Complying with greenhouse and energy reporting

As the 2009/10 financial year comes to a close, corporations are busy with their financial reporting requirements. The end of the fiscal year also signifies the approach of greenhouse gas and energy reporting deadlines under the National Greenhouse and Energy Reporting Act 2007 (NGER Act), 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 focused 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 ie, 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 ie, 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
• 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:

Table 1: Approximate 2009/10 corporate threshold triggers.

One of these ‘quantities’ or ‘costs’ alone would likely trigger a threshold. Any corporation approaching the figures mentioned above should seek further advice.

Table 2: Approximate facility level threshold triggers.

Aside from the existing complexities within the NGER legislation, additional legislative requirements have been applied this reporting year, including the requirement to report uncertainty⁸ 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 also directs CEOs to arrange for “regular and professional assessments of a corporation’s compliance”.

Matt Drum is a Senior Environmental Consultant at Ndevr in the newly established Environmental Consulting division assisting client companies with their compliance needs related to the National Greenhouse and Energy Reporting (NGER) legislative framework. Drum was previously an Assistant Director within the Greenhouse and Energy Reporting Office of the Department of Climate Change and played a key role in developing the NGER Regulations 2008, subsequently writing the NGER Guidelines.

 

 

 

References:

1 Large users are likely to gain lower rates than those used to calculate the above amounts. These figures are a guide only and should not solely be relied upon to determine threshold triggers.

2 Rounded amount based on the AEMO average spot price Victoria 2009/10, $36.33/MWh.

3 Rounded amount assuming national average weighted price of $1.325/litre, w/e 27/06/2010 (AIP) – excluding Fuel Tax Credit.

4 In this instance, ‘consumptionÂ’ of bitumen would be laying of bitumen or mixing with asphalt.

5 In this instance, ‘productionÂ’ of coal is extraction of coal from open-cut or underground mine.

6 Rounded amount based on the AEMO average spot price Victoria 2009/10, $36.33/MWh.

7 Rounded amount assuming national average weighted price of $1.325/litre, w/e 27/06/2010 (AIP) exc. Fuel Tax Credits.

8 Although this is legislated, the GEDO has stated he will not be enforcing the uncertainty provision for 09/10.