21 July 2010 – With the approach of greenhouse gas and energy reporting deadlines, senior environmental consultant at  Ndevr. Matt Drum has compiled a document detailing the requirements for corporations liable under the National Greenhouse and Energy Report (NGER) Act.

Complying with the National Greenhouse and Energy Reporting Act for 2009-10

The end of the financial year is important not just for financial and accounting reasons but it also signifies the approach of greenhouse gas and energy reporting deadline under the National Greenhouse and Energy Reporting (NGER) Act 2007, where corporations over a certain size are required to report their emissions and energy by 31 October.

Corporations that reported for the first time last year will agree the legislation is complex and filled with ‘grey’ areas and complying can be onerous. The NGER regulator, the Greenhouse and Energy Data Officer (GEDO) is likely to be more focussed on compliance for this second reporting year and penalties of up to $220,000 plus $11,000 per day (ongoing) can be applied for serious non-compliance. Despite the uncertainty around the Carbon Pollution Reduction Scheme, the NGER legislation is still well and truly in effect. Corporations need to move early and decisively to ensure they are ready for the 2009/10 NGER reporting year.

After the first year of reporting, the Department of Climate Change Energy Efficiency
(DCCEE) noted instances where reporters had failed to apply the legislation
appropriately. Some of the key errors include:

• Incorrect reporting of electricity production and consumption – particularly ‘splitting’ electricity produced for internal use and external supply

• Incorrect use of ‘units’ for activity data i.e. entering a ‘litre’ amount of diesel and
selecting ‘kilolitres’

• Incorrect reporting of energy production and consumption

• Corporations not heeding validation warnings in OSCAR

• Incorrect use of methods i.e. not using a higher order ghg estimation method
when the legislation specifically requires it

• State and territory indicators not correctly used – this will cause emissions to be incorrectly calculated as state based factors vary

• Oils and greases and other smaller emissions sources not being reported (including small contractors where appropriate)

• ANZSIC codes and geo-coordinates not used correctly; and

• Not identifying and explaining ‘part-year operational control’ Businesses whose emissions and energy were below the 2008/09 corporate thresholds need to be aware that thresholds have decreased from 125 kilotonnes (kt) and 500 terajoules (TJ) of emissions and energy to 87.5 kt and 350 TJ for the 2009/10 reporting year. Facility thresholds remain at 25 kt and 100 TJ. Corporations triggering the 2009/10
thresholds must register to report by 31 August 2010. ‘Table 1’ applies some real-life metrics to the 2009/10 corporate thresholds for some of the more common emissions and energy sources:

One of these ‘quantities’ or ‘costs’ alone would likely trigger a threshold. Any corporation approaching the figures mentioned above should seek further advice. Aside from the existing complexities within the NGER legislation, additional legislative requirements have been applied this reporting year, including the requirement to report uncertainty and mandatory audits. Audits will likely focus on high risk areas where non- compliance is suspected and/or inconsistencies between corporations from similar industry sectors are noted. Although the GEDO is unlikely to pursue issues of ‘accidental’ non-compliance in the early days, these issues or errors are recorded and form part of a corporation’s compliance history going forward. Section 48 of the NGER Act 2007 also directs CEO’s to arrange for ‘regular and professional assessments of a corporation’s compliance’.