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Greenhouse gases and energy

14 March 2023

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Greenhouse gases

The greenhouse gases that are reported under the NGER Scheme include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6) and specified kinds of hydro fluorocarbons and perfluorocarbons.

When reporting emissions, energy production and energy consumption data, only those activities, fuels and energy commodities for which there are applicable methods under the NGER Scheme are reported.

Greenhouse gas emissions are measured as kilotonnes of carbon dioxide equivalence (CO2-e). This means that the amount of a greenhouse gas that a business emits is measured as an equivalent amount of carbon dioxide which has a global warming potential of one. For example, in 2015–16, one tonne of methane released into the atmosphere will cause the same amount of global warming as 25 tonnes of carbon dioxide. So, the one tonne of methane is expressed as 25 tonnes of carbon dioxide equivalence, or 25 t CO2-e.

Scope 1 emissions

Scope 1 greenhouse gas emissions are the emissions released to the atmosphere as a direct result of an activity, or series of activities at a facility level. Scope 1 emissions are sometimes referred to as direct emissions. Examples are:

  • emissions produced from manufacturing processes, such as from the manufacture of cement
  • emissions from the burning of diesel fuel in trucks
  • fugitive emissions, such as methane emissions from coal mines, or
  • production of electricity by burning coal.

Scope 1 emissions are specified under the NGER legislation and must be reported.

Scope 2 emissions

Scope 2 greenhouse gas emissions are the emissions released to the atmosphere from the indirect consumption of an energy commodity. For example, 'indirect emissions' come from the use of electricity produced by the burning of coal in another facility.

Scope 2 emissions from one facility are part of the scope 1 emissions from another facility.

For example, a power station burns coal to power its generators and in turn creates electricity. Burning the coal causes greenhouse emissions to be emitted. These gases are attributed to the power station as scope 1 emissions. If the electricity is then transmitted to a car factory and used there to power its machinery and lighting, the gases emitted as a result of generating the electricity are then attributed to the factory as scope 2 emissions.

Scope 2 emissions are specified under the NGER legislation and must be reported.

Scope 3 emissions

Scope 3 greenhouse gas emissions are not reported under the NGER Scheme, but can be used under Australia's National Greenhouse Accounts.

Scope 3 emissions are indirect greenhouse gas emissions other than scope 2 emissions that are generated in the wider economy. They occur as a consequence of the activities of a facility, but from sources not owned or controlled by that facility's business. Some examples are extraction and production of purchased materials, transportation of purchased fuels, use of sold products and services, and flying on a commercial airline by a person from another business.

Energy production and energy consumption

documentasset:NGER energy production and consumption is reported under the NGER Scheme so that data on energy flows and transformations occurring throughout the economy can be captured. This includes the initial extraction and own-use of energy, and the transformation of energy occurring within and between facilities.

The NGER Scheme legislation requires the total amount of each commodity to be reported, including each transformation of energy from one fuel or commodity into another.

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