Understanding and meeting NGER and Safeguard Mechanism requirements for industrial organisations
Australia’s largest emitters face increasing pressure to measure, report and reduce their environmental impact. The National Greenhouse and Energy Reporting Scheme (NGER) and Safeguard Mechanism are central to this transformation, establishing mandatory reporting frameworks and emissions reduction requirements for industrial facilities.
These frameworks are critical for Australian organisations, with NGER-reported emissions accounting for 68% of Australia’s total net greenhouse gas emissions in 2020-21. For facilities emitting more than 100,000 tonnes of CO2-e annually, the Safeguard Mechanism now requires demonstrable emissions reductions in line with Australia’s climate targets.
As regulations and market expectations increase, industrial organisations must ensure their reporting and compliance systems and processes deliver accurate, auditable data. Traditional approaches using spreadsheets and manual calculations fall short of today’s compliance standards.
Drawing on over 10 years of experience in process engineering, data-led software and ESG reporting in the industrial sector globally, this guide explains these frameworks in detail. It also explores how digital solutions can help industrial organisations meet their obligations effectively.
Contents
- What is the National Greenhouse and Energy Reporting Scheme (NGER)?
- What does NGER cover?
- What are the key elements of NGER?
- Who needs to report under NGER?
- What is a controlling corporation?
- What counts as an NGER facility?
- What is the NGER legislative framework?
- What are the NGER reporting thresholds?
- What is reported in the NGER?
- How is the NGER information calculated?
- What is the NGER reporting cycle?
- Do NGER reports need to be audited
- What is the Safeguard Mechanism?
What is the National Greenhouse and Energy Reporting Scheme (NGER)?
The National Greenhouse and Energy Reporting Scheme (NGER) is Australia’s primary framework for reporting company information about greenhouse gas emissions, energy production and energy consumption.
Established under the NGER Act 2007, it is a critical part of Australia’s response to climate change. The scheme provides vital data to inform government policy and programs, informs the Australian public and helps meet Australia’s international reporting obligations.
The significance of NGER is substantial, with companies reporting under the scheme accounted for 68% of Australia’s total net greenhouse gas emissions, as noted in the NGER Scheme Data, 2020-21.
What does NGER cover?
NGER requires reporting across three key areas:
Greenhouse Gas Emissions
- Carbon dioxide
- Methane
- Nitrous oxide
- Sulfur hexafluoride
- Specific hydrofluorocarbons
- Specific perfluorocarbons
- Other prescribed gases
Energy Production
- Total energy produced from fossil fuels
- Energy from biofuels
- Renewable energy sources
- Other energy sources
Energy Consumption
- Gas usage
- Electricity consumption
- Renewable energy use
- Other fuel sources
What are the key elements of NGER?
The NGER legislation establishes three fundamental components:
- The National Greenhouse and Energy Reporting Scheme itself
- The Safeguard Mechanism
- A comprehensive framework for administration and compliance
Organisations that meet specific thresholds must:
- Register under the framework
- Report annually on their emissions, energy production and consumption
- Comply with the Safeguard Mechanism if they are high-emitting facilities
The Safeguard Mechanism, which builds on the NGER Scheme, requires Australia’s highest-emitting facilities to actively reduce their emissions, marking a significant step beyond reporting to actual emissions reduction.
Who needs to report under NGER?
As outlined by the Australian Government’s Clean Energy Regulator (CER), controlling corporations that have operational control of facilities generating greenhouse gas emissions, producing energy, or consuming energy in Australia must report under NGER if they meet certain thresholds. [Note: Thresholds will be detailed in the next section]
What is a controlling corporation?
A controlling corporation is typically the company at the top of the corporate hierarchy in Australia that has operational control of NGER facilities. This includes:
- Parent companies, even if not involved in day-to-day operations
- Foreign companies operating directly in Australia without an Australian subsidiary
- Group members with operational control of facilities
Operational control means having the greatest authority to introduce and implement:
- Operating policies
- Health and safety policies
- Environmental policies
Important note: NGER reporting only covers activities within Australia.
What counts as an NGER facility?
NGER facilities can be any operation that:
- Generates greenhouse gas emissions
- Produces energy
- Consumes energy
Examples include:
- Electricity power stations
- Mine sites
- Manufacturing plants
- Construction sites
- Landfills
- Transport operations
- Retail outlets
- Gas and water supply facilities
To qualify as a facility, operations must form a single undertaking or enterprise as defined in the NGER Act and regulations. To understand these requirements in detail, it’s essential to understand the legislative framework that governs NGER.
What is the NGER legislative framework?
The NGER scheme operates under a comprehensive legislative framework that includes the primary Act and several supporting instruments. Understanding this framework is essential for organisations that need to comply with NGER requirements.
National Greenhouse and Energy Reporting Act 2007
The NGER Act 2007 establishes the NGER scheme. Supporting this Act are five key legislative instruments:
- National Greenhouse and Energy Reporting Regulations 2008
- Outlines company information requirements
- Details how to apply the Act
- National Greenhouse and Energy Reporting (Measurement) Determination 2008
- Sets out methods, criteria and measurement standards
- Updated annually – companies must use the version matching their reporting year
- Used for calculating emissions and energy data
- National Greenhouse and Energy Reporting (Audit) Determination 2009
- Guides preparation, conduct and reporting of GHG and energy audits
- National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2019
- Defines required auditor qualifications
- Outlines registration requirements under the Act
- National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015
- Establishes rules and procedures for the Safeguard Mechanism
What are the NGER reporting thresholds?
Organisations must report under NGER if they meet either facility-level or corporate group thresholds. These thresholds are based on emissions, energy production, and energy consumption.
Facility thresholds
Individual facilities must report if they meet any of these thresholds:
- Emissions: 25,000 tonnes or more of CO2-e (Scope 1 and Scope 2)
- Energy production: 100 terajoules (TJ) or more
- Energy consumption: 100 TJ or more
Corporate group thresholds
Corporate groups must report if they meet any of these thresholds:
- Emissions: 50,000 tonnes or more of CO2-e (Scope 1 and Scope 2)
- Energy production: 200 terajoules (TJ) or more
- Energy consumption: 200 TJ or more
Important reporting requirements
- If only facility thresholds are triggered, reporting is required only for the facilities that meet these thresholds
- Important: If corporate group thresholds are met, all facilities within the group must report, regardless of individual facility thresholds
- Scope 2 emissions calculations must use location-based methods (Method A1 or A2) as outlined in Chapter 7 of the NGER Measurement Determination (Note: Methods are detailed below)
Once an organisation meets these thresholds, specific registration and reporting obligations apply.
Registration requirements
As outlined in the Climate Change Authority’s 2023 Review of the NGER Legislation (the 2023 NGER Review), controlling corporations must:
- Register with the Clean Energy Regulator by 31 August following the financial year in which they first meet any threshold
- Continue reporting until deregistration
- Controlling corporations may apply for deregistration if they can demonstrate:
- They are unlikely to meet thresholds for the next three years
- They have complied with all NGER Act reporting obligations
Reporting requirements
Once registered, organisations must:
- Report annually on:
- GHG emissions (Scope 1 and Scope 2)
- Energy consumption
- Energy production
- Submit reports digitally through the Emissions and Energy Reporting System (EERS)
What is reported in the NGER?
Each financial year, the NGER Act requires all registered corporations to report. The four key reporting areas are:
Scope 1 GHG emissions
The release of a greenhouse gas into the atmosphere as a direct result of an activity or series of activities that constitute the facility (Division 2.5, NGER Regulations)
Scope 2 GHG emissions
Indirect emissions that are the result of purchased electricity (or heating, cooling or steam) that is consumed by the facility (Division 2.5, NGER Regulations)
Energy production
Total energy produced from various fuels such as coal, petroleum, gas and biofuels, including energy commodities such as uranium and hydrogen
Energy consumption
Total energy consumed from various fuels such as coal, petroleum, gas and biofuels
How is the NGER information calculated?
The National Greenhouse and Energy Reporting (Measurement) Determination 2008 provides the methods, criteria and measurement standards for calculating emissions and energy data.
Key aspects of the Determination:
- Updated annually to include:
- New emissions factors
- Responses to consultation and feedback
- Improvements to estimation methods
- Aligns with international emissions reporting requirements established under the Paris Agreement
Methods for estimating NGER Scope 1 emissions
Emissions are only required to be reported if there is a method set out for calculating emissions from that source (Section 13, NGER Act). This ensures standardised measurement approaches across all reporting entities.
Reminder: What are Scope 1 emissions?
Also known as direct emissions, Scope 1 emissions are those released as a direct result of an activity, as outlined in the 2023 NGER Review. Examples include:
- Emissions from manufacturing processes, such as cement production
- Emissions from burning diesel fuel in trucks
- Fugitive emissions, such as methane from coal mines
- Emissions from electricity production through coal burning
Overview of measurement methods:
The Australian Government’s Clean Energy Regulator (CER) Methods and Measurement Criteria Guideline August 2024 outlines several approaches to measurement:
- Direct emissions monitoring
- Estimation through tracking related variables (such as multiplying fossil fuel consumption by emission factors)
- Sampling and direct analysis of carbon content for more accurate estimates
Key points about methods:
- Four methods are available in the NGER Measurement Determination
- Reporters can choose methods, but not all are available for all sources
- Different methods can be used for different fuels and gases
- Method 1 is only available for solid fuels, methane and nitrous oxide
- All four methods are available for carbon dioxide
- Organisations can assess whether investing in more accurate methods delivers business value
The four methods in detail:
- Method 1: The simplest estimation method
- Aligns with international UNFCCC guidelines
- Uses default emission factors based on the National Greenhouse Gas Inventory
- Converts activities into emissions equivalents by multiplying quantity by emission factors
- Uses nationally representative data averaged to create standard rates
- Method 2: Applies to fuels and raw materials – combines industry and standard approaches
- Sampling can use industry-based methods
- Analysis must follow Australian or international standards
- Requires facility-specific information about fuel qualities
- More accurate than Method 1 due to standardised analysis emissions
- Method 3: Applies to fuels and raw materials – highest standard approach
- Both sampling and analysis must follow Australian or international standards
- More rigorous than Method 2, as industry-based sampling is not permitted
- Provides highest accuracy through use of stringent standards for both sampling and analysis procedures
- Method 4: Applies to direct monitoring
- Requires direct monitoring of emissions
- Can be periodic or continuous
- Provides highly accurate calculations
- Used in specific industries like coal mining for safety and accuracy
Methods for estimating NGER Scope 2 emissions
Reminder: What are Scope 2 emissions?
As outlined by the Climate Change Authority, Scope 2 emissions are indirect emissions associated with the use of purchased electricity (or heating, cooling or steam) at a facility. Scope 2 emissions from one facility are part of the Scope 1 emissions from another facility.
Examples of Scope 2 emissions include emissions from purchased electricity used by:
- A car factory to power its machinery and lighting
- An aluminium smelter to power electrolytic processes
- A large supermarket for lighting, heating or cooling
Scope 2 emissions must be reported under the NGER scheme.
Compulsory location-based methods for estimating NGER Scope 2 emissions
The measurement determination provides two compulsory location-based methods. To understand how these reporting requirements are met, organisations must follow specific calculation methods:
- Method A1: Uses the average grid emissions factor for the electricity grid where the electricity was consumed, providing a simplified approach
- Method A2: Requires the use of specific emissions factors for the electricity supplier or contract, accounting for the actual energy sources and emissions intensity of the supplier
The method used depends on whether the electricity was purchased from Australia’s major electricity grids or other sources.
Scope 2 emissions factors for electricity consumption from Australia’s grids are updated annually to reflect the mix of energy sources purchased.
Voluntary market-based method for estimating NGER Scope 2 emissions
From the 2023-24 NGER reporting year, reporters may additionally report Scope 2 emissions using a market-based method. This allows organisations to reflect actions taken to incentivise using lower carbon sources of electricity generation.
Scope 3 emissions are not reported under the NGER scheme
Scope 3 emissions are other indirect emissions that occur in an organisation’s value chain. While these emissions can be significant for many organisations, they are not reported under the NGER scheme.
What is the NGER reporting cycle
As the 2023 NGER Review outlines, the NGER Act establishes specific reporting timeframes and publication requirements.
Key reporting requirements:
- Section 19 of the NGER Act requires all registered controlling operations or group members with reporting responsibilities to submit annual NGER reports
- Reports must be submitted electronically through the Emissions and Energy Reporting System (EERS)
- The reporting deadline is 31 October for the previous financial year
Publication thresholds:
By 28 February, the regulator must publish data for organisations meeting specific thresholds:
Controlling corporations:
- Threshold: 50 ktCO2-e per year (combined Scope 1 and 2 emissions)
- Published data includes Scope 1, Scope 2 and net energy consumption
Reporting Transfer Certificate (RTC) holders:
- Threshold: 25 ktCO2-e per year or energy production/consumption of 100TJ or more
- Published data includes Scope 1, Scope 2 and net energy consumption
The regulator must also publish data on emissions and energy produced by designated electricity generation facilities.
Types of NGER reports:
There are three types of reports that contain GHG emissions, energy production and energy consumption data:
- Section 19: Energy and Emissions Report
- Required when controlling corporations exceed reporting thresholds
- Section 22G: Reporting Transfer Certificate (RTC) report
- Required from RTC holders for facilities under their responsibility during the reporting year
- Section 22X: Group member report
- Required when a group member agrees to take on its controlling corporation’s Section 19 reporting obligations
As outlined in the Clean Energy Regulator’s NGER reporting guides, sector-specific calculation guidelines are available for:
- Coal mining
- Electricity production and consumption
- Industrial processes
- Solid waste and landfill biogas management
- Wastewater handling
Do NGER reports need to be audited?
While audits are not mandatory under the NGER scheme, they play an important role in ensuring data accuracy and compliance:
Voluntary audits:
Organisations can choose to undertake voluntary audits. There are two types available:
- Reasonable assurance audits
- Limited assurance audits
Regulatory audits:
The regulator may initiate an audit if there are grounds to suspect non-compliance. These audits help maintain the integrity of reported data.
What is the Safeguard Mechanism?
While NGER provides the reporting framework, the Safeguard Mechanism builds on this to drive emissions reduction. Understanding how these frameworks work together is crucial for compliance.
The Safeguard Mechanism is the second objective of the NGER Act. It requires Australia’s largest industrial facilities to reduce their emissions over time, supporting Australia’s targets of 43% emissions reduction below 2005 levels by 2030 and net zero by 2050.
According to the 2023 NGER Review, the framework ensures:
- Total net Safeguard emissions between 1 July 2020 and 30 June 2030 do not exceed 1,233 Mt CO2-e
- Net Safeguard emissions are no more than 100 Mt CO2-e for FY 2029-2030 and zero after 30 June 2049
- The 5-year rolling average Safeguard emissions reduces over time from FY 2024-25
- Facilities have material incentives to reduce covered emissions
- Trade-exposed industries remain competitive
The significance of the Safeguard Mechanism is substantial. The 2023 NGER Review reports that in 2021-22, Safeguard facilities reported a total of 137.5 Mt CO2-e Scope 1 emissions, accounting for 35% of the total emissions reported under the NGER scheme.
What does the Safeguard Mechanism cover?
The Safeguard Mechanism applies to 219 facilities that emit 100,000 tonnes or more of Scope 1 emissions annually, spanning key industrial sectors including:
- Mining (132 facilities)
- Manufacturing (49 facilities)
- Transport (20 facilities)
- Gas supply (8 facilities)
- Electricity generation – excluding grid-connected (6 facilities)
- Other (4 facilities)
First legislated in 2014 and operational since 2016, the mechanism underwent significant reforms with the Australian Government’s National Greenhouse and Energy Reporting (Safeguard Mechanism) Amendment (Reforms) Rules 2023, which took effect from 1 July 2023.
How does the Safeguard Mechanism work?
To achieve these targets, the Safeguard Mechanism uses a comprehensive system of baselines, reporting requirements and compliance measures.
Facilities covered by the Safeguard Mechanism must report their emissions annually to the Clean Energy Regulator. The system provides both obligations and incentives.
Compliance options for facilities exceeding baselines:
- Purchase Australian Carbon Credit Units (ACCUs)
- Surrender Safeguard Mechanism credit units (SMCs)
- Apply to borrow baseline from the following year (repaid with interest)
- Apply for trade-exposed baseline adjustment (TEBA) for a discounted decline rate (up to 3 years)
- Request a multi-year monitoring period (MYMP) to allow more time for emissions reduction
Incentives for strong performance:
Facilities that keep emissions below their baseline in financial years from July 2023 may receive Safeguard Mechanism credit units (SMCs) to assist with future compliance.
How are Safeguard Mechanism baselines set?
As outlined in the 2023 NGER Review, the baseline setting depends on whether a facility is existing, new, or an existing facility that has begun producing new products.
The mechanism uses a production-adjusted intensity framework that multiplies production value by emissions intensity value, allowing baselines to adjust with production levels.
This framework operates differently for existing and new facilities:
Existing facilities:
- Use a hybrid model combining industry average and site-specific emissions intensity
- Transition from site-specific to industry-average values by 2030
- Subject to a default decline rate of 4.9% per annum (excluding sectoral/grid-connected electricity generation facilities)
For new facilities:
- Baselines set using international best practice emissions-intensity values
- Adapted for the Australian context
- Recognises the opportunity to incorporate the latest technology
- Also applies to existing facilities beginning new product lines
What are the Safeguard Mechanism record-keeping requirements?
As outlined by Australia’s Clean Energy Regulator (CER), facilities must maintain comprehensive records that demonstrate compliance with NGER Act obligations. These records must verify the reported data’s relevance, completeness, consistency, transparency and accuracy for external audits.
Key documentation requirements include:
- List of all monitored emission sources
- Activity data for emissions calculations, categorised by process and fuel type
- Evidence supporting calculations (receipts, invoices, payment details)
- Documentation of chosen emissions estimation methods
- Justification for monitoring method selection
- Data collection processes for each facility
- Records supporting business decisions and accuracy
When using specific emissions factors, facilities must maintain additional records, including:
- Monitoring methods used
- Results from emissions factor development
- Technical information such as biomass fractions and conversion factors
NGER and Safeguard Audits
Given the complexity of these requirements, understanding the audit framework is essential for ensuring compliance.
Audits are crucial in ensuring the accuracy and reliability of NGER and Safeguard Mechanism reporting. These audits provide assurance that reported data meets regulatory requirements and supports informed decision-making.
What is the NGER Audit Framework?
The National Greenhouse and Energy Reporting (Audit) Determination 2009 establishes the framework for three types of audits:
- Greenhouse and energy audits
- Safeguard audits – conducted for baseline determination applications
- Emissions Reduction Fund (ERF) audits – conducted under the Carbon Farming Initiative (CFI) Act
The requirements vary according to the type of audit being conducted. The framework provides for two main approaches:
Assurance Engagements:
An assurance engagement involves the audit team leader:
- Providing an independent opinion about the audited matter
- Using professional judgment in conducting the audit
- Assessing reliability, accuracy and completeness
- Preparing an assurance engagement report
Assurance engagements can be either:
- Reasonable assurance – providing comprehensive evaluation and a higher level of confidence
- Limited assurance – offering a moderate level of confidence based on limited procedures
Verification Engagements:
A verification engagement involves:
- Following specified procedures to verify the audited matter
- Conducting verification without providing opinion
- Focusing on specific data and procedures rather than overall reliability assessment
Each of these different types of audits has specific requirements for documentation and execution.
What are the requirements of an NGER audit?
NGER audit reports must follow a specific structure that varies depending on whether it’s an assurance or verification engagement. For assurance engagements, the report comprises three main components:
- Cover Sheet Requirements
The cover sheet must include:
- Name of the audited body
- Type of assurance engagement conducted
- Date of audit engagement
- Audit team leader sign-off
- Details of any granted exemptions
- Names and contact details of the audit team
- Part A Requirements
Part A outlines the engagement procedures and conclusions, including:
- Audit team leader details
- Objective of the assurance engagement
- Subject matter being audited
- Type of assurance provided
- Relevant NGER and CFI legislation provisions
- Audit period
- Confirmation of compliance with engagement terms
- Audit team leader’s conclusions
The assurance engagement summary must detail procedures performed, including:
- Evidence gathering discussions
- Process interviews about NGER data measurement and reporting
- Analysis of management’s data-gathering procedures
- Evaluation of NGER legislation interpretation
- Document inspection processes
- NGER data analysis
- Validation of data against source evidence
- Testing of underlying calculations
- Part B Requirements
Part B outlines the results of the audit procedures and conclusions, including:
- Items/issues requiring particular attention during the assurance engagement
- Aspects that impacted how the audit was carried out
- Any contraventions found of the Act, Regulations, CFI legislation or associated provisions
- Name and details of the peer reviewer’s evaluation
- Any other matters the audit team leader considers should be included in the report
Evolving audit requirements
According to the Treasury’s 2023 consultation paper on climate-related financial disclosure, audit requirements are becoming more sophisticated. Future assurance providers must be independent of the audited entity and demonstrate both financial auditing expertise and specific climate-related technical knowledge.
The Clean Energy Regulator’s Register of Greenhouse and Energy Auditors is expected to play an expanded role in:
- Connecting organisations with qualified auditors
- Providing access to technical experts
- Ensuring quality control while broadening the audit market
- Supporting the transition to climate-related financial disclosures
What are the limitations of NGER audits?
While the audit requirements outlined above provide a structured approach to assurance, there are several significant limitations to traditional audit methods. According to the Clean Energy Regulator’s High Emissions Facility Report Template July 2024:
Key limitations of traditional audits:
- Based on selective testing rather than comprehensive data examination
- May not detect instances of fraud, error or non-compliance
- Cannot provide continuous monitoring throughout the reporting period
- Testing is conducted on a sample basis only
Additional challenges with non-financial data:
- More inherent limitations than financial data due to its nature
- Relies heavily on estimation and extrapolation methods
- Calculations are often based on underlying information that may vary in quality
These traditional inherent audit limitations can be overcome through modern digital solutions that enable:
- Comprehensive rather than selective testing
- Continuous monitoring and verification
- Accurate data capture without estimation
- Reduced risk of fraud and error
Learn how Sustainability Tracker can help overcome these audit limitations.
When is a Safeguard Mechanism audit required?
According to the Clean Energy Regulator’s 2024 guidance, audits are required in specific circumstances:
Mandatory audit requirements:
- When applying for an emissions intensity determination
- When applying for trade-exempt baseline adjusted facility status
- For facilities emitting more than 1 million tonnes of carbon dioxide equivalent emissions
These audits provide assurance over production values and emissions intensity. For high-emissions facilities (those exceeding 1 million tonnes of CO2-e annually), the Clean Energy Regulator provides specific guidance on audit structure through their High Emissions Facility Report Template.
The audit requirements vary depending on the type of NGER report being submitted (under sections 19, 22G, 22X or 22XB of the NGER Act).
What are the main features of the Safeguard Mechanism audit?
Building on the audit requirements outlined earlier, understanding the key features of a Safeguard Mechanism audit is essential for ensuring compliance.
These audits are particularly important for high-emissions facilities, which must meet stringent assurance standards.
Legislative Framework:
- National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (Safeguard Rule)
- National Greenhouse and Energy Reporting Act 2007 (NGER Act)
- National Greenhouse and Energy Reporting Regulations 2008 (NGER Regulations)
- National Greenhouse and Energy Reporting (Audit) Determination 2009 (Audit Determination)
Audit Requirements and Process:
- Must be led by a category 2 registered greenhouse and energy auditor
- Involves reasonable assurance engagement conducted under the Audit Determination and Safeguard Rule
- Verifies:
- Covered emissions from facility operations
- Production variables
- Compliance with NGER Act record-keeping requirements (sections 19, 22G, 22X, 22XB)
To effectively prepare for these audits, organisations should understand the key risk areas that auditors will assess.
What key risks do Safeguard Mechanism auditors assess?
According to the Clean Energy Regulator, auditors must consider several critical risk areas when conducting audits for high-emissions facilities:
Key Risk Area | Assessment Requirements |
Operational Control and Facility Boundaries | · Review procedures for determining facility boundaries · Assess operational control and responsible emitter identification · Ensure compliance with NGER Regulations 2008 · Verify retention of determination records |
Facility Activities and Reporting | · Confirm all facility activities are included in the NGER report · Verify completeness of facility-related items |
Measurement Methodology | · Verify calculations follow NGER Measurement Determination 2008 · Test and validate all methodologies for compliance |
Record Keeping Systems | · Review record-keeping processes · Assess fraud prevention controls |
Production Variable Metrics | · Confirm metrics align with Safeguard Mechanism Document Schedule 1 · Verify consistency with NGER Measurement Determination 2008 |
Understanding these key risk areas helps organisations prepare more effectively for Safeguard Mechanism audits and maintain robust compliance systems.
While these frameworks present significant reporting challenges, digital solutions offer effective ways to meet these obligations.
Why digital solutions are essential for NGER and Safeguard Mechanism reporting
As we’ve seen, NGER and Safeguard Mechanism reporting demands precise data collection, complex calculations, and comprehensive record keeping. Traditional approaches using spreadsheets and manual processes fall short of today’s stringent compliance standards and audit requirements.
A purpose-built sustainability analytics and reporting platform, Sustainability Tracker (ST) provides the digital capabilities needed to meet these challenges effectively and efficiently. Drawing on over a decade of proven results in complex industrial environments, ST delivers clear advantages in multiple ways:
Data collection and validation
ST transforms how organisations collect and validate their environmental data. Automated integration with facility instrumentation and systems can capture data directly from multiple sources, including process control systems, environmental monitoring equipment, and laboratory information management systems.
This automation significantly reduces manual entry errors while providing the following:
- Real-time validation checks to identify inconsistencies
- Built-in data quality controls
- Automated cross-referencing between data sources
- Integration with enterprise resource planning (ERP) systems
- Process simulation capabilities to identify data gaps and inconsistencies
- Integration with metallurgical and materials accounting systems for mass and energy balance calculations
- Integration with laboratory information management systems (LIMS) for accurate sampling and analysis data
Calculation and methodology management
The ST digital platform ensures accurate emissions calculations by incorporating all required NGER methodologies. This includes support for Scope 1 emissions calculations (Methods 1-4) and Scope 2 emissions calculations (Methods A1 and A2), including the newer market-based Scope 2 reporting options.
The platform includes:
- Calculation of all activity data across the facility by:
- Source category (fuel combustion, energy, fugitive emissions, industrial processes, Scope 2 emissions, waste)
- Source type (such as stationary and transport energy purposes)
- Activity type (such as emissions from liquid fuel combustion)
- Fuel type, quantity and unit
- Available calculation methods
- Mass and energy balance calculations for accurate consumption quantification
- Material flow tracking across entire production processes
- Integration with other existing systems
It also provides sector-specific calculations aligned with guidelines for:
- Coal mining
- Electricity production and consumption
- Industrial processes
- Solid waste and landfill biogas management
- Wastewater handling
ST includes comprehensive testing protocols to ensure correct methodology application for each emission source, with built-in sampling and analysis procedures aligned with NGER requirements. Importantly, it maintains built-in validation of measurement methodologies and is regularly updated to ensure ongoing compliance.
Record keeping and verification
ST addresses many traditional audit limitations through comprehensive record-keeping and verification capabilities. All data is automatically documented with clear audit trails, and the systems maintain evidence of calculations, methodologies, and decision-making processes.
This systematic approach includes:
- Centralised data storage and management
- Automated validation of all data against source documentation
- Robust internal controls for data documentation and storage
- Automated documentation of all data sources
- Built-in fraud prevention controls
- Verification of facility boundaries and operational control
- Maintenance of all required supporting documentation
Streamlined reporting and submission
ISS’s digital platform simplifies the reporting process. It enables automated report generation while ensuring consistency across different submission requirements. The system can manage reporting across multiple facilities and corporate groups, automatically applying relevant thresholds and requirements.
The system supports specific Safeguard Mechanism requirements, including production variable tracking and facility baseline calculations. They can monitor compliance with declining baselines and integrate guidance from the Safeguard Mechanism document (DCCEEW, 2024) for emissions source calculations.
As reporting requirements continue to evolve, ST provides the flexibility to adapt.
Flexible and future-ready
ST is particularly valuable for organisations planning their transition to lower emissions, offering capabilities for scenario analysis, emissions reduction planning, and multi-year monitoring period management. Its comprehensive data capabilities also support emerging requirements for climate-related financial disclosures, which increasingly demand detailed emissions data verification.
The system provides a strong foundation for emerging requirements such as climate-related financial disclosures and expanded emissions reporting obligations. As audit requirements evolve to include both financial and climate expertise, ST’s comprehensive data capture and verification capabilities help ensure organisations can meet these enhanced assurance standards.
This digital infrastructure enables organisations to respond efficiently to regulatory changes while maintaining data accuracy and compliance.
About Sustainability Tracker (ST)
Designed specifically for complex industrial processes, Sustainability Tracker (ST) is an established software platform that streamlines NGER and Safeguard Mechanism reporting. The platform captures, analyses and reports on all required metrics, including:
- Scope 1 and 2 emissions calculations across all methodologies
- Energy production and consumption
- Facility baselines and compliance monitoring
- Production variables and emissions intensity
Since 2010, ST has been road-tested in complex industrial sites across nine countries. It provides the comprehensive digital solution needed for today’s stringent reporting requirements. The platform integrates seamlessly with existing systems and is continually updated to meet evolving compliance standards.
Take control of your NGER and Safeguard reporting
To learn how Sustainability Tracker (ST) can help you meet compliance obligations, automate data collection, and streamline your NGER and Safeguard Mechanism reporting, contact our expert team on +61 2 7229 5662 or info@industrialsustainabilitysolutions.com
