The National Greenhouse and Energy Reporting Act 2007 (Cth) (NGER Act) came into force on 1 July 2008. In this Update we look at the implications for Councils and their facilities.

The NGER Act requires 'controlling corporations' (constitutional corporations that do not have a holding corporation incorporated in Australia) that emit greenhouse gases or produce or consume energy to register with and report annually on their emissions or energy use.

A controlling corporation is required to meet the obligations under the NGER Act if its greenhouse gas emissions or energy use and production is in excess of set thresholds in a given financial year. While the thresholds are large for the first stage (2008-09 financial year), more organisations are likely to be affected down the track as the thresholds are due to be reduced in following financial years.

Organisations should make an assessment now of whether their activities will see them meeting the thresholds. The 2008-09 financial year thresholds are 125kt or more of CO2-e emissions for a corporate group and 500TJ or more of energy use or production. The thresholds may also be met by facilities controlled by an organisation where the facility emits more than 25kt or more of CO2-e emissions or uses or produces more than 100TJ of energy.

Corporations that meet these thresholds have until 31 August 2009 to register with the Greenhouse and Energy Data Officer (GEDO), a government body set up to administer the NGER Act. These corporations will then have until 31 October 2009 to report on their emissions and energy production and consumption.

Will the NGER Act apply to local governments?

A key issue is whether local governments are 'constitutional corporations', and therefore subject to registration and reporting duties under the NGER Act.

A 'constitutional corporation' is defined under the NGER Act as a corporation to which paragraph 51(xx) of the Constitution applies, that is a 'trading or financial corporation formed within the limits of the Commonwealth'.

Whether or not a local government is considered to be a trading or financial corporation will depend on the particular profile of the individual local government and will require consideration of whether any of its activities are 'trading activities'.

Any local governments that are unsure whether their activities will see them categorised as a trading corporation should seek legal advice.

Relevance to local government

The registration and reporting frameworks established under the NGER Act will form the basis for determining liability to purchase and surrender permits under the Australian Carbon Pollution Reduction Scheme (Scheme) when it commences in 2010.

The Federal Government's Green Paper indicates that waste is likely to be a 'covered sector' under the Scheme. Therefore the measurement and reporting of carbon emissions under the NGER Act and otherwise, may become increasingly relevant to local governments as operators of landfills and other waste processing facilities. Road and other infrastructure contracting works which a Council may be involved in could also be energy and carbon emission intensive.

Whether or not your Council is subject to the NGER Act, undertaking an assessment of the level of energy use and carbon emissions of your operations is important for preparing for the impacts of climate change and the proposed Scheme.

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