Australia: Implications Of The National Greenhouse And Energy Reporting Act 2007 And Australia´s Ratification Of The Kyoto Protocol

Last Updated: 1 May 2008

As you are no doubt aware, the Australian Government ratified the Kyoto Protocol on 3 December 2007, and became a full member at the end of March 2008. The ratification commits Australia to complying with the Protocol's many obligations and we anticipate that this will lead to new environmental legislation and the amendment of current legislation. Importantly, the legislation is likely to establish a national emissions trading scheme by 2010.

The first step is the new National Greenhouse and Energy Reporting Act 2007 which establishes a national system for reporting greenhouse gas emissions, abatement actions, and energy consumption and production by specific corporations.

Mandatory Registration

The NGERA requires certain corporations to register and comply with mandatory reporting. Corporations who will be caught are those whose operations meet any of the following thresholds:

a. the total amount of greenhouse gases emitted from facilities controlled by members of the relevant corporate group as a carbon dioxide equivalent of:

  1. for the financial year beginning on 1 July 2008 - 125 kilotonnes or more;
  2. for the financial year beginning on 1 July 2009 - 87.5 kilotonnes or more; or
  3. for any later financial year - 50 kilotonnes or more;
b. the total amounts of energy produced or consumed by facilities controlled by members of the relevant corporate group is
  1. for the financial year beginning on 1 July 2008 - 500 terajoules or more;
  2. for the financial year beginning on 1 July 2009 - 350 terajoules or more; or
  3. for any later financial year - 200 terajoules or more; or
c. an entity in the relevant corporate group has operational control of a facility the operation of which during the year causes:
  1. emission of greenhouse gases that have a carbon dioxide equivalence of 25 kilotons or more;
  2. production of energy of 100 terajoules or more; or
  3. consumption of energy of 100 terajoules or more.

A terajoule is 10 12 J, or a million million joules.

NGERA s 7 defines "greenhouse gas" as meaning:

  1. carbon dioxide; or
  2. methane; or
  3. nitrous oxide; or
  4. sulphur hexafluoride; or
  5. a hydrofluorocarbon of a kind specified in the regulations; or
  6. a perfluorocarbon of a kind specified in the regulations.

and carbon dioxide equivalents of an amount of greenhouse gas as meaning, of an amount of greenhouse gas, the amount of gas multiplied by a value specified in the regulations in relation to that kind of greenhouse.

NGERA leaves details of the reporting system, and much else, to be established by regulations, yet to be promulgated.

Any corporate group that is likely, over the financial year beginning 1 July 2008, to meet - or even come near to meeting - any of the group thresholds in (a)(i) or (b)(i) above or the single facility facility threshold in (c) above needs to be in a position to measure its emissions etc. from that date.

Voluntary Registration For Greenhouse Gas Reduction

Under NGERA s 14, a controlling corporation that is not required to register under s 12 may apply to be registered if the corporation, or one or more members of its group, are undertaking or proposing to undertake a greenhouse gas project. A greenhouse gas project is defined in s 7 as meaning an activity or series of activities:

  1. designed to remove or reduce the emission of greenhouse gases; and
  2. which meet the requirements specified in regulations.

Consequences Of Contravention

Contravention of the registration, reporting and other requirements of NGERA attracts heavy penalties on the relevant corporation and on anyone else who aids, abets or is knowingly concerned in the contravention. Importantly and unusually, NGERA also imposes derivative liability for the contravention specifically on the corporation's CEO.

Further Advice And Assistance

If there is any likelihood that your business will be subject to NGERA's registration and reporting requirements, we would be pleased to provide you with advice and assistance about your obligations under that legislation and/or in respect of the proposed emissions trading regime.


Natalie Bannister

t (03) 9252 2507



Andrew Lind

t (02) 9931 4816


Anthony Whealy

t (02) 9931 4867


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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