Background information on the National Greenhouse Emissions Reporting Act 2007 (NGER) »
Which organizations are bound by NGER? »
Getting you NGER ready »
NGER CHECKLIST - Are you NGER ready? »
Non-Compliance – Corporations, Directors and CEO liabilities »
The Federal Government’s commitment to ensuring that Australian businesses play their part in reducing the impact of global warming is evidenced by the introduction of the National Greenhouse Emissions Reporting Scheme [NGERs].
The NGER Act introduced a single national framework for the reporting and dissemination of information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations.
NGERs is specifically designed to avoid the calamitous experience of the European Union Emissions Trading Scheme where many businesses wildly over-estimated their carbon footprints in order to benefit from the issue of free permits. Without a reliable carbon baseline, many businesses received more free permits than necessary. The over-supply caused the price of carbon permits to dramatically fall.
The Federal Government is keen to ensure stability and certainty in the potential market for carbon permits under the proposed CPRS. NGERs is designed to support this aim.
NGERs has been in place since 1 July 2008 and those entities initially captured by the legislation are due to report in October 2009 on the first twelve months.
As with the proposed CPRS, reporting obligations cover not only carbon dioxide emissions [CO2] but five other types of greenhouse gases (methane, nitrous oxide, perflurocarbons, hydroflurocarbons and sulphurhexafluoride).
NGERs imposes a new and complex reporting framework for many business which are caught in the net. Because the Act requires an assessment not only of a corporations emissions but also the energy produced and/or energy consumed, the legislation will not only apply to emissions intensive industries such as electricity generation, mining, smelting and manufacturing but also to industries responsible for large greenhouse gas emissions upstream (due for instance to their electricity use).
Organisations such as larger transport companies, property developers, construction companies, Universities, banks, large retailers, and even large service industry firms, may be bound if their energy bills were high enough.
The Act is also particularly challenging for larger entities with complex corporate structures, changes in ownership during the reporting period or industrial processes on multiple sites.
Climate Capital has a team of professionals with expertise in the complex and evolving area of climate change who can provide practical advice on how climate change will impact your business.
Climate Capital offers a unique, whole-of-business solution for clients as a result of our service alliance with a number of specialised groups.
Climate Capital provides businesses which are already within the NGERs net and are likely to come within the net with:
Together we have created checklists, legislation guides and training material to help clients navigate their way through the maze of climate legislation. Should you be interested in learning more about these effective tools please contact us.
Please review our basic guide to NGER compliance:
Some key questions for businesses contemplating the application of NGERs include:
| Do you know all your emission sources and energy/production/consumption activities? |
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| Do you know which of these emission sources and energy/production/ consumption activities need to be reported? Namely: • Scope 1 (direct) and Scope 2 (indirect) emissions of any of the following 6 types of greenhouse gases:
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| Are adequate systems and technology in place to accurately measure emissions or consumption? |
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| Are there any single facilities within your organization which exceed 25kt/100TJ of emissions, energy production or consumption per annum in 2008/09? |
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| Did your Group’s emissions, energy production or consumption exceed 125kt/500TJ per annum in 2008/09? (NOTE: Thresholds at the Corporate level will reduce each year over the next 3 years, hence an increasing number of Corporations will be required to register and report.) |
| Is registration complete? | |
| Has the organisations “corporate structure” been clearly defined for the Group? |
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| Have all “facilities” been identified? | |
| Have you correctly identified who has the reporting obligation (ie operational control)? In other words, who owns the emissions? (This is particularly critical to determine if your corporate operations involve contractors, subcontractors, tenants, landlords and/or property managers or projects are structured using partnerships, joint ventures or unit trusts). |
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| Have you assessed the impact the new definitions “operational control” and “facilities” under the Act will have on current and future contracts – including commercial tenant/landlord leases and supply arrangements? |
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| Are measurement models in place which comply with the Act to enable accurate, reliable and transparent reporting? |
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| Has a reporting framework been developed? | |
| Have you assessed and included all relevant contractor activities? | |
| Have you assessed and included all relevant fugitive emissions? | |
| Are you aware of the record keeping, confidentiality and disclosure obligations? |
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| Have credible auditors been engaged? | |
| Are you aware of the corporate and personal penalties for non-compliance? | |
| Are your CEO and Board adequately covered by the Due Diligence defence? | |
| Has the legislation been cross-referenced to other compliance and risk requirements that the business might currently face (including existing EPA reporting requirements and the business impacts of NGER’s reporting considered more widely? |
A failure to comply with the NGER Act can result in fines of $220,000 for companies. Chief executives can be held personally responsible for failing to report, failing to keep required records or providing false information with DAILY penalties of $11,000 for each day of non-compliance.
A failure to address these issues will not only leave organisations open to significant corporate and personal liabilities but may also jeopardise corporations competitive advantage and adversely affect investor and financial institutional confidence.
Climate Capital can help you answer these questions and ensure ongoing compliance.
It’s not just about compliance……
The introduction of legislation such as the NGER Act and the Carbon Pollution Reduction Scheme will not just affect organizations compliance obligations. It will have a very real and significant impact on organizations budgeting, strategic direction, marketing and public relations programmes, valuation and governance systems (risk, compliance and wider board policies).
There are also investment opportunities arising from the schemes.
We have a range of climate change specialists in the areas of:
This ‘one stop shop’ service avoids the need for our clients to have to independently assess and source a wide range of legitimate experts in the area and is proven to be a lot more cost effective and less interruptive to business.