Alert

Who does this affect?

Australian corporations that consume or produce energy, or emit greenhouse gases at or above the National Greenhouse and Energy Reporting Act reporting thresholds.

What do you need to do?

Register with the Greenhouse and Energy Data Officer by 31 August 2009 and report energy consumption, energy production and greenhouse gas emissions by 31 October 2009.

Author
Jonathan Mitchell  
Solicitor

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Louis Chiam  
Partner
T +61 3 9643 4086

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Sydney
Vishal Ahuja  
Dominic Bortoluzzi  
Scott Farrell  

Melbourne
Louis Chiam  

Perth
Alan Murray  
Tim Warman  

Brisbane
Matthew Austin  

Canberra
Adam Bartlett  

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With the registration deadline for Australia’s mandatory greenhouse reporting scheme only six weeks away, liable corporations are now at the business end of greenhouse reporting. This alert provides a compliance checklist covering the main areas of National Greenhouse and Energy Reporting (NGER).

NGER deadlines

After more than two years of consultation, legislation and regulation and several inches of guidelines and methodologies, the NGER Scheme is set to go live at last. There are two key dates for liable corporations:

• Register with the Greenhouse and Energy Data Officer by 31 August 2009.

• Report energy consumption, energy production and greenhouse gas emissions to the Greenhouse and Energy Data Officer by 31 October 2009.

The following compliance checklist is designed to assist you to quickly identify compliance with the key obligations.

Registration will take time

Registration can take some time, involving the following steps:

• Identifying and nominating the controlling corporation responsible for reporting and the members of the corporate group;

• Preparing of a registration form, including signing by the CEO;

• Many corporations may choose to authorise registration by board resolution; and

• Posting the registration form to the Greenhouse and Energy Data Officer before 31 August 2009.

The registration process should be commenced well in advance to avoid missing the deadline date.

Are you required to register and report?

The 2008/2009 financial year thresholds are:

• Corporate group threshold: 125,000 tonnes of CO₂-e emissions or 500 terrajoules of energy production or use

• Facility threshold: 25,000 tonnes of CO₂-e emissions or 100 terrajoules of energy production or use.

In broad terms, 100 terrajoules of energy use translates to an annual electricity bill of approximately A$2.5 million.

Have you identified the controlling corporation?

In many circumstances the controlling corporation will be self evident. That is, the top Australian entity in the corporate group. However, in some corporate groups the issue is more complicated. For example, are there joint ventures, partnerships or unit trusts to consider? Or, as a result of a complex cross-border structure, does more than one entity satisfy the definition?

Have all measurement and reporting obligations been considered?

Reporting obligations typically crystallise on a facility by facility basis.

• Have all emissions sources been included?

• Particular attention should be paid to activities such as transport, gas and electricity transmission, water supply, waste and sewerage services.

• What measurement methods will be used?

• The highly prescriptive NGER Measurement Determination sets out the measurement methods to be used for estimating emissions.

• Can your data be aggregated?

• This option, which can simplify the reporting process, is available when facilities are located within one State or Territory, are in the same ANZSIC division and are vertically integrated.

What are the facility boundaries?

Delineating the facility boundaries may involve some complexity, for example if there are:

• Various locations at which activities are taking place; or

• Several entities with operational control; or

• A number of activities occurring which are not part of the primary production process.

Who has operational control?

The reporting obligation falls on the controlling corporation where it, or members of its group, has operational control of a facility. It is often clear who has authority over a facility to introduce and implement operating, health & safety or environmental policies. However, where there is an outsourced operator, a joint venture or a facility manager, it will be necessary to determine who has the greatest authority to introduce operating and environmental policies.

Is your CEO covered by the due diligence defence?

In the event of a contravention, your CEO is personally liable for civil penalties unless it can be established the CEO took ‘all reasonable steps’ to comply. In order to maximise the prospects of satisfying this due diligence defence, the following actions should be taken:

• Establish a formal compliance plan;

• Arrange regular professional assessments of company compliance; and

• Ensure that employees have a reasonable knowledge of the compliance requirements.

Do you have access to the relevant data?

Gaining access to data is not always easy. Apart from the usual challenges of corporate record keeping, this can raise issues regarding;

• Contractual rights to data;

• Confidentiality; and

• Cost recovery mechanisms.