Accelerating carbon abatement for Australia by providing a national framework for reporting emissions and energy data

Purpose

The National Greenhouse and Energy Reporting scheme contributes to the objective of reducing Australia's greenhouse gas emissions by providing a national framework for reporting and publishing company information about greenhouse gas emissions and energy production and consumption.

This data informs Commonwealth, state and territory government policy, programs and activities, avoids duplication of similar reporting requirements, and helps meet Australia's international reporting obligations.

Summary of progress in 2015–16

By the end of 2015–16 a total of 98 per cent of all reports were submitted and all required data and information was published within the required timeframes.

How it works

The National Greenhouse and Energy Reporting Act 2007 introduced a single national framework for reporting on emissions and energy.

Corporations that meet any of the legislated thresholds must apply for registration.⁶ Registered corporations report annually on the greenhouse gas emissions, energy production and energy consumption from facilities within their corporate group. The reporting entity is usually the highest Australian-incorporated holding company for the corporate group.

We publish totals of greenhouse gas emissions and net energy consumption for any corporate group with reported emissions of 50 kilotonnes or more of carbon dioxide equivalent.

The data informs government and the public about emissions and energy flows across Australia. We also use the data to set facilities' reported emissions baselines under the Emissions Reduction Fund safeguard mechanism from July 2016.

Reporting

Controlling corporations, reporting transfer certificate holders and 22X reporters⁷ are required to report their past financial year's emissions and energy use by 31 October each year. As a result, this annual report covers National Greenhouse and Energy Reporting scheme outcomes from the 2014–15 financial year.

For 2014–15, a total of 98 per cent of reporters submitted their report by 2 November, up from 97 per cent the previous year. The 31 October deadline fell on a weekend in 2014–15, so the reporting deadline became the next business day, 2 November 2015.

The continual increase in compliance rates reflects our agency's maturing approach to compliance and proactively engaging with our clients.

Reporting for the 2014–15 year showed 404⁸ corporations that met the publication thresholds reported:

• 322 million tonnes scope 1 greenhouse gas emissions (carbon dioxide equivalent)
• 91 million tonnes of scope 2 greenhouse gas emissions (carbon dioxide equivalent), and
• net energy consumption of approximately 5 422 petajoules.

FEATURE

Preparing for the safeguard mechanism

This year we worked closely with policymakers, clients and stakeholders to prepare for the commencement of the safeguard mechanism on 1 July 2016.

We contributed to the Department of the Environment's policy development process, helping to align the new safeguard mechanism with existing data and processes. This minimised additional reporting requirements for our clients.

Almost all of the facilities expected to be covered by the safeguard mechanism already report under our National Greenhouse and Energy Reporting scheme. The safeguard applies to facilities that emit more than 100 000 tonnes of carbon dioxide equivalence a year, including businesses involved in electricity generation, mining, oil and gas, manufacturing, transport, construction and waste. Collectively, these facilities account for about half of Australia's greenhouse gas emissions.

During April and May 2016 we held client workshops in Sydney, Melbourne, Perth and Brisbane to explain the safeguard mechanism and ensure clients understood their obligations and were well prepared for 1 July 2016. The workshops attracted more than 230 attendees who responded positively to the opportunity to ask questions and provide feedback.

We held monthly technical working group meetings with the Australian Industry Greenhouse Network from February to May 2016 to obtain business input on our approach to implementing the safeguard mechanism. This engagement informed the detailed technical guidance on calculated baselines that we developed for our clients.

In May 2016 we began notifying clients about their proposed reported baselines, which are based on historical emissions data reported for individual facilities. The notification process gives clients the opportunity to review the proposed baseline and provide any comments before the baseline determination is made. By 30 June 2016 we had issued 88 per cent of notifications. We will continue to issue the remaining notifications into 2016–17. Generally, the later notifications involve facilities whose activities have changed over time, requiring adjustments to historical data. From 1 July 2016, when the safeguard mechanism commences, we will make the reported baseline determinations. We will publish a list of facilities with baseline determinations progressively through the second half of 2016.

Our preparations for the safeguard mechanism also involved engaging with auditors to explain changes to the scope of audits associated with applications for calculated baselines, which are based on production and emissions intensity forecasts. For the first time, auditors will need to provide an opinion about forward-looking information. A total of 84 auditors attended two workshops in Sydney and Melbourne in April 2016 to discuss and prepare for these changes. We also held a roundtable attended by 10 auditors in June 2016 to seek detailed feedback before finalising our guidance on safeguard mechanism audits.

The strength of our relationships with clients and experience delivering various schemes, together with our ability to quickly respond and adapt to changes in our operating environment, enabled us to prepare for the smooth introduction of the safeguard mechanism within the relatively short timeframe.

Image acknowledgment: Courtesy of Michael Evans Photography. Tritton Mine, New South Wales, National Greenhouse and Energy Reporting scheme.

Figure 5: Australia's sources of reported scope 1 emissions by industry for 2014–15

FEATURE

Publishing a more complete picture of greenhouse and energy data

This year we released additional data about electricity sector emissions, in addition to the greenhouse and energy reporting information we are required to publish each February.

We usually publish data on electricity production and emissions for designated generation facilities or power stations. This year for the first time, we also published the fuel source and emissions intensity of all power stations that are reported. This new information provided a more complete picture of emissions from the electricity sector than previous publications.

We also published additional information about emissions from grid-connected electricity generators, which will be covered from July 2016 by the sectoral baseline under the safeguard mechanism. The collective scope 1 emissions for this group of power stations in 2014–15 was reported as 176.1 million tonnes of carbon dioxide equivalent, representing more than 98 per cent of the electricity sector's reported emissions.

The additional data published in February 2016 provides greater transparency and ensures industry is informed and well prepared for the introduction of the safeguard mechanism on 1 July 2016.

Image acknowledgment: Clean Energy Regulator.

Reporting system

Clients prepare and submit their reports using the Emissions and Energy Reporting System (EERS). The streamlined system includes prompts, information and functionality designed to minimise the compliance burden for reporting, without reducing the integrity of the data. The system also provides a flexible framework for implementing and supporting clients to adapt to changes the Department of the Environment makes annually to the National Greenhouse and Energy Reporting (Measurement Determination) 2008 such as including additional methods for estimating emissions and updates in emissions and energy factors.

Since this reporting system was introduced for the 2012–13 reporting year, a new version has been released each year to align with new legislative requirements and take client feedback into account.

Publications

We are required by legislation to publish certain information by 28 February each year, including:

• National Greenhouse and Energy Reporting scheme data—the total scope 1 and scope 2 greenhouse gas emissions and net energy consumption data reported by registered corporations that exceed the publishing threshold
• data for all facilities with a principal activity of electricity generation—this was the third year of publishing this facility-level information, which helps inform the community about the performance of electricity generators, and
• an extract of the National Greenhouse and Energy Register—including names of all controlling corporations and reporting transfer certificate holders that were listed on the register during 2014–15. In total 779 organisations were listed in 2014–15.⁹

We published data for 2014–15 on 26 February 2016.

Figure 6: State and territory emissions profile, 2014–15

361 AUDITS WERE COMPLETED UNDER THE NATIONAL GREENHOUSE AND ENERGY REPORTING AUDIT FRAMEWORK.

Image acknowledgment: Clean Energy Regulator. Fosterville Mine, Victoria,
National Greenhouse and Energy Reporting scheme.

Audits

The National Greenhouse and Energy Reporting Audit Framework helps ensure the integrity of data reported to us under the various schemes we administer, including the National Greenhouse and Energy Reporting scheme, the Emissions Reduction Fund and the Renewable Energy Target.

During 2015–16, a total of 361 audits were completed under this framework. This included 36 audits that we initiated. The other audits were submitted by participants in our schemes, including audits of 162 eligible offsets projects (Emissions Reduction Fund), 106 exemption certificate applications (Renewable Energy Target) and 57 voluntary audits from National Greenhouse and Energy reporters.

The audits provided confidence in Reported National Greenhouse and Reporting scheme data, identifying factors that helped prioritise report assessment, compliance, intelligence and client education activities. In the Emissions Reduction Fund they provide assurance to issue ACCUs and in the Renewable Energy Target to award exemption certificates.

We register greenhouse and energy auditors and monitor their performance. As at 30 June 2016, there were 137 registered auditors, down from 169 registered at 30 June 2015. This reduction was predominantly due to self-removal and auditors not remaining active and therefore not meeting ongoing registration requirements. We assessed 25 auditors as part of the routine registration review program during 2014–15. The number of registered auditors remains sufficient to support and provide audits for our schemes and clients.

Compliance by registered auditors is an area of focus for us given its importance to the integrity of the schemes we administer and, for the first time, we conducted inspections of registered auditors in 2015–16. These inspections provided us with in-depth insights into the performance of auditors. The inspection program has also assisted us to enhance our own procedures and improve guidance. Where we identified non-compliance through inspections, we initiated compliance action. This compliance action ranged from specific improvements that auditors need to undertake, through to considering suspension or deregistration. These compliance actions will be finalised in 2016–17.

Information sharing

We share information reported under the National Greenhouse and Energy Reporting scheme to assist Commonwealth, state and territory programs and activities.

We provide the secretariat for the Commonwealth Information Sharing Network and the State and Territory Information Sharing Network, which are forums to discuss National Greenhouse and Energy Reporting data. Attendees at the 2015 and 2016 State and Territory Information Sharing Network meetings confirmed that the network is strengthening relationships with data users from state and territory jurisdictions. The networks will continue to assist Australian, state and territory governments to identify opportunities for deregulation and red tape reduction relating to National Greenhouse and Energy Reporting data.

National Greenhouse and Energy Reporting data was used by the Australian Bureau of Statistics for its Energy, Water and Environment Survey 2014–15 to minimise the reporting load on business. If a business was selected to take part in the survey and the energy consumption data it reported under the 2014–15 National Greenhouse and Energy Reporting scheme was available, the Australian Bureau of Statistics obtained and used this data. The Australian Bureau of Statistics published the results in July 2016, just outside the reporting period.

During the year, we continued to expand the extent to which data is shared with other partner agencies. We are looking at how National Greenhouse and Energy Reporting data could be incorporated into the Australian Renewable Energy Mapping Infrastructure Project, which has been developed by CSIRO ICT Research and Development organisation Data61, with funding support from the Australian Renewable Energy Agency. The project is seeking to consolidate data relating to renewable energy resources, demand and infrastructure into a single freely accessible online mapping portal. It is available at www.nationalmap.gov.au/renewables.

We also started work with the Department of Industry, Innovation and Science and the Australian Bureau of Statistics to explore the potential for linking aggregated and/or de-identified National Greenhouse and Energy Reporting data with the Extended Analytical Business Longitudinal Database. This database, developed by the Australian Bureau of Statistics, is a firm-level statistical asset that will enable researchers and analysts to explore relationships between energy, emissions and other business variables held in the database.

Footnotes

6 The facility threshold is 25 kilotonnes or more of greenhouse gases (scope 1 and scope 2 emissions) and production or consumption of 100 terajoules or more. The corporate group threshold is 50 kilotonnes and 200 terajoules. Scope 1 emissions are released into the atmosphere as a direct result of a facility's activities, while scope 2 emissions are released from indirect consumption of an energy commodity.

7 Refer to the Glossary for definition.

8 This is lower than the figure reported last year, due to fewer reporters covering a larger amount of emissions. Reasons include changes such as takeovers and corporate restructures.

9 This is lower than the number reported last year partly due to the repeal of the carbon price and because the 2013–14 figure included all liable entities.