A guide published by Dotto
Carbon management: the emissions a business must measure, report and disclose
In Australian law, carbon management is mostly measurement. A corporate group that meets a greenhouse or energy threshold reports to the Clean Energy Regulator each year; a facility with more than 100,000 tonnes of covered emissions must also keep its net emissions within a baseline; and, phased in from financial years starting on or after 1 January 2025, larger entities put climate statements in a sustainability report beside their financial report. This guide sets out those duties in plain words, published by Dotto from the official sources listed at the foot of each page.
General information only, not legal, accounting or financial advice. The official places to check are the Clean Energy Regulator for greenhouse reporting, the Safeguard Mechanism and carbon credit units, and ASIC for sustainability reports.
Four measures, four sets of rules
Three of these are duties that switch on at a size. The fourth is a scheme the Regulator describes as encouraging people and businesses to run projects that reduce emissions or store carbon.
| Measure | Who it reaches | Where the line falls |
|---|---|---|
| An NGER report (National Greenhouse and Energy Reporting Act 2007, ss 12, 13, 19) | A controlling corporation whose group meets a threshold for a financial year. It registers, then reports yearly. | Group: 50 kilotonnes or more of emissions, or 200 terajoules or more of energy produced or consumed. One facility: 25 kilotonnes or more, or 100 terajoules or more. |
| The Safeguard Mechanism (NGER Act Part 3H; Safeguard Mechanism Rule 2015) | The responsible emitter for a designated large facility, held to a baseline on the 1 April after each financial year. | Covered emissions of more than 100,000 tonnes of carbon dioxide equivalence in a financial year. |
| A sustainability report (Corporations Act 2001, ss 292A, 1707B) | An entity with a Chapter 2M financial report that meets a size, NGER or asset test, phased in by groups. | From financial years starting on or after 1 July 2027, at least two of: revenue of $50 million or more, gross assets of $25 million or more, 100 or more employees. NGER reporters, and registered schemes, registrable superannuation entities and retail CCIVs with $5 billion or more in assets, meet separate tests. |
| Australian carbon credit units (Carbon Credits (Carbon Farming Initiative) Act 2011) | Individuals, sole traders, companies, trusts, and local, state and territory government bodies can take part, the Regulator says. | No size line. The Regulator says a participant can earn one unit for every tonne of carbon dioxide equivalent its project stores or avoids. |
Three lines on one scale
The three tonnage lines do not count the same thing. The NGER thresholds count “a scope 1 emission” or “a scope 2 emission” (s 7), so the emissions from generating the electricity, heating, cooling or steam a facility consumes count towards them (reg 2.24 of the NGER Regulations). The Safeguard line counts covered emissions, which the Act defines as scope 1 emissions only, less any kinds the safeguard rules exclude (s 22XI).
- 25,000 tOne NGER facility“25 kilotonnes or more”, scope 1 and scope 2
- 50,000 tAn NGER group“50 kilotonnes or more”, scope 1 and scope 2
- 100,000 tA Safeguard facilitymore than 100,000, covered scope 1 only
Tonnes of carbon dioxide equivalence in a financial year. The marks show order, not distance. NGER Act ss 13(1), 22XJ(1)(b); Safeguard Mechanism Rule s 8.
The small words matter too. The NGER lines say “or more”, so a group at exactly 50 kilotonnes has met its threshold. The Safeguard line uses “exceeds”: a facility at exactly 100,000 tonnes is not over it.
Where the duties meet
The laws lean on each other. The Regulator says all safeguard facilities must report under the NGER Scheme. A corporation registered under the NGER Act, or required to apply, is one of the entities s 292A of the Corporations Act brings into sustainability reporting. And a Safeguard facility over its baseline can manage the excess by surrendering Australian carbon credit units or Safeguard Mechanism credit units, or by obtaining a flexibility measure from the Regulator.
Climate Active, the voluntary label, is being wound up
As read on 9 October 2026
Climate Active is an Australian Government program that certifies entities meeting its standards as having reached ‘carbon neutral’ status. On its page last updated 24 July 2026, the Department of Climate Change, Energy, the Environment and Water says: “The Australian Government plans to end Climate Active certification. We will no longer review or monitor businesses’ voluntary climate claims.” The department’s consultation asked whether to close the program fully, or to close it while the department keeps some voluntary standards and select guidance; feedback closed at 5.00pm AEST on Friday 18 September 2026, and the department expects to announce a final decision before the end of 2026. It also says ending certification ends the Climate Active trade marks and the use of the term ‘carbon neutral’. Neither page gives a closing date. Check the department’s Climate Active page for the decision.
The five guides
- NGER reporting: who reports greenhouse emissions and energy, and by when
The six thresholds and the two deadlines.
- The Safeguard Mechanism: the baseline a large facility must stay within
The 100,000 tonne line, the 1 April test and the penalty formula.
- Who must prepare a sustainability report: the three groups and their start dates
The three tests and the three groups.
- What a climate statement contains: AASB S2 and the Act’s protection for early reports
The four headings, the first-year relief and s 1707D.
- Australian carbon credit units: how they are issued, used and handed back
From project to unit, and back.