NGERS is imminent, so what are your obligations?
Reporting of greenhouse gas emissions and energy consumption data for corporations that come under the National Greenhouse and Energy Reporting System (NGERS) is imminent. NGERS requires corporations whose operations surpass government determined thresholds of greenhouse gas emissions or energy consumption, to register and report their data on a yearly basis. With many organisations still unsure of their obligations, what effect will this legislation have and what will be required of those that qualify for registration?
In the first round of reporting, corporations whose yearly operations meet or succeed 125kt (125,000 tonnes CO2-e) of greenhouse gas emissions or 500Tj (500 = 1012 joules of energy) of energy, must register to report this information by the 31st of August this year. This is approximately equivalent to an annual expenditure of between $5-10 million on electricity, $1.5-2.5 million on gas or $11 – 13 million on diesel (depending on prices). Registered corporations must then provide the government with a comprehensive report of their 2008-09 data by the 31st of October.
When NGERS was released in 2008 it was projected that by the 2010-11 reporting period the legislation would cover around 700 medium to large organisations, as we approach the start date it is now looking more like 5000.
Over time the NGERS thresholds will be lowered, meaning that more and more corporations will be required to report their data to government. By the second year of reporting, 2009-10, those that produce 87.5kt of CO2-e or consume 350Tj of energy will be required to report, with the threshold dropping to 50kt CO2-e and 200TJ in the third year.
Companies that do not comply with mandatory reporting requirements face the threat of up to $220,000 in fines and jail sentences for chief executives. However as investors, customers and other stakeholders increasingly scrutinise companies’ environmental performance, the reputational damage resulting from a failure to register for NGERS, or inadequate reporting may be far greater than the penalties themselves.
Under NGERS all emissions or energy data falling within a registered corporation’s operational control must be reported on. It is now essential that Australian corporations understand and consider their level of control in all projects, facilities and operations they are involved in. According to the legislation a corporation has operational control over a facility if it has the authority to introduce and implement: operating, health and safety and environmental policies.
So what do Australian corporations that may qualify for NGERS reporting now need to do? The following steps are essential for any medium to large corporation whose greenhouse gas emissions or energy consumption have the potential to meet the government thresholds:
- Understand the NGERS definition of operational control and how this may apply to your corporation i.e. is it likely that you’ll be required to register?
- Collect the necessary data and confirm whether it meets or succeeds the threshold
- Verify and ensure all data collection systems and processes are robust and reliable, to avoid any reporting inaccuracies and the associated repercussions
- Learn from the process – ‘what get’s measured gets done’. Analysis of data and review of processes enables identification of opportunities for improved resource efficiency, as well as more effective decision making, and with energy costs forecasted to significantly increase in coming years, annual savings will accrue in greater amounts.
- Integrate systems - align greenhouse gas and energy consumption performance with internal management performance indicators and reporting systems.