Originally published by Perry Williams of The Australian.
14.09.2026
Treasury has floated a plan to significantly scale back demands on corporate Australia to report indirect emissions after complaints over the cost and red tape involved.
Should it side with business, any reprieve offers the chance for a pullback on climate disclosures amid a broader reckoning on achieving net zero goals.
A mandatory climate disclosure regime for large Australian companies was introduced under a staggered model set to kick in over three years from January 2025 and started by the Albanese government.
Under the scheme, large companies and asset managers were required to reveal climate-related risks along with management strategies and emissions targets to investors.
A review of the scheme has proposed changes meaning businesses would not be responsible for reporting their own scope 3 emissions primary data due to cost and compliance concerns, while a compulsory audit of climate disclosures may be pushed back to 2035 from 2030.
The review echoes international whiplash by business and politicians from elements of climate compliance. The Iran war has reignited a global energy supply shock and spurred efforts by countries including Australia to boost domestic fuel sovereignty.
The US Environmental Protection Agency has removed multiple online resources for business on how to measure Scope 3 emissions as part of a broader reversal on climate obligations under Donald Trump.
Treasury originally outlined three models with the department supporting a scheme which did not require mandatory assurance, or auditing, of statements until July 2030.
However, a Treasury paper has now canvassed delaying mandatory audits until 2035 to support “international interoperability” after the EU delayed equivalent demands for sustainability reporting.
A plan for companies to move to a more extensive form of audit known as reasonable assurance may also be dropped.
“The benefit of reasonable assurance may not fully justify the compliance costs, where factors such as the availability of primary data, evolving practice on materiality and the uncertainty of forward-looking climate outlooks have all been raised as significant challenges that may not warrant implementing reasonable assurance,” the Treasury paper said.
“Sustainability reporting is a new regime, and early implementation feedback suggests that entities are facing uncertainty in practice when applying certain aspects of the disclosure and assurance standards, and legislation.”
This follows Woodside Energy dumping its Scope 3 investment and abatement targets in August as part of a “disciplined decision” made by new chief executive Liz Westcott.
While Scope 3 emissions are outside the direct control of a company and include those of suppliers, customers and employees commuting, they can account for a large chunk of an emitter’s direct and indirect carbon impact.
Big banks are also rethinking their financing of carbon-intensive energy with National Australia Bank chief executive Andrew Irvine stating Australia needed to extract more gas and liquid fuels and finance the related infrastructure.
More broadly, the Albanese government is wrestling with a raft of practical challenges in its bid to show meaningful progress toward hitting a net zero emissions goal by 2050.
Energy Minister Chris Bowen was warned the nation must cut its reliance on carbon credit subsidies to reach net zero with the clampdown meaning 4 per cent of Australian farmland may be tapped to offset emissions.
A review of the Safeguard Mechanism will also determine how it operates beyond the end of the decade when current policy settings expire, and shape how Australia’s largest emitters contribute to the nation’s 2035 emissions reduction target.
While the scheme already requires about 220 of Australia’s highest-emitting industrial facilities to progressively reduce their emissions intensity through declining baselines, the consultation raises the prospect those annual reductions could become more stringent after 2030.
Mr Bowen’s department launched a cross-agency working group to fight back against “climate misinformation” it claims is thwarting the nation’s troubled green energy transition.
Carbon market companies also recently formed a new lobby group – Growing Australia’s Nature Economy – to counter what they say is “misinformation” and “scaremongering”.
Jim Chalmers has previously said mandatory climate reporting offered investors and companies “the transparency, clarity and certainty they need to invest in new opportunities as part of the net zero transformation”.
A joint report by national science agency CSIRO and the Australian Energy Market Operator found electricity generation costs may surge by more than 50 per cent after 2030 for the power sector to hit net zero emissions by mid century, as the nation replaces ageing coal-fired plants.