Scope 3 Emissions Estimator
Australia

Scope 3 emissions reporting in Australia: National Greenhouse and Energy Reporting Act 2007 (NGER); Australian Sustainability Reporting Standards (ASRS) based on ISSB S1/S2; Climate-related financial disclosure requirements under the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024

Australia introduced mandatory climate-related financial disclosures in 2024 through legislation requiring large entities to report in line with ASRS (Australian Sustainability Reporting Standards), which are based on ISSB S2 with Australian-specific modifications. Under ASRS 2 (Climate-related Financial Disclosures), entities must disclose Scope 1, Scope 2, and Scope 3 GHG emissions as part of their sustainability report lodged with ASIC. The phase-in begins with Group 1 entities (large listed entities with over A$500 million in consolidated revenue, large financial institutions, and asset owners) from 1 January 2025 reporting periods. Group 2 (over A$200 million revenue or over A$500 million assets) follows from 1 January 2026, and Group 3 (over A$50 million revenue or over A$25 million assets) from 1 January 2027. Scope 3 disclosure is mandatory from the second reporting year for each group, with a transition relief allowing qualitative disclosure in the first year. This makes Australia one of the first non-EU jurisdictions to mandate Scope 3 reporting for large entities, alongside the existing NGER framework which covers Scope 1 and Scope 2 for facilities exceeding the reporting threshold of 25 kilotonnes CO2e.

Regulatory context: Clean Energy Regulator (CER) for NGER; Australian Securities and Investments Commission (ASIC) for financial and sustainability reporting; Australian Accounting Standards Board (AASB) for ASRS

The Clean Energy Regulator (CER) administers the NGER framework, which requires corporations that control facilities with emissions exceeding 25 kilotonnes CO2e (or energy production or consumption exceeding 100 terajoules) to report annually. NGER covers Scope 1 and Scope 2 but not Scope 3. The NGER data is publicly available through the CER's published reports and the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015, which sets emission baselines for large emitters. ASIC will enforce ASRS compliance as part of its financial reporting surveillance programme. The AASB published ASRS 1 (General Requirements for Disclosure of Climate-related Financial Information) and ASRS 2 in 2024, incorporating ISSB S2 requirements with modifications for the Australian context. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) publishes the National Greenhouse Accounts (NGA) Factors workbook annually, which provides Australia's official emission factors for all major fuels, electricity by state and territory, transport, and industrial processes. The NGA Factors are the primary emission factor source for Australian entities.

Practical guidance for Australia

Australian entities estimating Scope 3 should use the NGA Factors workbook as the primary emission factor source for Australian activities. For electricity, Australia's grid emission factor varies dramatically by state. New South Wales has a factor of approximately 0.73 kg CO2e per kWh, Victoria approximately 0.85, Queensland approximately 0.73, South Australia approximately 0.27, Western Australia (SWIS) approximately 0.51, and Tasmania approximately 0.13 (2023-24 NGA Factors). These differences reflect the generation mix: Tasmania is predominantly hydro, South Australia has high wind and solar penetration, while Victoria relies heavily on brown coal. For Scope 3 Category 3 (upstream electricity emissions), use the state-specific NGA Factors that include full fuel cycle emission factors. For Category 1, Australian entities can use the NGA Factors spend-based approach or the ecoinvent database for product-specific factors. For transport (Categories 4, 6, 9), NGA Factors provides Australian vehicle fleet average emission factors by vehicle type and fuel. Australia's vast distances mean transport emissions are proportionally larger than for European entities: average domestic freight distances are significantly longer, and air travel for business (Category 6) is heavily used for interstate trips. For waste (Category 5), NGA Factors provides methane generation rates for Australian landfill conditions, which differ from European conditions due to climate.

Audit expectations

Australian assurance providers performing limited assurance over ASRS climate disclosures will apply ASAE 3410 (Assurance Engagements on Greenhouse Gas Statements) or ASAE 3000 (Assurance Engagements Other than Audits or Reviews of Historical Financial Information). The AUASB (Auditing and Assurance Standards Board) issued guidance on sustainability assurance in 2024. ASIC has indicated that it will review Scope 3 disclosures as part of its financial reporting surveillance, with a particular focus on the completeness of category screening, the transparency of methodology disclosures, and the consistency between Scope 3 claims and transition plans. Australian entities that report under NGER have verified Scope 1 and Scope 2 data, which provides a baseline for assurance providers to test the boundary between direct and indirect emissions. For entities in the mining and resources sector (a dominant part of the Australian economy), assurance providers will focus on Category 11 (use of sold products) because the combustion of exported coal, gas, and petroleum products by overseas customers generates massive Scope 3 emissions that often exceed the entity's Scope 1 by orders of magnitude.

Australia-specific considerations

Australia's mining and resources sector makes Category 11 uniquely significant. An Australian coal exporter selling 30 million tonnes of thermal coal annually generates approximately 75 million tonnes of CO2e in Category 11 emissions (from combustion by overseas power stations), compared to perhaps 1 to 3 million tonnes in combined Scope 1 and Scope 2 from mining operations. This makes Australian mining companies' Scope 3 disclosures among the largest and most scrutinised globally. The Safeguard Mechanism reforms (effective July 2023) require covered facilities to reduce Scope 1 emissions by 4.9% per year, but do not directly address Scope 3. However, investors and proxy advisers increasingly use Scope 3 data to assess transition risk for Australian resource companies. Australia's National Greenhouse Accounts reporting cycle follows the financial year (1 July to 30 June), which may not align with calendar-year CSRD reporting for Australian subsidiaries of EU parents. The CER publishes a facility-level emissions dataset that provides Scope 1 data for major Australian emitters, which can be used as a data source for your Scope 3 Category 1 calculations if you procure from NGER-reporting entities. Australia's renewable energy target and the growth of rooftop solar (approximately 3.6 million installations as of 2024) are reducing grid emission factors progressively, but state-by-state variation remains wide.

Common inspection findings

ASIC's 2024 review of climate-related disclosures by ASX 200 companies found that only 45% of companies that voluntarily disclosed Scope 3 provided a breakdown by GHG Protocol category, with the remainder reporting a single aggregate figure.

The CER identified that some NGER reporters incorrectly classified fugitive methane emissions from coal mines as Scope 3 rather than Scope 1, understating their direct emissions and potentially causing double counting in the value chain.

Australian assurance providers found that mining companies' Category 11 estimates frequently used outdated coal quality data (calorific value and carbon content) that did not match the actual product specifications in sales contracts, introducing errors of 5% to 15%.

ASIC noted that several listed companies disclosed Scope 3 reduction targets without specifying which categories were included in the baseline, making it impossible to assess whether the targets covered the material emissions.

The CER's facility-level data revealed discrepancies between NGER-reported Scope 2 figures and the Scope 2 figures in the same entities' sustainability reports, suggesting that some entities applied different grid emission factors or organisational boundaries in the two reports.