects/agriculture/
Hendry, J. (2022) Canberra Data Centres tries to keep its emissions data secret. Retrieved from itNews:
https://www.itnews.com.au/news/canberra-data-centres-tries-to-keep-its-emissions-data-
secret-576724
ICAP (International Compliance Assurance Programme) (2014). ICAP ETS Factsheet - Mexico. Retrieved
from https://icapcarbonaction.com/en/ets/mexico
ICOS (Integrated Carbon Observation System) (n.d.). Atmosphere stations. Retrieved from
https://www.icos-cp.eu/observations/atmosphere/stations
IEA (International Energy Agency) (2021). Net Zero by 2050 A Roadmap for the Global Energy Sector.
Retrieved from https://www.iea.org/reports/net-zero-by-2050

Page | 107
IEA (International Energy Agency) (2022). Direct Air Capture 2022. Retrieved from
https://www.iea.org/reports/direct-air-capture-2022
IEA (International Energy Agency) (2023a). Energy Statistics Manual. Retrieved from
https://www.iea.org/about/data-and-statistics/manuals
IEA (International Energy Agency) (2023b). Low-Emission Fuels. Retrieved from
https://www.iea.org/energy-system/low-emission-fuels
IEA (International Energy Agency) (2023c). Global Methane Tracker 2022. Retrieved from
https://www.iea.org/data-and-statistics/data-tools/methane-tracker
IEA (International Energy Agency) (2023d). Strategies to reduce emissions from coal supply. Retrieved
from https://www.iea.org/reports/global-methane-tracker-2023/strategies-to-reduce-
emissions-from-coal-supply
IETA (International Emissions Trading Association) (2018). Mexico: A market based climate policy case
study. Retrieved from
https://ieta.wildapricot.org/resources/Resources/Case_Studies_Worlds_Carbon_Markets/2018
/Mexico-Case-Study-Jan2018.pdf
IPCC (Intergovernmental Panel on Climate Change) (2018). Annex I Properties of CO2 and carbon-
based fuels. Retrieved from https://www.ipcc.ch/site/assets/uploads/2018/03/srccs_annex1-
1.pdf
IPCC (Intergovernmental Panel on Climate Change) (2019a). 2019 Refinement to the 2006 IPCC
Guidelines for National Greenhouse Gas Inventories: Glossary. Retrieved from
https://www.ipcc.ch/report/2019-refinement-to-the-2006-ipcc-guidelines-for-national-
greenhouse-gas-inventories/
IPCC (Intergovernmental Panel on Climate Change) (2019b). 2019 Refinement to the 2006 IPCC
Guidelines for National Greenhouse Gas Inventories, Volume 2: Energy, Chapter 4: Fugitive
emissions. Retrieved from https://www.ipcc-nggip.iges.or.jp/public/2019rf/vol1.html
IPCC (Intergovernmental Panel on Climate Change) (2021). Sixth Assessment Report, WG1, Chapter 7,
Supplementary Material. Retrieved from
https://www.ipcc.ch/report/ar6/wg1/chapter/chapter-7/
IPCC (Intergovernmental Panel on Climate Change) (2022). IPCC Sixth Assessment Report, WGIII,
Climate Change 2022, Mitigation of Climate Change: Summary for Policymakers. Retrieved from
https://www.ipcc.ch/report/ar6/wg3/
Irakulis-Loitxate, I., Guanter, L., Maasakkers, J. D., Zavala-Araiza, D., & Aben, I. (2022). Satellites
Detect Abatable Super-Emissions in One of the World’s Largest Methane Hotspot Regions.
Environmental Science & Technology, 56, 2143−2152. Retrieved from
https://doi.org/10.1021/acs.est.1c04873
International Sustainability Standards Board (ISSB) (2023). IFRS S2 Climate-related disclosures.
Retrieved from https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-
navigator/ifrs-s2-climate-related-disclosures/
Jacob, D. J., Varon, D. J., H, C. D., Dennison, P. E., Frankenberg, C., Gautam, R., . . . Duren, R. M.
(2022). Quantifying methane emissions from the global scale down to point sources using
satellite observations of atmospheric methane. Atmospheric Chemistry and Physics, 9617–
9646. Retrieved from https://doi.org/10.5194/acp-22-9617-2022

Page | 108
Jeswani, H. K., Chilvers, A., & Azapagic, A. (2020). Environmental sustainability of biofuels: a review.
Proceedings of the Royal Societyhttps://doi.org/10.1098/rspa.2020.0351
Johnson, M. R., Conrad, B. M., & Tyner, D. R. (2023). Creating measurement-based oil and gas sector
methane inventories using source-resolved aerial surveys. Communications Earth &
Environment, 2934. Retrieved from https://doi.org/10.1038/s43247-023-00769-7
Luhar, A. K., Etheridge, D. M., Loh, Z. M., Noonan, J., Spencer, D., Smith, L., & Ong, C. (2020).
Quantifying methane emissions from Queensland's coal seam gas producing Surat Basin using
inventory data and a regional Bayesian inversion. Atmospheric Chemistry and Physics, 20,
15487–15511. Retrieved from https://doi.org/10.5194/acp-20-15487-2020
Minister for Climate Change and Energy (2023). pers. comm.
MLA (Meat & Livestock Australia) (2023). Tools and calculators. Retrieved from
https://www.mla.com.au/tools-
calculators?utm_campaign=397283_Digitised%20greenhouse%20gas%20calculator%20coming
%20for%20producers&utm_medium=email&utm_source=Meat%20%26%20Livestock%20Austr
alia&dm_i=4PKB,8IJN,26TNFB,YFB4,1
Motu (2017). Evolution of the New Zealand Emissions Trading Scheme: Sectoral coverage and point of
obligation. Retrieved from https://www.motu.nz/our-research/environment-and-
resources/emission-mitigation/emissions-trading/evolution-of-the-new-zealand-emissions-
trading-scheme-sectoral-coverage-and-point-of-obligation/
MyFootprint (2023). MyFootprint. Retrieved from https://myfootprint.net.au/
NAPCO (North Australian Pastoral Company) (2023). NAPCO: Our story. Retrieved from
https://napco.com.au/our-story/#cattle
NASA (National Aeronautics and Space Administration) (2022). Methane ‘Super-Emitters’ Mapped by
NASA’s New Earth Space Mission. Retrieved from https://www.nasa.gov/feature/jpl/methane-
super-emitters-mapped-by-nasa-s-new-earth-space-mission
NASA (National Aeronautics and Space Administration) (2023). VISIONS: The EMIT Open Data Portal.
Retrieved from https://earth.jpl.nasa.gov/emit/data/data-portal/Greenhouse-Gases/
Neininger, B. G., Kelly, B. F., Hacker, J. M., Lu, X., & Schwietzke, S. (2021). Coal seam gas industry
methane emissions in the Surat Basin, Australia: comparing airborne measurements with
inventories. Phil. Trans. R. Soc. A, 379, 20200458. Retrieved from
https://doi.org/10.1098/rsta.2020.0458
Net Zero Tracker (2023). Net Zero Stocktake 2023. Retrieved from https://zerotracker.net/analysis/net-
zero-stocktake-2023
NFF (National Farmers' Federation) (2023). Submission to Treasury, Climate-related financial
disclosure: second consultation. Retrieved from https://treasury.gov.au/consultation/c2023-
402245
NIES (National Institute for Environmental Studies) (n.d.). GOSAT Project. Retrieved Aug 5, 2023, from
https://www.gosat.nies.go.jp/en/
NOAA (National Oceanic and Atmospheric Administration) (n.d.). Global Monitoring Laboratory.
Retrieved from https://gml.noaa.gov/about/aboutgml.html
NSW DPE (NSW Department of Planning & Environment) (2022). NSW Regional and local greenhouse
gas emissions - Methods paper. Retrieved from
https://www.environment.nsw.gov.au/research-and-publications/publications-search/nsw-

Page | 109
 regional-and-local-greenhouse-gas-emissions-methods-paper
NSW EPA (NSW Environment Protection Authority) (2015). Flaring of gas. Retrieved from
https://www.epa.nsw.gov.au/~/media/EPA/Corporate%20Site/resources/epa/2564-gas-flaring-
fact-sheet.ashx
NSW Government (2023). CASPER. Retrieved from
https://www.environment.nsw.gov.au/casper/Dashboards
OGMP (Oil & Gas Methane Partnership) (2020). OGMP 2.0 REPORTING FRAMEWORK. Retrieved from
https://ogmpartnership.com/presentations-and-others/
OGMP (Oil & Gas Methane Partnership) (2022). Guidance document: Reconciliation and Uncertainty
(U&R) in methane emissions estimates for OGMP 2.0. Retrieved from
https://ogmpartnership.com/guidance-documents-and-templates/
OGMP (Oil & Gas Methane Partnership) (n.d., a). What is OGMP 2.0? A solution to the methane
challenge. Retrieved from https://ogmpartnership.com/a-solution-to-the-methane-challenge/
OGMP (Oil & Gas Methane Partnership) (n.d., b). Company Members. Retrieved from
https://ogmpartnership.com/our-member-companies/
Palmer, P. I., Feng, L., Lunt, M. F., Parker, R. J., Bösch, H., Lan, X., . . . Borsdorff, T. (2021). The added
value of satellite observations of methane for understanding the contemporary methane
budget. Philosophical Transactions A, 379, 20210106. Retrieved from
https://doi.org/10.1098/rsta.2021.0106
Paraway Pastoral Company. (n.d.). Paraway Pastoral Company. Retrieved from
https://www.paraway.com.au/
Pearman, G. I., & Eraser, P. J. (1988). Sources of increased methane. Nature, 489–490. Retrieved from
https://doi.org/10.1038/332489a0
Pearman, G. I., Etheridge, D., de Silva, F., & Fraser, P. J. (1986). Evidence of changing concentrations of
atmospheric CO2, N2O and CH4 from air bubbles in Antarctic ice. Nature, 248–250. Retrieved
from https://doi.org/10.1038/320248a0
Ram, V., & Salkuti, S. (2023). An Overview of Major Synthetic Fuels. Energies, 16(6), 2834.
doi:https://doi.org/10.3390/en16062834
Riddick, S. N., Mauzeralla, D. L., Celia, M. A., Kang, M., & Bandilla, K. (2020). Variability observed over
time in methane emissions from abandoned oil and gas wells. International Journal of
Greenhouse Gas Control, 103116. Retrieved from https://doi.org/10.1016/j.ijggc.2020.103116
RMI (Rocky Mountain Institute) (2023). Clean Energy 101: Methane-Detecting Satellites. Retrieved from
https://rmi.org/clean-energy-101-methane-detecting-satellites/
S.Kidman (2023). Katherine's Phoenix Park gets new owner as a part of Hancock selloff. Retrieved from
https://www.kidman.com.au/katherines-phoenix-park-gets-new-owner-as-a-part-of-hancock-
selloff.
Sadavarte, P., Pandey, S., Maasakkers, J. D., Lorente, A., Borsdorff, T., van der Gon, H. D., . . . Aben, I.
(2021). Methane Emissions from Superemitting Coal Mines in Australia Quantified Using
TROPOMI Satellite Observations. Environ. Sci. Technol., 55, 16573–16580. Retrieved from
https://doi.org/10.1021/acs.est.1c03976

Page | 110
Saint-Vincent, P. M., & Pekney, N. J. (2020). Beyond-the-Meter: Unaccounted Sources of Methane
Emissions in the Natural Gas Distribution Sector. Environmental Science & Technology, 39–49.
Retrieved from https://doi.org/10.1021/acs.est.9b04657
SBTi (Science Based Targets initiative) (2023). Target Dashboard. Retrieved from
https://sciencebasedtargets.org/companies-taking-action#dashboard
Sechman, H., Kotarba, M. J., Kędzior, S., Kochman, A., & Twaróg, A. (2020). Fluctuations in methane
and carbon dioxide concentrations in the near-surface zone and their genetic characterization
in abandoned and active coal mines in the SW part of the Upper Silesian Coal Basin, Poland.
International Journal of Coal Geology, 103529. Retrieved from
https://doi.org/10.1016/j.coal.2020.103529
Shen, L., Gautam, R., Omara, M., Zavala-Araiza, D., Maasakkers, J. D., Scarpelli, T. R., . . . Nesser, H.
(2022). Satellite quantification of oil and natural gas methane emissions in the US and Canada
including contributions from individual basins. Atmospheric Chemistry and Physics, 22, 11203–
11215. Retrieved from https://doi.org/10.5194/acp-22-11203-2022
Sherwin, E. D., Rutherford, J. S., Chen, Y., Aminfard, S., Kort, E. A., Jackson, R. B., & Brandt, A. R.
(2023). Single-blind validation of space-based point-source detection and quantification of
onshore methane emissions. Scientifc Reports, 13:3836. Retrieved from
https://doi.org/10.1038/s41598-023-30761-2
Stanbroke (2023). The Stanbroke Story. Retrieved from https://www.stanbroke.com/the-stanbroke-
story/
State of Queensland (2022). Open data portal: Government operations greenhouse gas emissions 2020-
21. Retrieved from https://www.data.qld.gov.au/dataset/government-operations-greenhouse-
gas-emissions/resource/966b1c25-53e4-4db7-9207-122c0cf1225a
Steele, L. P., Dlugokencky, E. J., Lang, P. M., Tans, P. P., Martin, R. C., & Masarie, K. A. (1992). Slowing
down of the global accumulation of atmospheric methane during the 1980s. Nature, 313–316.
Retrieved from https://doi.org/10.1038/358313a0
Swolkień, J., Fix, A., & Gałkowski, M. (2022). Factors influencing the temporal variability of
atmospheric methane emissions from Upper Silesia coal mines: a case study from the CoMet
mission. Atmospheric Chemistry and Physics, 22, 16031–16052. Retrieved from
https://doi.org/10.5194/acp-22-16031-2022
The Treasury (2023). Climate-related financial disclosure: Second consultation. Retrieved from
https://treasury.gov.au/consultation/c2023-402245
UNEP (United Nations Environment Programme) (2021). Guidelines for Climate Target Setting for
Banks. Retrieved from https://www.unepfi.org/industries/banking/guidelines-for-climate-
target-setting-for-banks/.
UNEP (United Nations Environment Programme) (2022). Coal Mine Methane Science Studies Road
Map. Retrieved from https://www.unep.org/resources/other-evaluation-
reportsdocuments/coal-mine-methane-science-studies-road-map
UNEP (United Nations Environment Programme) (2023). Emissions Gap Report 2023. Retrieved from
https://www.unep.org/resources/emissions-gap-report-2023
UNEP (United Nations Environment Programme) (n.d.). About IMEO. Retrieved from
https://www.unep.org/explore-topics/energy/what-we-do/methane/about-imeo
UNFCCC (United Nations Framework Convention on Climate Change) (1997). Kyoto Protocol to the

Page | 111
 United Nations Framework Convention on Climate Change. Retrieved from
https://unfccc.int/documents/2409
UNFCCC (United Nations Framework Convention on Climate Change) (2018). Decision 18/CMA.1
Modalities, procedures and guidelines for the transparency . Retrieved from
FCCC/PA/CMA/2018/3/Add.2:
https://unfccc.int/sites/default/files/resource/CMA2018_03a02E.pdf#page=18
US EPA (United States Environmental Protection Agency) (2022a). Find and Use GHGRP Data.
Retrieved from https://www.epa.gov/ghgreporting/find-and-use-ghgrp-data
US EPA (United States Environmental Protection Agency) (2022b). Facility Level Information on
GreenHouse gases Tool (FLIGHT). Retrieved from https://ghgdata.epa.gov/ghgp/main.do
US EPA (United States Environmental Protection Agency) (2023). Learn About the Greenhouse Gas
Reporting Program (GHGRP). Retrieved from https://www.epa.gov/ghgreporting/learn-about-
greenhouse-gas-reporting-program-ghgrp
Varon, D. J., Jacob, D. J., McKeever, J., Jervis, D., Durak, B. O., Xia, Y., & Huang, Y. (2018). Quantifying
methane point sources from fine-scale satellite observations of atmospheric methane plumes.
Atmospheric Measurement Techniques, 5673–5686. Retrieved from
https://doi.org/10.5194/amt-11-5673-2018
Wang, J. L., Daniels, W. S., Hammerling, D. M., Harrison, M., Burmaster, K., George, F. C., &
Ravikumar, A. P. (2022). Multiscale Methane Measurements at Oil and Gas Facilities Reveal
Necessary Frameworks for Improved Emissions Accounting. Environmental Science &
Technology, 14743–14752. Retrieved from https://doi.org/10.1021/acs.est.2c06211
Wang, W. C., Yung, Y. L., Lacis, A. A., Mo, T., & Hansen, J. E. (1976). Greenhouse effects due to man-
made perturbation of trace gases. Science, 194, 685-690.
doi:https://doi.org/10.1126/science.194.4266.685
WMO (World Meteorological Organization) (2019). An Integrated Global Greenhouse Gas Information
System (IG3IS) Science Implementation Plan. Retrieved from
https://library.wmo.int/index.php?lvl=notice_display&id=21595#.XbLVqK6Wa70
World Bank (2023). State and Trends of Carbon Pricing 2023. Retrieved from
https://openknowledge.worldbank.org/handle/10986/39796
Zavala-Araiza, D., Lyon, D. R., Alvarez, R. A., Davis, K. J., Harriss, R., Herndon, S. C., . . . Sweeney, C.
(2015). Reconciling divergent estimates of oil and gas. PNAS, 112, 15597–15602. Retrieved
from www.pnas.org/cgi/doi/10.1073/pnas.1522126112
Zhang, Y., Gautam, R., Pandey, S., Omara, M., Maasakkers, J. D., Sadavarte, P., . . . Lorente, A. (2020).
Quantifying methane emissions from the largest oil-producing basin in the United States from
space. Science Advances, 6, eaaz5120. Retrieved from https://doi.org/10.1126/sciadv.aaz5120

Page | 112
Legislative References
All legislation cited in this report is Commonwealth legislation unless otherwise indicated.
Commonwealth legislation can be found on the Federal Register of Legislation: www.legislation.gov.au.
Carbon Credits (Carbon Farming Initiative) Act 2011
Clean Energy Act 2011
Climate Change Act 2022
Climate Change Authority Act 2011
Environment Protection and Biodiversity Conservation Act 1999
Freedom of Information Act 1982
National Greenhouse and Energy Reporting Act 2007
• National Greenhouse and Energy Reporting (Audit) Determination 2009
• National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2019

• National Greenhouse and Energy Reporting (Measurement) Determination 2008

• National Greenhouse and Energy Reporting Regulations 2008
• National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015

Page | 113
Table of Figures
Figure 1.1 The three components of the NGER Act .................................................................................. 11
Figure 2.1 The National Greenhouse and Energy Reporting Act and the supporting legislation ............. 17
Figure 2.2 The number of Safeguard facilities by sector ........................................................................... 26
Figure 3.1 Sectors in Australia’s National Inventory Reports that are informed by NGER data ............... 30
Figure 3.2 The percentage of emissions reported for each sector due to the corporate group energy
consumption threshold being exceeded. .................................................................................................. 37
Figure 3.3 The percentage of emissions reported for various bands of total annual emissions reported
at the corporate group level and the percentage of reporting companies in each band ......................... 38
Figure 3.4 The percentage of energy consumption reported for various bands of total annual energy
consumption reported at the corporate group level and the percentage of reporting companies in each
band ........................................................................................................................................................... 38
Figure 3.5 The percentage of energy production reported for various bands of total annual energy
production reported at the corporate group level and the percentage of reporting companies in each
band ........................................................................................................................................................... 38
Figure 3.6 The percentage of emissions reported for various bands of total annual emissions reported
at the facility level and the percentage of facilities in each band ............................................................. 39
Figure 3.7 The percentage of energy consumption reported for various bands of total annual energy
consumption reported at the facility level and the percentage of facilities in each band ....................... 39
Figure 3.8 The percentage of energy production reported for various bands of total annual energy
production reported at the facility level and the percentage of facilities in each band .......................... 40
Figure 3.9 The total emissions covered, facility-level reporting thresholds and corporate-level reporting
thresholds of various international reporting schemes ............................................................................ 41
Figure 3.10 A comparison of the lifecycle emissions of different combinations of feedstocks and
manufacturing pathways for renewable jet fuel compared to fossil jet fuel............................................ 52
Figure 4.1 The total greenhouse gases reported for the year to March 2023 in the Quarterly Update of
Australia’s National Greenhouse Gas Inventory: March 2023 and the sectoral breakdown of Australia’s
national methane emissions...................................................................................................................... 65
Figure 4.2 Summary of method availability for reporting oil and gas fugitive methane emissions under
the NGER Measurement Determination ................................................................................................... 69
Figure 4.3 Image of methane plumes in the Hunter Valley, New South Wales ........................................ 70
Figure 4.4 An overview of methods used to report fugitive emissions under the NGER scheme in 2021-
22 ............................................................................................................................................................... 74
Figure 5.1 Total emissions covered by the Safeguard Mechanism since its introduction in 2016 ........... 87
Figure 5.2 Emissions from the grid connected electricity sector by year compared with sectoral baseline
................................................................................................................................................................... 88
Figure E.1 Key dates for NGER reporting scheme and the Safeguard Mechanism from 2024 ............... 137
Figure E.2 The regulator’s approach to non-compliance issues ............................................................. 138

Page | 114
Table of Tables
Table 2.1 Scope 1, 2 and 3 emissions. ....................................................................................................... 20
Table 2.2 The proportion of Australia’s emissions captured under the NGER scheme by sector for the
reporting year 2020-21. Total Australian emissions and NGER total reported scope 1 emissions........... 22
Table 2.3 An overview of the methods included in the NGER Measurement Determination.................. 23
Table 2.4 The hybrid industry average/site-specific emissions intensity weighting model to be used for
existing facilities. ....................................................................................................................................... 26
Table 3.1 The NGER scheme reporting thresholds for corporate groups and facilities............................ 35
Table 3.2 The percentage of reporters meeting each threshold and the associated share of emissions
reported in 2021-22................................................................................................................................... 36
Table 3.3 Comparison of different data published under international reporting schemes. ................... 56
Table 3.4 The number of facilities that would exceed a range of potential facility-level publication
thresholds and the proportion of emissions covered. .............................................................................. 59
Table 4.1 Fugitive emissions reported in the 2021 National Inventory, by sector and source ................ 67
Table 4.2 Sadavarte et al estimates of fugitive emissions compared to the total emissions reported per
facility under the Safeguard Mechanism................................................................................................... 72
Table 4.3 Palmer et al. comparison of fugitive emissions and total emissions reported per facility under
the Safeguard Mechanism ......................................................................................................................... 73
Table 4.4 A simplified overview of the estimation and reporting levels of the OGMP 2.0 and MMP
frameworks................................................................................................................................................ 75
Table 5.1 Number of facilities covered by the Safeguard Mechanism each year and usage of compliance
options. ...................................................................................................................................................... 86
Table 5.2 ACCUs and the Safeguard Mechanism ...................................................................................... 87
Table 5.3 Previous recommendations by the authority on the Safeguard Mechanism ........................... 90
Table 6.1 Report submissions and resubmissions for the NGER scheme and the Safeguard Mechanism96
Table 6.2 Audits and audit outcomes for the NGER scheme and Safeguard Mechanism. ....................... 97

Page | 115
Page | 116
Appendix A: Assessment of Costs and Benefits
The Authority is required to have regard to the principles set out in the Climate Change Authority Act
2011 when performing its functions. In addition, the NGER Act requires that the authority, in
formulating a recommendation that the government take particular action, must analyse the costs and
benefits of that action. The table below summarises the potential costs and benefits associated with
the recommendations in this report. Further analyses of the costs and benefits of the recommendations
are made throughout the report.

Recommendation Cost Benefit

Coverage

1 The proportion of each sector’s emissions Costs to monitor each Ensure sufficient
reported under the NGER scheme must, at sector’s emissions emissions and energy
a minimum, be maintained at current reported under the NGER data availability across
levels. scheme. each sector to inform
government and the
public.
a. The NGER scheme be expanded to Costs of reporting for Increased data for
2
include methods for calculating emissions large emitters in the government to develop
from the UNFCCC-defined agriculture and agriculture sector. policy and monitor
land sectors. The government should work progress to assist the
Increase in administrative
with interested parties in the agriculture agriculture sector to
costs to government.
sector on the most appropriate way to reduce emissions.
include these emissions sources under the Cost to government to
Development of
same thresholds as for other sectors and develop method and
emissions calculation
develop robust estimation methods for change legislation.
methodologies that can
facility-level emissions reporting in these
support climate-related
sectors.
financial disclosure
b. Introduce mandatory reporting reporting and farm
requirements for agricultural sector emissions reporting
emissions by the 2026-27 financial year more broadly.
and for land sector emissions by the 2027-
Increased fairness and
28 financial year.
consistency of reporting
between sectors.
Cost to government to Increased consistency
3 Seek agreement with state and territory
investigate constitutional and transparency of
governments on a framework that will
power and change emissions reporting
allow for consistent reporting of emissions
legislation. between government
by government entities. In the absence of
entities.
an agreed framework, the government Increased costs to local
should explore the potential to extend government councils that
coverage of the NGER scheme to are required to report
government entities. emissions from landfill.

Page | 117
 Increased fairness
4 Extend NGER coverage to publicly owned Cost to government for
between privately
landfills where legally possible. development of
owned and publicly
framework.
owned landfills.
Increased costs to
operators of publicly Increased transparency
owned landfills that are of emissions from large
required to report emitters in the waste
emissions. sector.
Eased burden on
5 Undertake a study to investigate the use of Cost of development of
companies required to
the emissions data reported through the guidance and information
report scope 3
NGER scheme to facilitate estimation of on scope 3 emissions
emissions under climate
scope 3 emissions at the entity level in reporting.
related financial
Australia.
disclosure framework.

Consistency of reporting
of scope 3 emissions.

Market-based reporting

6 Develop a framework to approve Costs to undertake Alignment of Australian

certifications that can guarantee the reviews of international and international
renewable status of renewable liquid and renewable fuel certification schemes
gaseous fuels. This framework should be certification schemes. supports engagement
informed by a review of existing with international
General policy
international certification schemes. The trading.
development.
certifications approved under the
Reduces risk of adverse
framework need to guard against adverse
outcomes.
impacts.
Provides assurance that
renewable fuels are
genuinely renewable.
Improves market
confidence and
increases transparency.

7 Introduce optional market-based reporting General policy Greater transparency in

of renewable liquid and gaseous fuels once development. providing accurate
a framework for approving certifications accounting across
Potential cost to collate
for renewable fuels is operational. shared infrastructure.
additional data.
Limits double counting.
Contributes to
decarbonisation by
encouraging the uptake
of renewable fuels.

Page | 118
 8 Engage with the IPCC to create guidance on General policy Encourages uptake of
the definition and emissions factors of development. synthetic renewable
renewable synthetic fuels. Subsequently fuels.
amend the definition for renewable fuels in
the NGER Regulations to include renewable
synthetic fuels once there is clear guidance
from the IPCC.

Transparency
Enable greater use of
9 As a first step in increasing the Administrative cost to the
the publicly available
transparency of the NGER data, the NGER regulator.
data.
scheme requires that the regulator publish,
starting with data for the 2023-24 financial
Increased transparency.
year, the following data at the facility level
for facilities which produce annual
emissions greater than or equal to 5,000 t
CO2-e:
a. Scope 1 emissions by greenhouse gas
as a consistent time-series.
b. Scope 2 emissions as a consistent time-
series.
c. The method used in each financial year
to estimate scope 1 and scope 2
emissions.

10 Resource the regulator to publish relevant Administrative cost to the Improve the
NGER datasets through an application regulator. accessibility and
programming interface (API) so that users usefulness of the data
can download and programmatically query for all users.
the data using their own software. This
Reduce overall costs to
should be implemented for the publication
governments and the
of the 2024-25 NGER data.
public for data analysis.
11 Resource the regulator to improve the Administrative cost to the Improve the
accessibility and usefulness of the regulator. accessibility and
published data by exploring opportunities usefulness of the
to present data in additional formats on its publicly available data.
website. This should be implemented for
Enable greater use of
the publication of the 2024-25 NGER data.
the publicly available
data.
Increase transparency.
12 Resource the regulator to collect the Administrative cost to the
necessary information from reporters such regulator.
that it can link facilities reported under the Reduce overall costs to
NGER scheme across time. users for data analysis.

Page | 119
Confidentiality

13 Monitor the future utilisation of section 25 Administrative cost to the Ensure provisions strike
of the NGER Act and whether it is government. appropriate balance
impacting upon the overall effectiveness of between transparency
the publication regime in section 24 of the and information
Act. protection.

14 Consider measures to provide additional Cost to government from Reduce administrative

guidance and streamline the process for policy process, legislative cost to the regulator.
making and deciding non-publication change and
applications under section 25 of the NGER implementation.
Act, including through legislative Reduce administrative
amendment if needed. cost to applicants.

Increasing the accuracy of reported fugitive methane emissions in the NGER scheme

15 Phase out Method 1 estimation Cost of collecting data for Improved accuracy of
methodologies for fugitive methane scheme users. reported emissions
emissions, including as a matter of urgency estimates.
for the extraction of coal in open cut coal
Improved integrity of
mining.
the NGER scheme.
Improved
understanding of
emissions abatement
opportunities.

16 Resource the department to establish Administrative cost to the Improved accuracy of

higher order methods for all fugitive regulator. reported emissions.
methane emission sources included in the
Measurement Determination.
17 As a matter of urgency, review Method 2 Administrative cost to the Improved accuracy of
for extraction of coal in open cut coal regulator. reported emissions.
mining with respect to sampling
requirements and standards.

18 Review the requirement for integrated gas Administrative cost to the Improved accuracy of
facilities to use the same method across regulator. reported emissions.
activities to allow for flexibility to use
higher order methods for larger emission
sources, while ensuring integrity of
estimated emissions.

Page | 120
19 Commission a panel of Australian and Administrative cost to the Improved accuracy of
international experts to establish a best regulator. reported emissions.
practice process to document the
R&D costs to DCCEEW. Improved reliability of
standards and requirements for making
reported emissions.
transparent, repeatable and credible top-
down measurements of fugitive methane
emissions from Australian facilities. This
panel should evaluate whether any further
research studies are needed and should be
resourced to conduct required studies. The
panel of experts should be commissioned
in the first quarter of 2024, and the
guidelines for making top-down
verification measurements published as
soon as practicable.
20 Develop a top-down verification policy Administrative cost to the Improved accuracy of
framework for the verification of bottom- regulator. reported emissions.
up estimates of fugitive methane emissions
Cost of collecting data for Improved reliability of
reported under the NGER scheme. This
scheme users. reported emissions.
should be phased in on a trial basis as soon
as practicable, with mandatory verification
using top-down measurements
commencing the year after. If any
discrepancies are found between bottom-
up estimates obtained using an NGER
method and the top-down verification
measurement, the bottom-up
measurement approach should be refined
by the reporting entity to reconcile the
emission estimates.
21 Determine the appropriate requirements Administrative cost to the Improved accuracy of
to be met for future use of satellite regulator. reported emissions.
technology in detection of fugitive
methane emissions, and for verification of
estimated fugitive methane emissions.
22 Prioritise and support the development of Administrative cost to Improved accuracy of
Australia’s sovereign capability in methane DCCEEW. reported emissions.
emissions measurement and
Improved accuracy of
quantification, by building on existing
national emissions
expertise and leveraging international
inventory.
partnerships where appropriate.
Improved capability to
measure emissions.

Page | 121
Administration and compliance

23 Authorise the regulator to deregister Administrative costs to Reduced ongoing

corporations in liquidation from the NGER the regulator. administrative costs to
scheme on the regulator’s own initiative to the regulator.
Cost to government to
reduce the administrative burden for the
change framework.
regulator.

24 Require corporations that meet reporting Administrative costs to Reduced ongoing

thresholds to provide reports for all years the regulator. administrative costs to
following their trigger year, regardless of the regulator.
Cost to government to
when they register, to ensure
change legislation. Improved data
completeness of the NGER datasets.
collected.

25 Update the NGER scheme to replace Administrative costs to Reduced ongoing

references to a corporation’s ‘trading the regulator. administrative costs to
name’ with ‘registered business name’. the regulator.
Cost to government to
change framework.

Page | 122
Appendix B: International Reporting Schemes
A summary of requirements for international reporting schemes.

Jurisdiction of Scheme Commenced Gases Industry sectors Scope National Threshold

operation covered covered emission
covered

California Regulation for 2007 CO2, N2O, Electricity Scope 1 80% No threshold for
the mandatory CH4, SF6, generation, cement electricity
Scope 2
reporting of NF3, Other production, lime generation, cement
greenhouse fluorinated manufacturing, production, lime
gas emissions GHG nitric acid manufacturing,
(MRR) emissions production, nitric acid
petroleum refining, production,
geologic petroleum
sequestration, refineries, geologic
injection of carbon sequestration of
dioxide carbon dioxide,
injection of carbon
dioxide

10,000 t CO2-e for

other reporters

Canada Greenhouse 2004 CO2, N2O, Stationary fuel Scope 1 43% 10,000 t CO2-e
Gas Reporting CH4, SF6, combustion,
Program NF3, HFCs, industrial process
(GHGRP) PFCs emissions, No threshold for
industrial product any facility
use emissions, engaged in CO2
fugitives, on-site capture, CO2
transportation, transport, CO2
waste, wastewater injections, CO2
storage

European European 2005 CO2, N2O, Domestic aviation, Scope 1 38% Variable by sector
Union Union PFCs industry, power
Emissions
Trading
Scheme (EU
ETS)

Japan Mandatory 2006 CO2, CH4, Electricity Scope 1 50% 3,000 t CO2-e
Greenhouse N2O, SF6, generation, fossil
Scope 2
Gas NF3, HFCs, fuel exploration,
Accounting PFCs industrial
and Reporting processes,
Framework agriculture, waste

123
Mexico National 2014 CO2, CH4, Energy, industry, Scope 1 40% 25,000 t CO2-e
Registry of N2O, SF6, transport,
Scope 2
Emissions NF3, HFCs, agriculture,
PFCs, CFCs, commercial and
HCFCs, waste sectors
black
carbon

New Zealand Emissions 2008 CO2, CH4, Liquid fossil fuels, Scope 1 52% Variable by sector
Trading N2O, SF6, stationary energy,
Scheme HFCs, PFCs industrial
processes,
agriculture, forestry

Republic of GHG and 2011 CO2, CH4, Energy, industrial Scope 1 74% 15,000 t CO2-e
Korea Energy Target N2O, SF6, processes, domestic (facility)
Scope 2
Management HFCs, PFCs aviation, transport,
Scheme waste, buildings

Singapore Measurement 2013 CO2, CH4, Fuel combustion, Scope 1 80% 2,000 t CO2-e
and Reporting N2O, SF6, industrial (facility)
Requirements HFCs, PFCs processes, product
for use
Greenhouse
Gas Emissions

United Streamlined 2019 CO2, CH4, Publicly traded Scope 1 More than 250
Kingdom energy and N2O, SF6, companies employed, more
Scope 2
Carbon HFCs, PFCs than 40 million
Reporting euros or assets of
20 million euros

Listed on EU
regulated market

United States Greenhouse 2010 CO2, CH4, Energy, industrial, Scope 1 85-90% 25,000 t CO2-e
Gas Reporting N2O, SF6, manure
Program HFCs, PFCs, management,
(GHGRP) other waste, natural gas, Some
fluorinated suppliers of downstream
gases (not industrial
CFC or greenhouse gases,
HCFC) injection of CO2 and
geologic
sequestration

Page | 124
Appendix C: Recommendations from the Authority’s 2018 Review
and Government Response
NGER scheme (Australian Government, 2019)

Recommendation Government Government action

response
R.1 The department and The government The Clean Energy Regulator will work with the
regulator analyse accepted this Department of the Environment and Energy to
opportunities for data recommendation. analyse data sharing opportunities to reduce
sharing between the duplicated data being reported under both
reporting scheme and the the National Pollutant Inventory and the
National Pollutant Inventory Petroleum and Other Fuels Reporting program
and the Petroleum and and the NGER scheme.
Other Fuels Reporting
program, and work with the
Australian Bureau of The regulator has an arrangement in place to
Statistics on opportunities share NGER data with the Australian Bureau of
to share data with the Statistics, and is exploring other opportunities
Energy, Water and that could lower the burden for businesses
Environment Survey. that report to both agencies.

R.2 The department examine The government Voluntary certifications against the Australian
whether there are efficiency noted this Government’s National Carbon Offset
gains in having the regulator recommendation. Standard are increasing and the Department
administer the reporting for of the Environment and Energy is streamlining
carbon neutral certification the reporting and administrative requirements
against the National Carbon for carbon neutral certified entities. The
Offset Standard. department will consider whether there could
be a role for the Clean Energy Regulator to
support reporting for carbon neutral
certification.
R.3 To the extent possible, the The government The government is currently using existing
government align the noted this Australian aviation legislation to require
compliance framework and recommendation. eligible Australian international airlines to
administrative satisfy the most immediate needs of CORSIA,
arrangements for the including monitoring, reporting and
Carbon Offsetting and verification of emissions data. The
Reduction Scheme for Department of Infrastructure, Transport,
International Aviation with Cities and Regional Development continues to
those established under the work in consultation with the Department of
National Greenhouse and the Environment and Energy, the Clean Energy
Energy Reporting legislation. Regulator and interested stakeholders to
develop a longer-term strategy to fulfil
Australia’s obligations under CORSIA, including
management of offsetting obligations.

125
R.4 The regulator and The government The Clean Energy Regulator is committed to
government data users accepted this publishing more NGER data trends and
continue to work together recommendation. information so that others can understand
to clarify what data is and use this valuable data set. The regulator
available and how it can be opened a new Reporting Hub in June 2019.
shared and used more The Reporting Hub allows data users to access
efficiently data more efficiently and the regulator has
provided additional filtered data reports
which allow more efficient analysis of certain
data attributes.

The regulator is continuing to engage with

government data users to better understand
their data needs and priorities and to
determine how they can be incorporated into
existing data sharing arrangements.
R.5 The regulator consult widely The government The feasibility of the timing proposed in this
with reporters to progress accepted-in- recommendation will be determined following
developments to the principle this consultation by the Clean Energy Regulator
Emissions and Energy recommendation. with NGER reporters, and assessment of the
Reporting System, with a impact on the regulator’s IT Roadmap
view to enabling data to be priorities. The regulator has developed and
easily uploaded and initiated the CER Digital Portal and Website
downloaded by reporters Baseline User Research Plan, which seeks to
and greater use of pre-fill identify ways to improve the user experience
data, in time for the 2020– across all digital services, including users of
21 reporting year the Emissions and Energy Reporting System.
The timing of any changes will be contingent
on resourcing and government priorities.
R.6 The regulator continue to The government The Clean Energy Regulator will explore long-
develop its long-term accepted this term opportunities for data sharing across
information technology recommendation. schemes administered by the regulator and
systems and services within government. The regulator will also
roadmap to increase build a common portal for current and future
opportunities for data energy and emissions reporting schemes that
sharing across schemes, it administers, and for any schemes that it
including working with may operate on behalf of other agencies.
other program
The regulator is open to considering and
administrators, and consider
discussing opportunities that may arise to
the benefits and costs of
collaborate with other program administrators
developing a common
in terms of a common reporting portal for
reporting portal for existing
broader energy and emissions schemes.
and future energy and
emissions reporting
schemes.

Page | 126
R.7 The department enhance The government The Department of the Environment and
the current process for accepted this Energy undertakes an annual review of the
implementing updates to recommendation. measurement determination. It will work with
the measurement the Clean Energy regulator to improve the
determination by consulting transparency of the review process, including
earlier with industry, in relation to stakeholder consultation and
increasing transparency on communication of updates to the legislation.
how issues will be resolved
and working with the
regulator to better publicise
updates
R.8 The regulator work with the The government An analysis of 2017-18 NGER data has
department to enhance accepted this identified that 73% of all reporters could have
understanding among recommendation. used at least one streamlining provision in the
reporters and auditors (in legislation. The Clean Energy Regulator has
time for the 2019–20 developed an engagement plan to educate
reporting year) about the these reporters on the streamlining provisions
existing provisions in the available to them and will commence
legislation that can reduce engagement by the end of July 2019. This plan
the costs of reporting on will include making more explicit guidance and
small sources of emissions information for auditors and reporters on
and energy. In addition, the reporting on small sources of emissions and
department should work energy available through its website and
closely with the regulator regular outreach program.
and industry to
systematically review
provisions, and their
administration, that apply to
small sources of emissions
and energy to assess if
further improvements can
be made to reduce
reporting costs while
meeting the objectives of
the reporting scheme.

R.9 The department amend the The government

measurement noted this
determination, in recommendation.
consultation with industry,
to include emissions from

Page | 127
 agricultural sources to allow
reporting on a voluntary
basis. Voluntary reporting of
agricultural emissions
should be reviewed after
five years
R.10 The department examine The government The Department of the Environment and
opportunities to improve noted this Energy will further explore this
the quality of data available recommendation. recommendation in consultation with
on aerosols and indirect interested stakeholders
greenhouse gases (including
black carbon) by assessing
the merits of including these
substances in the reporting
scheme.
R.11 The department undertake The government The Department of the Environment and
analysis to determine noted this Energy will further explore this
whether the benefits of recommendation. recommendation in consultation with
extending the reporting interested stakeholders.
scheme to Australian, and
state and territory
government agencies and
local councils exceed the
costs (for those that do not
currently report under the
scheme)
R.12 The department test the The government The Department of the Environment and
feasibility of optional accepted this Energy will test the feasibility of different
reporting for scope 2 recommendation. options for reporting scope 2 emissions (from
emissions (from electricity electricity use) that accounts for direct
use) that accounts for direct sourcing of low-emissions energy. It will aim
sourcing of low-emissions to consider the outcomes of the feasibility
energy assessment in the context of the 2019-20
annual review of the NGER measurement
determination.

R.13 The regulator, supported by The Government The Clean Energy Regulator intends to
the department, be noted this progressively improve data quality
allocated funding to recommendation. requirements within the Emissions and Energy
enhance the dataset for Reporting System as funds become available
time series analysis. The to ensure that reporters take responsibility for
dataset should be updated submitting accurate data and to reduce the
each year within three future need for data refinement activities.
months of the data being
Refining a subset of the NGER data has

Page | 128
 reported, for use by commenced through a project under the Data
Australian governments. and Integration Partnership for Australia
funded by the Department of the Prime
Minister and Cabinet and further refinement
work on time series analysis for the remaining
dataset is underway in the regulator.
R.14 The government legislate The government The Department of the Environment and
arrangements to ensure the accepted this Energy will investigate the most appropriate
regulator retains its ability recommendation. mechanism to ensure that this information
to disseminate emissions can continue to be disseminated and
and energy information published.
obtained prior to 2 April
2012 and Australian
Government ministers and
agencies retain their ability
to publish this information.
R.15 The regulator identify ways The government The Clean Energy Regulator has commenced
to better meet data users’ accepted this engagement with data users to identify their
needs by publishing more recommendation. needs and priorities. Based on this
detailed analyses of key information the regulator will progressively
findings and trends, publish more useful key findings and trends.
increasing the volume of Several new data publications and a review of
data reported publicly and data on the regulator’s website has already
improving the presentation been planned for later in 2019.
of data on the website.

Page | 129
Safeguard Mechanism (Australian Government, 2019)

Recommendation Government Government Action

response
R.16 The regulator update The government In March 2019, the government amended the
baselines to reflect changes accepted in part Safeguard Rule to make it simpler and fairer.
to the measurement this As facilities transition to calculated baselines
determination that lead to recommendation during 2018-19 and 2019-20, these baselines
a material difference in will reflect the latest measurement
reported emissions. determination. The amendments introduce
an option to use default emissions intensity
values to set baselines. Default values will be
updated to reflect material changes to the
measurement determination. Baselines for
facilities using the default values will
therefore reflect these changes. Facilities
have the option to use default emissions
intensity values at any time.
R.17 The regulator continue to The government In March 2019, the government amended the
pursue opportunities to accepted this Safeguard Rule to require the regulator to
increase information recommendation. publish additional information regarding the
available about the market likely demand for Australian Carbon Credit
for Australian Carbon Units (ACCU) from Safeguard facilities with a
Credit Units. multi-year monitoring period. The first new
publication will be delivered at the same time
as other annual publication requirements
under the Safeguard Mechanism (expected in
March 2020).
In addition, the Clean Energy Regulator has
commenced publishing regular ACCU Market
Updates. The regulator’s first ACCU Market
Update was published in December 2018. It is
intended that these updates be published
regularly to provide a more transparent
picture of supply and demand in the market.
Consistent with the government’s response
to the Climate Change Authority’s 2017
review of the Emissions Reduction Fund, the
government is pursuing an amendment to
the Australian National Registry of Emissions
Units Act 2011 to provide for regular
publication of Australian carbon credit unit
holdings. This will help market liquidity and
transparency for the Emissions Reduction

130
 Fund and Safeguard Mechanism.
R.18 The department investigate The government The government is committed to reducing
the feasibility and potential accepted this Australia’s emissions using the Emissions
uptake of allowing recommendation. Reduction Fund. The Fund provides a broad
safeguard facilities to range of opportunities to reduce emissions
participate in the Emissions across the economy, including from facilities
Reduction Fund in a way covered by the Safeguard Mechanism. The
that recognises reductions government is interested in reducing barriers
in indirect emissions to participation in the Fund, including
without resulting in an addressing any potential barriers to
increase in reported direct participation from Safeguard facilities and
emissions. addressing disincentives for facilities to
reduce their indirect emissions.
The Department of the Environment and
Energy intends to look at options to
distinguish between activities that reduce
indirect emissions and those that reduce
direct emissions. This will seek to overcome
the existing barriers for Safeguard facilities to
pursue projects that reduce indirect
emissions through the Fund.
The government is pursuing an amendment
to the National Greenhouse and Energy
Reporting Act 2007 to facilitate this outcome.
R.19 The government remove The government The government notes there may be
the option for deemed notes this occasions where Safeguard facilities have
surrender under the recommendation. both a regulatory requirement to surrender
safeguard. Australian Carbon Credit Units and a
contractual obligation to transfer Australian
Carbon Credit Units to the government (for
which payment is received). Any change to
the current arrangements would constitute a
change in policy. As outlined in the
government’s 2017 Review of Climate
Change Policies, the role of the Safeguard
Mechanism will be reviewed in 2020 in the
context of progress towards the 2030 Paris
Agreement target. This review provides an
opportunity to consider policy settings, such
as deemed surrender.

Page | 131
Administration and Compliance (Australian Government, 2019)

Recommendation Government Government Action

response
R.20 The regulator continue to The government The Clean Energy Regulator is
work with reporters and accepted this progressively maturing its audit function
auditors to better target recommendation. to better target reporters and areas of
compliance audits interest and to increase transparency for
reporters. The regulator regularly
to ensure integrity of the
conducts engagement and outreach
data and reduce costs to
events for auditors and also receives
business.
valuable feedback through surveys and
directly from clients to inform this
process.

132
Appendix D: Method Availability for Reporting Fugitive Methane
Under the NGER Scheme
Summary of method availability for activities for reporting fugitive methane emissions under the NGER
Measurement Determination (Measurement Determination). Incidental emissions are reported using
general principles outlined in section 1.13 of the Measurement Determination.

Method Availability
Source
1 2 2A 3 4
Part 3.2 Coal mining
Division 3.2.2 Underground mines
Pre-mining venting or fugitive release – – – – Yes
Extraction of coal – – – – Yes
Flaring of coal mine waste gas Yes Yes – – –
Post-mining activities Yes – – – –
Division 3.2.3 Open cut mines
Pre-mining venting or fugitive release – – – – Yes
Extraction of coal Yes Yes – Yes –
Flaring of coal mine waste gas Yes – – – –
Division 3.2.4 Decommissioned underground mines
Decommissioned underground mine emissions Yes – – – Yes
Flaring of coal mine waste gas Yes – – – –
Part 3.3 Oil and natural gas
Division 3.3.2 Oil or gas exploration and development
Emissions that are flared Yes – Yes – –
System upsets, accidents and deliberate releases Yes – – – Yes
Division 3.3.3 Crude oil production
Crude oil production (non-flared) – fugitive leak emissions Yes Yes – Yes –
Crude oil production (flared) Yes – Yes – –
Crude oil production (non-flared) – fugitive vent emissions Yes – – – Yes
Division 3.3.4 Crude oil transport
Crude oil transport (non-flared) Yes Yes – – –
Division 3.3.5 Crude oil refining
Crude oil refining and storage tanks Yes Yes – Yes –
Process vents, system upsets and accidents Yes – – – Yes
Crude oil refining (flared) Yes – Yes – –
Division 3.3.6A Onshore natural gas production (other than emissions that are vented or flared)
Wellheads Yes Yes – Yes –
Division 3.3.6B Offshore natural gas production (other than emissions that are vented or flared)
–
Offshore platforms Yes Yes – Yes

Division 3.3.6C Natural gas gathering and boosting (other than emissions that are vented or flared)

Page | 133
Natural gas gathering and boosting Yes Yes – Yes –
Division 3.3.6D Produced water from oil and gas exploration and development, crude oil production, natural
gas production or natural gas gathering and boosting (other than emissions that are vented or flared)
Produced water Yes Yes – – –
Division 3.3.6E Natural gas processing (other than emissions that are vented or flared)
Natural gas processing Yes Yes – Yes –
Division 3.3.7 Natural gas transmission (other than emissions that are flared)
Natural gas transmission Yes Yes – Yes –
Division 3.3.7A Natural gas storage (other than emissions that are vented or flared)
Natural gas storage Yes Yes – Yes –
Division 3.3.7B Natural gas liquefaction, storage and transfer (other than emissions that are vented or flared)
Natural gas liquefaction, storage and transfer Yes Yes – Yes –
Division 3.3.8 Natural gas distribution (other than emissions that are flared)
Natural gas distribution Yes Yes – Yes –
Division 3.3.9A Natural gas production (emissions that are vented or flared)
Emissions that are vented Yes – – – Yes
Emissions that are flared Yes – Yes – –
Division 3.3.9B Natural gas gathering and boosting (emissions that are vented or flared)
Emissions that are vented Yes – – – –
Emissions that are flared Yes – Yes – –
Division 3.3.9C Natural gas processing (emissions that are vented or flared)
Emissions that are vented Yes – – – –
Emissions that are flared Yes – Yes – –
Division 3.3.9D Natural gas transmission (emissions that are flared)
Emissions that are flared Yes – Yes – –
Division 3.3.9E Natural gas storage (emissions that are vented or flared)
Emissions that are vented Yes – – – –
Emissions that are flared Yes – Yes – –
Division 3.3.9F Natural gas liquefaction, storage or transfer (emissions that are vented or flared)
Emissions that are vented Yes – – – –
Emissions that are flared Yes – Yes – –
Division 3.3.9G Natural gas distribution (emissions that are flared)
Emissions that are flared Yes – Yes – –

Page | 134
Appendix E: Safeguard Mechanism and Administration and
Compliance
The Safeguard Mechanism
Under the Safeguard Mechanism, facilities are required to ensure their net scope 1 emissions do not
exceed their baseline set by the Clean Energy Regulator (the regulator).
Baseline decline rate
The recent reforms also introduced the requirement for baselines to decline in a predictable and
gradual way that is consistent with achieving Australia’s emissions reduction target of 43% below 2005
levels by 2030 and net zero by 2050.
The decline rate is set at 4.9% each year until 2030 and applies to both new and existing Safeguard
facilities. A reserve has been built into this decline rate to allow for any higher than expected
production growth (at new and existing facilities) or use of trade exposed baseline adjustments. Decline
rates for 2030-31 onwards will be set in five-year blocks, following updates to Australia’s Nationally
Determined Contribution.
There is tailored treatment for emissions intensive, trade exposed businesses to ensure they are not
competitively disadvantaged and emissions do not leak overseas. Within the recent reforms, the
objects of the NGER Act have been amended to ensure that ‘the competitiveness of trade-exposed
industries is appropriately supported as Australia and its regions seize the opportunities of the move to
a global net zero economy’. This includes a subset of trade exposed facilities, which face increased risk
of carbon leakage, being eligible for a discounted decline rate.
Safeguard Mechanism Credits (SMCs)
The reforms also introduced the ability for Safeguard facilities to generate Safeguard Mechanism
Credits (SMCs) when their reported gross scope 1 emissions are below their baseline. Each credit issued
represents 1 t CO2-e below the baseline in a particular financial year. SMCs incentivise Safeguard
facilities to reduce their emissions below their baselines (CER, 2023c).
Facilities that fall below the Safeguard threshold of 100 kt CO2-e can continue receiving SMCs for up to
10 years (noting their baseline will continue to decline) as long as they are covered by the Safeguard
Mechanism for at least: i) 3 years between 2017 to 2022; or ii) 3 in 5 years before the facility started
receiving credits.
ACCU Scheme projects that solely reduce emissions at Safeguard facilities are no longer able to be
registered, however projects that were already registered before the passage of the reforms legislation
on 30 March will continue to generate and sell credits until the end of the existing crediting period
(DCCEEW, 2023d).
Complying with the Safeguard Mechanism
Under the Safeguard Mechanism, facilities must ensure their net scope 1 emissions do not exceed their
baseline. A facility’s net scope 1 emissions is defined as the gross scope 1 emissions, less any
surrendered domestic offset credits.
Domestic offset credits that can be surrendered include:

• Australian Carbon Credit Units (ACCUs)

• Safeguard Mechanism Credits (SMCs).

Page | 135
If a facility surrenders ACCUs to more than 30% of its baseline it must also submit a statement to the
regulator detailing why on-site abatement has not been undertaken.
Facilities can surrender SMCs to meet their own obligations, sell to other Safeguard facilities or hold
onto them for future use. Facilities can use SMCs in any year up to 2030, irrespective of when they
were issued, giving companies flexibility around the timing of their abatement activities.
A facility can also apply for a multi-year monitoring period (MYMP) of up to five years where it has
exceeded its baseline but has a credible plan to reduce the cumulative emissions before the end of the
five-year period. This provides facilities with additional time to implement abatement activities that will
result in below-baseline emissions in later years. This is available up until 2030. A facility can only earn
SMCs at the end of the monitoring period.
Until 2030, a facility may also apply to borrow up to 10% of its baseline number from the following
year, which is to be repaid with 10% interest in the year following the borrowing (the interest rate is set
at 2% for the first two years of the reformed Safeguard Mechanism to allow time to adjust and support
early investment in on-site abatement).
Facilities that exceed their baseline may also apply to the regulator to purchase ACCUs at a fixed price.
The price of these ACCUs is set at $75 in 2023-24 and will be indexed in future financial years by the
Consumer Price Index plus an additional 2% per annum (DCCEEW, 2023d). The government expects
there to be sufficient ACCUs and SMCs available in the market below this price. However, this measure
is intended to prevent excessive prices and to provide certainty to facilities on the maximum
compliance costs they would face (DCCEEW, 2023d).
2026-27 Review of the Safeguard Mechanism
The government has committed to review the reformed Safeguard Mechanism in 2026-27 to ensure
the policy settings are appropriate (DCCEEW, 2023d). The review will include the initial impacts of
resetting and declining baselines; the costs and availability of domestic offsets; the appropriate
treatment of international units; the suitability of arrangements for emissions intensive, trade exposed
activities; and the treatment of flexibility mechanisms beyond 2030, such as banking and borrowing and
multi-year monitoring periods.
As part of the review, the authority will advise the government on the extent to which on-site
abatement is being driven by the reforms, and whether any additional incentives are required.

Page | 136
 Key dates under the legislation
Figure E.1 outlines the key dates for the reporting scheme and Safeguard Mechanism from 2024 onwards (noting dates for 2023 are slightly different due to the
reformed Safeguard Mechanism coming into effect on 1 July 2023).

28 Feb
Borrowing
15 Apr
application
deadline. The regulator
30 Apr 15 Nov The regulator is must publish the
1 Sep required to publish required
Deadline to submit Multi-year corporate group information on
application for The regulator sets monitoring period safeguard facilities
level data for the
emissions-intensity reported (MYMP) application previous financial for the previous
determination. baselines. deadline. year. financial year.

APR AUG SEP OCT NOV JAN FEB MAR APR

31 Aug 31 Oct 31 Jan 31 Mar

Companies are Deadline for Deadline to surrender
required to register submitting NGER SMC issuance Australian Carbon
for the reporting reporting including application. Credit Units (ACCUs)
scheme for the safeguard production and Safeguard
previous financial data for the previous Mechanism credits
year if the reporting financial year and (SMCs) to meet
threshold is EITE status baselines and avoid
exceeded for the application. exceeding baseline
first time.
number for the
previous financial
year.
Figure E.1 Key dates for NGER reporting scheme and the Safeguard Mechanism from 2024

Page | 137
Administration and compliance
The Department of Climate Change, Energy, the Environment and Water (the department) and the
regulator both play a role in the governance of the legislation. The department has formal oversight of
the scheme and is responsible for policy development for the NGER scheme and the Safeguard
Mechanism, amending the legislation based on consultation with the public and industry stakeholders,
and conducting the annual review of the NGER Measurement Determination.
The regulator implements the NGER Act, its legislative instruments and related policies and processes
(CER, 2022j). This includes compliance and enforcement with the reporting scheme and the Safeguard
Mechanism through education, monitoring and enforcement tools (CER, 2022k).
The regulator uses an intelligence-led risk-based approach in determining the appropriate response
where a suspected compliance issue exists. Figure E.2 provides an overview of the regulator’s response
continuum to non-compliance issues (CER, 2022k).

Voluntary Accidental non- Opportunistic non- Intentional non-

compliance compliance compliance compliance
Participant’s attitude to compliance

• Informed • Not yet • Resistance to • Deliberate non-

self-assessment compliant compliance compliance
• Management is • Attempting • Lack of • Criminal intent
compliance- compliance (e.g. indication of or fraud
oriented developing intention to • Other illegal
internal comply (e.g. no activity
systems) indication of
• Impact is low systems in place
• Non-systemic to ensure
compliance)

Low risk High risk

Help and support Inform and advise Correct behaviour Enforce

• Make ongoing • Provide • Respond to • Revoke,

compliance easy additional detected non- deregister,
Clean Energy Regulator’s response

(e.g. through guidance to compliance suspend, initiate

releasing targeted according to investigations,
guidelines and participants severity (e.g. pursue civil action
hosting • Provide feedback accepting or refer any
discussion on adequacy of enforceable relevant cases for
forums) systems to ensure undertakings) criminal
• Use proactive compliance • Publish prosecution
outreach to information on • Publish
better enforcement information on
understand activities enforcement
capabilities to activities
comply

Figure E.2 The regulator’s approach to non-compliance issues.

Page | 138
The regulator finds the level of awareness of reporting obligations across industry to be relatively high.
As part of the regulator’s compliance and enforcement framework it takes a proactive approach
through education and monitoring to provide advice and support to companies to prevent non-
compliance.
Education
The regulator recognises that education and engagement are important to ensure companies are aware
of potential obligations they may have under the scheme and are equipped with the knowledge to
meet those obligations. To help drive this preventative approach the regulator:

• provides comprehensive guidance and information online on how the scheme works and what
participants can do to comply with scheme requirements

• publishes further information resources such as factsheets, booklets, brochures, newsletters,

calculators and online resources

• co-designs and collaborates with scheme participants and stakeholders on the development of
guidance and guidelines to provide clarity on compliance expectations.
Monitoring
The regulator also conducts ongoing monitoring as part of its preventative approach to non-
compliance. The regulator uses data collected through its own business operations, in addition to public
information and information received from third parties to assist in monitoring compliance through
activities such as:

• comparing reports from scheme participants to third party data (e.g. regarding electricity
generation, greenhouse gas emissions or abatement)

• identifying behavioural trends within and across the schemes

• identifying changes and activities across relevant industries and sectors
• detecting possible contraventions and deciding whether enforcement action is required.
Where there is suspected non-compliance, the regulator uses relevant information where possible to
assess the intent of the behaviour and take the appropriate compliance action such as:

• exercising coercive information-gathering powers

• conducting inspections and audits

• executing monitoring warrants.

Page | 139
Page | 140