Australia already has fairly established regulatory regimes under the National Greenhouse and Energy Reporting (NGER) scheme and the Safeguard Mechanism. These aren’t new, they’re mature, and they operate under the Clean Energy Regulator (CER). They differ in purpose and scope from IFRS S2 / climate disclosure rules — but they matter, especially if the thresholds shift.
What are NGER & the Safeguard Mechanism?
- NGER (National Greenhouse and Energy Reporting Scheme) is a mandatory national framework requiring certain companies (or corporate groups) to report their greenhouse gas emissions, energy production, and energy consumption. (Clean Energy Regulator)
- Safeguard Mechanism builds on NGER. It imposes emissions baselines on high-emitting facilities. If a facility emits more than its baseline, it must manage or offset the excess emissions (for example, by surrendering carbon credits). (Clean Energy Regulator)
- All Safeguard facilities must also report under NGER (so the Safeguard doesn’t require a totally new reporting regime) (Clean Energy Regulator)
What differentiates them from climate disclosure standards like IFRS S2 is that they are operations-based, enforcement mechanisms with compliance obligations, not just reporting guidelines.
Key thresholds & who is in / out
| Scheme | Threshold / trigger | Who needs to worry | Notes / caveats |
|---|---|---|---|
| NGER facility threshold | 25,000 t CO₂-e (Scope 1 + 2) or 100 terajoules of energy production/consumption (facility level) (Clean Energy Regulator) | Firms whose facilities individually exceed these levels must report | If your facility is below, you may not need to report now. |
| NGER corporate group threshold | 50,000 t CO₂-e or 200 TJ energy (group level) (Clean Energy Regulator) | Corporate groups whose aggregated operations cross this limit | Many medium firms stay below these for now. |
| Safeguard threshold (responsible emitter) | 100,000 t CO₂-e (covered emissions) per financial year (Clean Energy Regulator) | Facilities that exceed this level are “safe-guarded” | These facilities must keep emissions below baseline or manage excess. |
So if your business currently operates under these thresholds, you may not have direct compliance obligations — but it’s wise to monitor for changes in policy.
Audit, registration & oversight
- Under NGER, audits must be conducted by CER-registered auditors. (Clean Energy Regulator)
- The CER maintains a Register of Greenhouse & Energy Auditors (publicly accessible). (Clean Energy Regulator)
- For Safeguard enforcement and some specialized determinations (like emissions intensity determinations or baseline adjustments), audit assurance is required. (Clean Energy Regulator)
- Note: the audit team leader must be a registered auditor. (Clean Energy Regulator)
Why this matters (and what to watch)
- Though many private firms may not now cross the thresholds, policy change is possible. Governments may lower thresholds or broaden coverage, effectively turning distributional “carbon liability” onto more players.
- The rollout of climate disclosure (like through AASB S2) gives regulators more information about emissions and business models — that data might inform decisions to expand NGER / Safeguard coverage.
- If you’re preparing now (data systems, baseline estimation, internal controls), you’re better placed to respond if thresholds shift.
- Risks of non-compliance are real. Entities with registered facilities must manage excess emissions, surrender credits, or face penalties.
Note: This article reflects my personal perspective, based on current public sources. Policies, thresholds, or rules may evolve. Please check back for updates.
Useful sources & further reading
- Clean Energy Regulator: NGER Scheme & Assess Your Obligations (Clean Energy Regulator)
- CER Auditor Register (Greenhouse & Energy Auditors) (Clean Energy Regulator)
- Safeguard Mechanism overview (covered emissions, rules) (Clean Energy Regulator)
- CER NGER Reporting Guides (for method, thresholds) (Clean Energy Regulator)
