DCCEEW consults on 2026 NGER scheme updates for fugitive emissions

DCCEEW Consultation on 2026-27 NGER Scheme Fugitive Emissions

The Department of Climate Change, Energy, the Environment and Water (DCCEEW) opened formal consultation on 9 April 2026 on proposed amendments to the National Greenhouse and Energy Reporting (NGER) scheme, targeting the 2026-27 financial year and all subsequent reporting periods. The proposed changes are not minor administrative refinements. They represent a substantive revision to the methodologies by which fugitive emissions from coal mining and oil and gas operations are calculated, and they introduce new frameworks for reporting renewable fuels, including co-processed liquid fuels. For any facility operating under the Safeguard Mechanism, the calculation methodology directly impacts the reported CO2-e tonnes, compliance status, and financial liability.

The proposed updates cover four principal areas: revised gas desorption testing standards under Method 2 for open-cut coal mine extraction; updates to Method 2A and expanded availability of Method 2B for flared methane and nitrous oxide emissions from oil and gas exploration; revised accounting under Method 2 and Method 3 for hydrogen content in natural gas transmission and distribution networks; and new guidelines for renewable fuel reporting. DCCEEW has also used this consultation to provide an update on the NGER scheme’s forward work programme, including the progress of the Expert Panel on Atmospheric Measurement of Fugitive Methane Emissions and a controlled Methane Release Study, both of which are expected to inform future methodology development.

Environmental consultants, carbon accountants, ESG practitioners, and the high-emitting facilities they advise need to engage with this consultation now, before the 2026-27 reporting period begins. The window between a DCCEEW consultation and the commencement of the financial year to which the new methods apply is narrow. Facilities that do not assess their current monitoring and data collection infrastructure against the proposed methods risk finding themselves unable to comply with reporting requirements or, worse, holding inaccurate baseline figures that underpin their Safeguard Mechanism baselines and offset strategies.

Proposed NGER Methodology Changes for Coal, Gas, and Hydrogen

The most technically significant change in the consultation package relates to Method 2 for estimating fugitive emissions from open-cut coal mine extraction. The proposed amendment updates the Australian Standard that governs gas desorption testing under this method. Gas desorption testing is the laboratory process by which the gas content of coal samples is measured, and that measurement feeds directly into the calculation of methane emissions from coal seams disturbed during open-cut mining. The Australian Standard referenced in the NGER measurement determination has historically set the procedural requirements for how those desorption tests are conducted, including sample handling, temperature conditions, and the timeframes within which measurements must be taken. Updating that standard means the underlying data inputs for Method 2 calculations will change, and facilities relying on existing testing protocols will need to review whether their laboratory procedures remain compliant with the revised standard.

For oil and gas exploration operators, the consultation proposes updates to Method 2A and a meaningful expansion of Method 2B. Method 2B applies a mass balance approach to estimating methane and nitrous oxide emissions from flaring operations. The mass balance approach calculates emissions based on the quantity of gas entering and leaving a system, rather than relying solely on emissions factors or direct measurement of flare stack outputs. Expanding the availability of Method 2B is significant because it can, in some circumstances, produce a more accurate characterisation of flared emissions where direct measurement is impractical or where flare efficiency varies. However, it also places a greater data burden on operators, who must maintain comprehensive records of gas volumes, composition, and flow rates across exploration activities. Operators currently using Method 2A exclusively will need to assess whether their data infrastructure supports a transition to or supplementation with Method 2B.

The changes to natural gas transmission and distribution reporting reflect a policy reality that has been building for several years: hydrogen is now present in some Australian natural gas networks, and existing Method 2 and Method 3 calculations were designed for networks carrying predominantly methane. The proposed amendments to Method 2 (natural gas transmission) and Method 3 (natural gas distribution) will introduce accounting rules that adjust for hydrogen content in the gas mix. This matters for reported emissions because hydrogen has a different energy content and a different combustion profile to methane. A network carrying a meaningful proportion of hydrogen will produce fewer greenhouse gas emissions per gigajoule of gas delivered, but without specific methodological guidance, operators have had limited means of accurately reflecting that in their NGER reports. The proposed amendments address that gap directly.

The consultation also introduces new guidelines for reporting renewable fuels, with specific attention to co-processed liquid fuels. Co-processing involves the simultaneous refining of fossil-derived feedstocks and bio-based or renewable feedstocks within existing refinery infrastructure, producing a blended liquid fuel product. The renewable component of that fuel has a different emissions factor to the fossil component, and determining what proportion of the final product is attributable to each feedstock requires clear methodological rules. Without standardised guid

References and related sources

• Primary source: www.dcceew.gov.au

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Published: 10 Apr 2026

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