Greenhouse Gas Reporting – A Guide to the NGER Framework
The National Greenhouse Gas and Energy Reporting Act 2007 (NGER Act), alongside its supporting regulations[1] and the measurement determination[2] (together, the NGER Framework), serves as Australia’s national framework for reporting and publishing information regarding greenhouse gas (GHG) emissions, energy production, and energy consumption.
The following definitions have been simplified and will be adopted in this article:
· controlling corporation is a constitutional corporation that does not have a holding company incorporated in Australia;
· corporate group is the controlling corporation and any subsidiaries of the controlling corporation;
· emissions are the release of GHG into the atmosphere as a direct result of activity;
· energy production is the extraction or production of energy;
· energy consumption is the use or disposal of energy, and
· facility is an activity or series of activities that involve emissions, energy production or energy consumption that form a single undertaking or enterprise.
The NGER Framework is designed to inform government policy, meet international obligations, and streamline reporting by avoiding state-level duplication.
Determining Your Obligation – The Threshold Test
The compliance with the NGER Framework begins with registration.
Controlling corporations must apply to be registered if the corporate group meet specific thresholds during a financial year.
The applicable thresholds are based on carbon dioxide equivalence (CO2e), a standardised metric achieved by multiplying the mass of a specific gas by its specified regulatory value, known as its global warming potential.
The thresholds are summarised below:
(a) corporate group level – the group emits 50 kilotonnes or more of CO2e, or produces or consumes 200 terajoules or more of energy.
(b) facility level – emits of 25 kilotonnes or more of CO2e, or produce or consumes 100 terajoules or more of energy while under the operational control of a member of the corporate group. [3]
Meeting any one of the thresholds in any financial year triggers the requirement for the controlling corporation to apply for registration by no later than 31 August of the following financial year.
The Reporting Process
One consequence of registration is mandatory reporting under section 19 of the NGER Act. The report relates to greenhouse gas emissions, energy production and energy consumption.
Reports must detail both scope 1 emissions (which are the direct release of gases from activities constituting the facility), and scope 2 emissions (which are emissions resulting from the generation of electricity, heating, or cooling consumed by the facility but produced elsewhere).
To satisfy the Clean Energy Regulator (the Regulator), corporate groups must include specific information as dictated by two primary instruments being the National Greenhouse and Energy Reporting Regulations 2008 (Cth) and Ministerial Determinations.
Reports must be submitted within four months of the end of each financial year, being 31 October.
The Safeguard Mechanism – Regulating Large Facilities
For Australia’s largest emitters, the NGER framework introduces the Emissions Reduction Safeguard Mechanism (Safeguard Mechanism).
The Safeguard Mechanism applies to designated large facilities, which are facilities where facility’s Scope 1 emissions exceed the thresholds set in the National Greenhouse Energy Reporting (Safeguard Mechanism) Rule 2015 (Safeguard Rules). The Safeguard Rules state the current threshold to be 100,000 tonnes of CO2e per year.
The person with operational control of a large designated facility, known as the responsible emitter, has a legal duty to ensure that an “excess emissions situation” does not exist at the end of any monitoring period in order to avoid financial penalties. An excess emissions situation occurs if a facility does not keep its net emissions below a specific limit, known as a baseline.
A facilities’ baseline is calculated by reference to the facilities production quantities, emissions-intensity values for each product produced at the facility and the baseline decline rate.
The purpose of the baseline decline rate is to incrementally reduce the baseline (emissions limit) of large industrial emitters.
To remain compliant, responsible emitters may reduce their net emissions number by surrendering prescribed carbon units, such as Australian carbon credit units (known as ACCUs) or safeguard mechanism credit units (known as SMCs).
Assuring Compliance & Penalties
Transparency is maintained through GHG and energy audits. The Regulator may appoint an auditor if they suspect a breach.
Records must be retained for at least five years from the end of each reporting year to allow the Regulator to verify compliance.
Penalties for non-compliance include fines for initial breaches and can also include daily penalties for ongoing non-compliance, for example failing to provide a required report may lead to:
(a) an initial fine of up to 2,000 penalty units (approximately $660,000 as of January 2026); and
(b) an additional fine of up to 100 penalty units for every day the report remains outstanding (approximately $33,000 per day as of January 2026).
Repeated occurrences of non-compliance may also lead to an unsatisfactory compliance record, which can impact a corporation’s standing and increase regulatory scrutiny.
Conclusion
The NGER Framework and Safeguard Mechanism are complex, and the penalties of non-compliance are large.
Compliance with the Safeguard Mechanism requires active management of emissions baselines and reporting obligations to avoid substantial penalties.
Entities must ensure their internal systems are robust, that they maintain a five-year audit trail and meet the strict reporting and safeguard deadlines.
[1] National Greenhouse and Energy Reporting Regulations 2008
[2] National Greenhouse and Energy Reporting (Measurement) Determination 2008
[3] Operational control is the legal authority to introduce and implement operating, health and safety, and environmental policies for that facility.