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Key steps in reporting your obligations

29 June 2022

Steps

  1. 1: Know the reporting thresholds
    1. Facility thresholds
    2. Corporate group thresholds
  2. 2: Identify your corporate group
    1. Controlling corporation
    2. Group members
    3. Reporting transfer certificates
    4. Section 22X agreements
  3. 3: Determine operational control for facilities
    1. What is a facility
    2. Operational control
    3. Change in operational control

Step 1: Know the reporting thresholds

There are two types of thresholds that determine which companies have an obligation under the National Greenhouse and Energy Reporting Act 2007 (NGER Act): facility and corporate group thresholds.

Facility thresholds

The facility threshold are:

  • 25 kt or more of greenhouse gases (CO2-e) (scope 1 and scope 2 emissions)
  • production of 100 TJ or more of energy, or
  • consumption of 100 TJ or more of energy.

Corporate group thresholds

The corporate group thresholds are:

  • 50 kt or more of greenhouse gases (CO2-e) (scope 1 and scope 2 emissions)
  • production of 200 TJ or more of energy, or
  • consumption of 200 TJ or more of energy.

If any of these thresholds are met, NGER obligations are triggered. For example, if a controlling corporation’s group consumes 105TJ of energy in a financial year, it will have triggered an NGER threshold, regardless of whether it does not produce emissions of 25kt or more.

Step 2: Identify your corporate group

Controlling corporation

Obligations under the National Greenhouse and Energy Reporting Act 2007 (NGER Act) apply to controlling corporations only.

A controlling corporation is a 'constitutional corporation' that does not have an Australian incorporated holding company. It is usually the corporation at the top of the corporate hierarchy in Australia and can be a 'non-operational' holding company that does not handle day-to-day business. It can also be a foreign incorporated entity that operates directly in Australia without an Australian incorporated subsidiary.

If you are unsure whether your corporation is a 'constitutional corporation', you may wish to seek professional services advice to confirm its status.

Group members

A controlling corporation's group may consist of a controlling corporation only or it may include subsidiaries. Under the NGER Act, a 'subsidiary' has the same meaning as section 46 of the Corporations Act 2001 and is considered to be part of the controlling corporation's group.

It is important to correctly identify the members of your group because this determines which facilities your controlling corporation must report on.

Reporting transfer certificates

In certain circumstances a controlling corporation can apply for a documentasset:Guideline - Reporting transfer certificates to transfer its reporting obligations to another corporation (that has financial control over the facility).

Section 22X agreements

Under a section 22X agreement, a controlling corporation and group member can transfer reporting obligations for a facility or facilities, from the controlling corporation, to the group member that has operational control over the relevant facility or facilities.

Step 3: Determine operational control for facilities

What is a facility

A facility is an activity or series of activities that generate greenhouse gas emissions and produce or consume energy. Facilities:

The definition of a facility for the purposes of the NGER legislation is quite broad. The NGER Scheme is intended to cover a number of varied and complex situations. It is designed to provide corporations with a degree of flexibility in applying the definition of a facility to their own specific circumstances.

For example, a facility under the NGER Act might be a factory as well as transportation of goods outside the factory's boundaries, but still associated with the factory's activities. Other examples of facilities include electricity generators, primary production and manufacturing plants, mining, landfill and construction sites, retail outlets, air, rail, road and water transport, and electricity, gas or water supply.

For more information on defining a facility under the NGER Scheme see documentasset:NGER Defining facilities.

Operational control

A person will have operational control over a facility if they have the authority to introduce and implement any or all of the following for the facility:

  • operating policies
  • health and safety policies
  • environmental policies, or

Where more than one corporation has the authority to introduce and implement any or all of these policies, the corporation that has the greatest authority to introduce and implement operating policies and environmental policies has operational control over the facility.

Where no one corporation has the greatest authority to introduce and implement these policies, a corporation can be nominated as having operational control over the facility. This occurs by filling in the Application for declaration of facility form.

The agency can also declare a person as having operational control over a facility.

Change in operational control

There are also situations where there may be change in operational control, for example where a facility is sold part way through the year. In these circumstances each controlling corporation would report on the facility for the part of the year the facility was under the operational control of the controlling corporation or its group member. Note part year reporting does not apply where ownership of the controlling corporation or group member changes but operational control of a facility does not.



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