Document ID: chunk:federal_register_of_legislation:F2024L01472:body:0:p68
Version: federal_register_of_legislation:F2024L01472
Segment Type: other
Provision Reference: 
Character Range: 194411–197612

SR1 proposed requiring an entity to prioritise relevant methodologies in NGER Scheme legislation. This was consistent with Treasury's second consultation paper in June 2023, which indicated that the Australian Government would require an entity to apply methodologies set out in NGER Scheme legislation as the default methodologies in measuring its GHG emissions. Considering stakeholders' interest in closer alignment with IFRS S2, the AASB decided to align with the GHG emission measurement requirements set out in IFRS S2 paragraph 29(a), and therefore prioritise the GHG Protocol, and not NGER Scheme legislation, as the default framework for measuring GHG emissions.
 3.             The AASB considered that aligning with IFRS S2 would:
          1.                     support interoperability with other GHG reporting frameworks, such as European Sustainability Reporting Standards (ESRS), that also refer to the GHG Protocol;
          1.                    allow flexibility for both NGER and non-NGER reporters to determine the most appropriate and cost-effective methods to report their GHG emissions, including determining appropriate reporting boundaries for GHG emissions; and
          2.                     facilitate implementation by avoiding the need for an entity to determine whether applying a method in NGER Scheme legislation is practicable.
 4.             AASB S2 paragraphs B22 and B29 require an entity to use emission factors that best represent the activity that is generating the GHG emissions. This requirement would apply irrespective of whether an entity measures GHG emissions in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) or in accordance with the methods required by a jurisdictional authority or an exchange on which the entity is listed.

Definition of greenhouse gases
 1.             The AASB decided to retain the IFRS S2 definition of greenhouse gases as the seven greenhouse gases listed in the Kyoto Protocol, as proposed in ED SR1.
 2.             The AASB observed that nitrogen trifluoride (NF3) is not listed in NGER Scheme legislation as a class of greenhouse gas. Upon considering feedback received on ED SR1, the AASB decided to retain NF3 in the definition of greenhouse gases. This is because it would:
          1.                     not conflict with the NGER Scheme legislation—it would be an addition to the requirements in NGER Scheme legislation;
          1.                    be unlikely to have a significant effect on Australian entities reporting under NGER Scheme legislation. The CSIRO informed the AASB that NF3 emissions are currently immaterial in Australia because NF3 is primarily produced in the manufacture of semiconductors, liquid crystal display (LCD) panels, certain types of solar panels and chemical lasers and Australia does not have a significant presence in the manufacturing of these items; and
          2.                     accommodate the potential increase of NF3 in Australia, in particular, considering Australia's policy ambition to be a renewable energy superpower with allied downstream manufacturing industries which may lead to more NF3 emissions