Australia: CPRS Extends NGER Act Obligations Beyond Constitutional Corporations

Key Points:
Although an entity may not incur reporting obligations under the current NGER Act, it may be required to report by virtue of the operation of the CPRS.

The Carbon Pollution Reduction Scheme (CPRS) Bill contains a hidden catch. Entities which are not currently bound by the National Greenhouse Energy Reporting Act 2007 (NGER Act) may find themselves caught out if they are not prepared to meet the dual obligations of acquitting permits under the CPRS and reporting under NGER Act.

Existing NGER Act reporting obligations

The NGER Act applies to constitutional corporations which trigger the reporting thresholds in the Act. Those corporations which do trigger the thresholds incur an obligation to report greenhouse emissions and energy use and consumption.

Government departments, agencies and some local authorities which have greenhouse gas emissions or energy use or consumption above the NGER Act reporting thresholds are not required to register under the Act because they do not fall within the definition of a constitutional corporation.

Even in relation to incorporated government agencies, the case may not be clear. The guidelines published under the NGER Act acknowledge the situation and, at paragraph 1.2.2, state that organisations for which legal application of the principle of constitutional corporation is not well established (such as incorporated government agencies) should consider keeping emissions and energy data and apply for registration under the Act where a reporting threshold is met.

How the CPRS Bill hooks the NGER Act reporting obligations

The aim of the CPRS is to reduce Australia's GHG emissions. Consistent with the intention of the White Paper, the CPRS Bill imposes liability on a broad range of entities.

A liable entity is defined as a "person" who, under a provision of the CPRS Act, is a liable entity. A "person" is defined in the CPRS (Consequential Amendments) Bill to mean an individual, a body corporate, a trust, a corporation sole, a body politic or a local governing body.

There are a number of provisions in the CPRS Bill which address liability. Under Part 3, section 18, of the CPRS Bill, an entity can be a liable entity if it is in operational control of a facility and the total amount of direct greenhouse gas emissions is 25,000 tonnes or more per annum1. Liability under CPRS can also attach to persons who import, produce or supply certain fuels or import, manufacture or supply synthetic GHG. Large users of eligible upstream fuel will incur liability via the mandatory quotation of an Obligation Transfer Number.

The CPRS relies on the reporting mechanism in the NGER Act to quantify the extent of an entity's liability to acquit permits. However, because the CPRS liability is imposed on a "person" whereas the NGER Act currently only applies to controlling corporations, there is a disconnect between the entities liable to report and entities liable under the CPRS.

Amendments to NGER Act

The CPRS (Consequential Amendments) Bill amends the NGER Act to support the reporting of greenhouse gas emissions covered by the CPRS by extending the reporting obligation to all liable entities under the CPRS.

A new Part 3A is to be inserted into the NGER Act by the CPRS (Consequential Amendments) Bill. This Part addresses reporting obligations of liable entities and imposes on those entities an obligation to register under the NGER Act, and to lodge emissions reports in accordance with the reporting scheme established by that Act. The NGER Act is also amended to include a provision for audits of non-group entities (defined as a person who is not a member of a controlling corporations group). Importantly, however, an entity obliged to register and report under the new Part 3A will only be required to report in respect of greenhouse gas emissions in respect of which a liability arises under the CPRS. This means that the entity is not obliged to report:

  • greenhouse gas emissions from a facility controlled by that entity which is below the CPRS threshold (nominally, 25,000 CO2-e). This also means that it is not necessary to report the emissions from the entity's group; and
  • the production or consumption of energy.

The consequence of these amendments is that incurring a liability under the CPRS will incur a co-extensive liability to report emissions the subject of the CPRS liability under the NGER Act.

While for most non-corporate entities which have a liability under the CPRS, registration will be required under Part 3A, the insertion of this new Part raises a difficult issue for some incorporated government agencies since it makes it necessary for a determination to be made whether the obligation to register arises under Part 3 or Part 3A. As noted above, this can have significant implications regarding the extent of the reporting obligation. This will require the incorporated entity to make a determination whether it is a constitutional corporation.


Although an entity may not incur reporting obligations under the current NGER Act, it may be required to report by virtue of the operation of the CPRS. Once Part 3A is inserted into the NGER Act, the reporting obligations of the Act (in relation to greenhouse gas emissions only) will apply to Commonwealth, State and Territory governments or local governing bodies in circumstances where they are liable entities by virtue of the application of the CPRS. The liable entity will then be required to report its greenhouse gas emissions under the NGER Act reporting system and to surrender eligible emissions units under the CPRS equivalent to the reported emissions.


1 There are some exceptions for land fill where the threshold is 10,000 tonnes for facilities within a prescribed distance of another land fill facility accepting the same classification of waste.

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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