The Carbon Border Adjustment Mechanism (CBAM)
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In this article we’ll explore what the CBAM is, why it’s been created, and what importers need to know ahead of its introduction.
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The National Greenhouse and Energy Reporting (NGER) Scheme
Level
Tracking and reducing greenhouse gas emissions has become a major focus for businesses worldwide. In Australia, the National Greenhouse and Energy Reporting (NGER) Scheme is the backbone of corporate emissions reporting, requiring companies to disclose their greenhouse gas emissions, energy production, and energy consumption.
Introduced in 2007 under the NGER Act, the scheme was designed to improve transparency, ensure accurate emissions tracking, and help Australia meet its climate commitments. It applies to large companies that exceed certain emissions or energy thresholds, with reporting managed by the Clean Energy Regulator (CER).
For businesses, NGER compliance isn’t just about meeting legal obligations - it’s also about managing risk and preparing for a low-carbon future. The data reported under NGER is used to track corporate carbon footprints, support sustainability strategies, and align with global climate reporting standards.
In this article, we’ll break down how the NGER Scheme works, who it applies to, what businesses need to report, and how it fits into Australia’s broader climate policies.
What is the NGER scheme?
The National Greenhouse and Energy Reporting (NGER) Scheme is Australia’s national framework for tracking greenhouse gas emissions and energy use. Established under the National Greenhouse and Energy Reporting Act 2007 (NGER Act), the scheme was introduced to create a consistent and reliable reporting system for businesses operating in Australia.
“ The NGER Scheme requires large corporations to report their emissions and energy data annually to the Clean Energy Regulator (CER). This data is then used to monitor national emissions, inform climate policy, and support Australia’s transition to a low-carbon economy. ”
Why was NGER introduced?
Before the NGER Scheme, corporate emissions reporting in Australia was fragmented, with no standardised approach. The NGER scheme was designed to:
- Increase transparency in corporate emissions reporting.
- Ensure accurate emissions data to guide national climate policy.
- Support businesses in understanding and managing their carbon footprint.
- Lay the foundation for future climate policies, such as the Safeguard Mechanism, which places emissions limits on large emitters.
Who oversees the NGER scheme?
The Clean Energy Regulator (CER) is responsible for administering the scheme, ensuring compliance, and enforcing penalties for companies that fail to meet their reporting obligations. The CER also manages the Emissions and Energy Reporting System (EERS), the online platform where businesses submit their data.
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Who needs to report under NGER?
Not all businesses in Australia are required to report under the National Greenhouse and Energy Reporting (NGER) Scheme. The scheme applies specifically to companies that exceed certain emissions or energy thresholds, ensuring that reporting focuses on the largest emitters.
NGER reporting thresholds
Businesses must register and report under NGER if they meet or exceed the following annual thresholds:
Facility-level and corporate-level thresholds:
| Threshold Type | Greenhouse Gas Emissions (tCO₂e) | Energy Consumption (TJ) |
|---|---|---|
| Facility-Level | 25,000+ | 100+ |
| Corporate-Level | 50,000+ | 200+ |
- Facility-level threshold: If a single facility (such as a factory, mine, or power plant) emits 25,000 tonnes or more of CO2 equivalent (tCO2e) or consumes or produces 100 terajoules (TJ) or more of energy, it must be reported.
- Corporate-level threshold: If a corporation’s combined facilities exceed 50,000 tCO2e or 200 TJ, it is required to register under NGER.
Which businesses need to report?
Industries with high energy use and emissions are most likely to meet NGER thresholds, including:
- Mining, oil, and gas
- Electricity generation
- Manufacturing and heavy industry
- Transport and logistics
- Large-scale agriculture and forestry
Companies that fall under these categories must register with the Clean Energy Regulator (CER) and submit emissions data annually.
What happens if a business fails to report?
Failure to comply with NGER obligations can result in significant penalties, including:
- Financial penalties: Companies that fail to register or report can face fines under the NGER Act.
- Reputational damage: Non-compliance can lead to public scrutiny, affecting a company’s ESG (Environmental, Social, and Governance) rating.
- Legal consequences: The CER has the authority to investigate and enforce compliance, with potential legal action against businesses that fail to report accurately.
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NGER reporting requirements
“ When a company meets the National Greenhouse and Energy Reporting (NGER) Scheme thresholds, it must submit detailed emissions and energy data to the Clean Energy Regulator (CER) every year. Reporting under NGER follows a standardised framework, ensuring transparency and accuracy in corporate emissions disclosures. ”
What data must be reported?
Businesses required to report under NGER must track and disclose the following information:
Key NGER reporting data:
| Reporting Category | Description |
|---|---|
| Scope 1 emissions | Direct greenhouse gas emissions from company operations, such as fuel combustion or industrial processes. |
| Scope 2 emissions | Indirect emissions from purchased electricity, heat, or steam. |
| Energy production | Energy generated and sold, including renewable and non-renewable sources. |
| Energy consumption | Total energy used within business operations, including fuel, electricity, and gas. |
How does NGER reporting work?
- Annual reporting cycle: Businesses must submit their NGER data by October 31st each year, covering the previous financial year (July 1st to June 30th).
- Submission through EERS: Companies report their data through the Emissions and Energy Reporting System (EERS), the online platform managed by the Clean Energy Regulator (CER).
- Accuracy and compliance: Businesses must ensure their data is complete, accurate, and in line with CER guidelines to avoid compliance issues.
How NGER links to other climate regulations
“ The National Greenhouse and Energy Reporting (NGER) Scheme plays a central role in Australia’s broader climate policies and aligns with international sustainability reporting standards. The emissions data collected under NGER helps shape regulatory decisions, corporate sustainability strategies, and Australia’s pathway to net zero. ”
The Safeguard Mechanism
The Safeguard Mechanism, introduced in 2016, is designed to limit emissions from Australia’s largest polluters by setting baselines for companies emitting over 100,000 tCO2e per year.
- How it works: Businesses already reporting under NGER must ensure their emissions stay within government-imposed baselines. If they exceed their limit, they must purchase carbon offsets or reduce emissions.
- Who it applies to: Heavy industries, including mining, oil and gas, electricity generation, and manufacturing, are the primary sectors affected.
- Why it matters: The mechanism leverages NGER data to ensure that Australia’s largest polluters actively manage and reduce their emissions over time.
NGER and global ESG reporting trends
As sustainability reporting becomes more internationally standardised, NGER plays an important role in aligning Australian companies with global ESG expectations.
- Corporate Sustainability Reporting Directive (CSRD): The EU’s CSRD requires large businesses to report on climate-related risks and emissions, with stricter standards than NGER. Australian businesses with operations in the EU may need to comply with both NGER and CSRD requirements.
- Task Force on Climate-Related Financial Disclosures (TCFD): Many Australian companies voluntarily align their NGER reporting with TCFD recommendations, particularly for investor disclosures.
- Science-Based Targets initiative (SBTi): Companies looking to set emission reduction targets often use NGER data as a foundation for their decarbonisation strategies.
NGER’s role in Australia’s net zero policies
Australia has committed to reaching net zero emissions by 2050, and the NGER Scheme is a key tool in tracking corporate progress.
- Setting emissions baselines: NGER provides accurate, real-time data on Australia’s emissions, helping policymakers assess progress toward national targets.
- Identifying high-emissions sectors: Governments use NGER data to target key industries for emissions reduction initiatives, such as renewable energy incentives or carbon pricing mechanisms.
- Supporting corporate decarbonisation: Businesses required to report under NGER often use their data to set internal emissions reduction goals and transition to lower-carbon operations.
“ With increasing pressure on companies to disclose climate risks and emissions performance, NGER is an essential tool for corporate climate strategy and sustainability leadership. ”
Challenges in NGER reporting
Meeting the National Greenhouse and Energy Reporting (NGER) Scheme requirements can be complex, especially for businesses with multiple facilities, high energy use, or complex operations. Many companies face challenges in data collection, accuracy, and compliance, which can lead to reporting errors or penalties.
Common challenges businesses face
- Complex emissions calculations: Businesses must accurately measure Scope 1 and Scope 2 emissions, which can be technically demanding, especially in industries with high energy consumption.
- Difficulty in tracking energy use: Companies operating across multiple locations or facilities may struggle to consolidate energy data into a single, reliable report.
- Ensuring data accuracy: Errors in emissions reporting can lead to compliance risks, financial penalties, and reputational damage if data is incomplete or miscalculated.
How businesses can overcome these challenges
To streamline compliance, many companies invest in carbon management solutions, like Greenly’s, that automate:
- Data collection: Integrating real-time energy and emissions data.
- Emissions calculations: Applying correct conversion factors and methodologies.
- NGER reporting: Ensuring businesses meet reporting deadlines and accuracy requirements.
“ By leveraging automation and digital solutions, businesses can reduce the risk of errors, improve efficiency, and ensure their NGER compliance aligns with regulatory expectations and sustainability goals. ”
Best practices for NGER compliance
For businesses reporting under the National Greenhouse and Energy Reporting (NGER) Scheme, meeting compliance requirements means ensuring accuracy, efficiency, and consistency. A well-structured approach to emissions tracking not only helps businesses avoid penalties but also improves overall sustainability performance.
1. Centralise data collection
Many businesses struggle with fragmented data across multiple locations, making reporting time-consuming and prone to errors. A centralised system ensures consistency and reliability.
- Use a single platform to track emissions and energy consumption across all sites.
- Ensure all teams follow the same data collection process to avoid inconsistencies.
- Set up automated data feeds where possible to reduce manual input errors.
2. Standardise reporting processes
Each facility within a company may track emissions differently, leading to inconsistencies. A standardised reporting process keeps data accurate and comparable.
- Create clear internal guidelines on how emissions and energy data should be recorded.
- Train all staff involved in data collection and reporting to ensure they understand NGER requirements.
- Establish a quality control process to check reports before submission.
3. Perform regular internal reviews
Errors in emissions reporting can lead to non-compliance, reputational risks, and financial penalties. Businesses should routinely check their data before submitting reports.
- Compare emissions data with energy bills, fuel records, and operational reports to identify discrepancies.
- Conduct spot checks on data sources to ensure accuracy.
- Keep records of past reports to track trends and catch anomalies.
4. Assign clear accountability
When emissions reporting is managed by multiple teams, responsibilities can become unclear. Defining clear roles helps streamline the process.
- Assign a designated compliance officer to oversee NGER reporting.
- Ensure senior management is involved to reinforce accountability.
- Encourage cross-department collaboration between operations, sustainability, and finance teams.
5. Use third-party verification
Independent verification isn’t mandatory under NGER, but it can improve credibility and accuracy.
- External auditors can help validate reported emissions data and flag inconsistencies.
- Verified reports enhance corporate transparency, which is valuable for investors and stakeholders.
- Third-party checks ensure the company is meeting best practices in emissions tracking.
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What about Greenly?
Navigating NGER compliance can be complex, especially for businesses managing emissions data across multiple facilities. Greenly’s carbon management solution helps businesses measure, track, and manage their emissions efficiently - supporting compliance with NGER reporting requirements.
How Greenly helps with NGER compliance
Comprehensive Emissions Tracking
- Centralises emissions and energy data for better visibility across operations.
- Helps businesses calculate Scope 1, 2, and 3 emissions using standard methodologies.
Streamlined Carbon Accounting
- Automates emissions calculations to reduce the risk of errors.
- Uses verified emissions factors to ensure accurate reporting.
Reporting Support
- Generates structured emissions data that can be used to support NGER submissions.
- Helps businesses prepare auditable emissions records to ensure reporting accuracy.
Sustainability Insights Beyond Compliance
- Identifies high-emissions areas to help businesses develop targeted reduction strategies.
- Supports broader corporate sustainability goals by aligning with global ESG frameworks.
By using Greenly’s platform, businesses can save time, reduce reporting complexity, and improve emissions tracking, turning NGER compliance into an opportunity for smarter sustainability decisions. Get in touch with us today to find out more.
Sources
- Greenly, Carbon Emissions: What You Need to Know, https://greenly.earth/en-gb/blog/ecology-news/carbon-emissions-what-you-need-to-know
- Department of Climate Change, Energy, the Environment and Water (DCCEEW), National Greenhouse and Energy Reporting Scheme (NGERS), https://www.dcceew.gov.au/climate-change/emissions-reporting/national-greenhouse-energy-reporting-scheme
- Australian Government, National Greenhouse and Energy Reporting Act 2007, https://www.legislation.gov.au/C2007A00175/latest/versions
- Clean Energy Regulator, Homepage, https://cer.gov.au/
- Greenly, Does Transparency Benefit or Harm Your Company?, https://greenly.earth/en-gb/blog/company-guide/does-transparency-benefit-or-harm-your-company
- DCCEEW, Safeguard Mechanism, https://www.dcceew.gov.au/climate-change/emissions-reporting/national-greenhouse-energy-reporting-scheme/safeguard-mechanism
- Greenly, Our Guide to Understanding an ESG Score, https://greenly.earth/en-gb/blog/company-guide/our-guide-to-understanding-an-esg-score
- Greenly, What is Carbon Offsetting and Removal?, https://greenly.earth/en-gb/blog/company-guide/what-is-carbon-offsetting-and-removal
- Greenly, What is the Corporate Sustainability Reporting Directive (CSRD)?, https://greenly.earth/en-gb/blog/company-guide/what-is-the-corporate-sustainability-reporting-directive-csrd
- Greenly, TCFD Standards: All You Need to Know, https://greenly.earth/en-gb/blog/company-guide/tcfd-standards-all-you-need-to-know
- Greenly, What is the Science-Based Targets Initiative (SBTi)?, https://greenly.earth/en-gb/blog/company-guide/what-is-the-science-based-targets-initiative-sbti
- DCCEEW, Net Zero Emissions, https://www.dcceew.gov.au/climate-change/emissions-reduction/net-zero
- Greenly, What is Renewable Energy and Why is it Beneficial?, https://greenly.earth/en-gb/blog/company-guide/what-is-renewable-energy-and-why-is-it-beneficial
- Greenly, Greenhouse Gas Emissions: Scopes 1, 2, and 3, https://greenly.earth/en-gb/blog/company-guide/greenhouse-gas-emissions-scopes-1-2-and-3
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