As of January 1, 2025, Australia’s new mandatory Climate Change Reporting (CCR) laws have come into effect, ushering in a significant regulatory shift for businesses across the country. These laws are designed to enhance transparency around corporate climate-related risks and opportunities, aligning Australia with international standards like the Task Force on Climate-related Financial Disclosures (TCFD). For fuel businesses, the new regime represents both a compliance challenge and an opportunity to demonstrate leadership in sustainable practices.

Overview of the New Laws

The CCR framework mandates that certain entities disclose detailed information about their climate-related risks, strategies, and governance. The disclosures aim to help investors, regulators, and stakeholders better understand how climate change may impact businesses and how these businesses are preparing for a low-carbon future. Key elements of the reporting requirements include:

  1. Governance: Businesses must disclose their governance structures and processes for managing climate-related risks and opportunities.
  2. Strategy: Entities are required to provide insights into how climate-related risks and opportunities may affect their operations, financial performance, and strategic objectives over the short, medium, and long term.
  3. Risk Management: Companies need to explain how they identify, assess, and manage climate-related risks.
  4. Metrics and Targets: Organizations must report on the metrics used to assess climate risks and their performance against targets for managing these risks.

Staged Implementation Timeline

The implementation is phased over three groups, each defined by size thresholds and other factors:

  • Group 1 (Reporting from financial years starting on or after 1 January 2025):
    • Size Thresholds: Entities meeting at least two of the following:
      • Consolidated revenue of $500 million or more.
      • End-of-year consolidated gross assets of $1 billion or more.
      • End-of-year employees of 500 or more.
    • National Greenhouse and Energy Reporting (NGER) Reporters: Entities exceeding the NGER publication threshold (50 kilotonnes of CO₂-equivalent emissions).
  • Group 2 (Reporting from financial years starting on or after 1 July 2026):
    • Size Thresholds: Entities meeting at least two of the following:
      • Consolidated revenue of $200 million or more.
      • End-of-year consolidated gross assets of $500 million or more.
      • End-of-year employees of 250 or more.
    • Asset Owners: Registered schemes, registrable superannuation entities, or retail Corporate Collective Investment Vehicles (CCIVs) with assets under management of $5 billion or more.
  • Group 3 (Reporting from financial years starting on or after 1 July 2027):
    • Size Thresholds: Entities meeting at least two of the following:
      • Consolidated revenue of $50 million or more.
      • End-of-year consolidated gross assets of $25 million or more.
      • End-of-year employees of 100 or more.

Entities exempt from lodging financial reports under Chapter 2M, such as those registered with the Australian Charities and Not-for-profits Commission (ACNC), are not required to report under this regime

Reporting Requirements:

Affected entities must prepare a sustainability report as part of their annual report, initially focusing on climate-related financial disclosures. The Australian Accounting Standards Board (AASB) has issued standards, including AASB S2 Climate-related Disclosures, outlining the specific reporting requirements.

The Australian Securities and Investments Commission (ASIC) advises entities to implement appropriate governance arrangements and sustainability record-keeping processes to comply with these new requirements (see Sustainability reporting | ASIC)

Implications for Fuel Businesses

For fuel businesses, these laws represent both a compliance obligation and a strategic imperative. As significant contributors to Australia’s emissions profile, fuel businesses are likely to face heightened regulatory and stakeholder expectations. Key considerations include:

  • Operational Impact: Compliance may require significant investment in new systems, staff training, and external advisory services. Businesses will need to integrate climate-related data collection into their existing processes.
  • Supply Chain Considerations: Fuel businesses often operate within complex supply chains. The new laws may require them to gather emissions data from suppliers and customers, creating additional reporting challenges.
  • Stakeholder Expectations: Beyond compliance, stakeholders—including investors, customers, and regulators—will expect businesses to take proactive measures to reduce emissions and adapt to climate risks. Non-compliance or substandard reporting could harm a business’s reputation and access to capital.

Impact on Suppliers and Service Providers

The ripple effect of the CCR laws will extend beyond the fuel enterprises that are directly subject to mandatory sustainability reporting as a result of their size. Suppliers and service providers to fuel businesses—such as transport operators, equipment manufacturers, and technology vendors—may also face new demands. These could include:

  1. Data Requests: Fuel businesses may require suppliers to provide emissions data or demonstrate compliance with environmental standards to fulfill their own reporting obligations.
  2. Sustainability Requirements: Businesses supplying products and services to fuel companies may need to align their practices with climate-friendly standards, potentially incurring additional costs or requiring operational changes.
  3. Opportunities for Innovation: Service providers that offer low-carbon or energy-efficient solutions could find new opportunities for growth as fuel businesses seek to reduce their emissions and enhance sustainability.

Preparing for Compliance

To navigate the CCR framework, fuel businesses should take the following steps:

  1. Conduct a Gap Analysis: Assess current capabilities against the reporting requirements to identify gaps in governance, data, and processes.
  2. Build Internal Capacity: Invest in staff training and technology systems to enable accurate data collection and reporting.
  3. Engage Stakeholders: Work collaboratively with suppliers, customers, and investors to align expectations and secure the data needed for compliance.
  4. Seek Expert Advice: Engage external consultants or legal advisors to ensure compliance with the CCR laws and mitigate potential risks.

Opportunities for Leadership

While compliance is mandatory, the new laws offer fuel businesses an opportunity to lead by example. By demonstrating transparency and commitment to sustainability, businesses can build trust with stakeholders and gain a competitive advantage in an increasingly climate-conscious market.

Fuel businesses that proactively address climate risks and seize opportunities to innovate will be better positioned to thrive in a low-carbon future. Conversely, those that fail to act risk falling behind as regulatory and market pressures intensify.

Conclusion

Australia’s new CCR laws mark a critical step in addressing the financial and operational risks posed by climate change. For fuel businesses, the regulations present both challenges and opportunities.

While the first stage of these laws will only apply to very large fuel enterprises, smaller businesses may be required to provide new carbon footprint information to their larger business customers to assist them with the CCR reporting obligations.

Put simply, the introduction of these new laws signals a need for fuel businesses of all size to be aware of the reporting requirements of these laws and commence work on the business systems need to manage likely reporting obligations in the future.

Further Information

For more information see the ASIC Sustainability Reporting page https://asic.gov.au/regulatory-resources/sustainability-reporting/

ACAPMA

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