Australia’s Mandatory Emissions Reporting

Australia’s climate policy landscape quietly but significantly changed in January 2025, when the government introduced mandatory climate-related financial disclosure laws. These rules bring Australia in line with international standards like the Task Force on Climate-related Financial Disclosures (TCFD) and the new International Sustainability Standards Board (ISSB) framework.

While most farms won’t need to file formal disclosures directly to regulators, the ripple effects across agricultural supply chains will be profound. Any farmer supplying to major processors, retailers, banks, or exporters can expect new questions about emissions data, energy use, and climate risks.

In short: this isn’t just a corporate compliance issue—it’s a farm business issue.

What the law actually requires (ASRS & AASB S2)

The new rules sit under the Australian Sustainability Reporting Standards (ASRS), issued by the Australian Accounting Standards Board (AASB). The key standard for emissions and climate-related data is AASB S2: Climate-related Financial Disclosures, which mirrors the ISSB’s global IFRS S2 framework.

Under AASB S2, large entities must publicly report:

• Governance: How the business oversees climate-related risks and opportunities.
• Strategy: How climate change may affect its business model and resilience.
• Risk management: The processes used to identify, assess, and manage climate-related risks.
• Metrics and targets: Data on greenhouse gas (GHG) emissions—Scope 1, Scope 2, and Scope 3—plus any climate targets or transition plans.

For agriculture, the last category—metrics and targets—is the game changer. Large agribusinesses that buy from Australian growers will now need to quantify emissions associated with their supply chains. That means they’ll need data from producers like you.

Who must report—and when

Reporting will be rolled out over three years, based on the size of the company and its financial reporting obligations.

Phase 1 (from 1 July 2024):

• Applies to “large” listed and unlisted entities with over $500 million in consolidated revenue or $1 billion in assets.
• Think large supermarket chains, beef processors, exporters, fertiliser manufacturers, and big banks.

Phase 2 (from 1 July 2026):

• Captures mid-sized entities with over $200 million in revenue or $500 million in assets.
• Likely includes many agribusinesses, major cooperatives, and vertically integrated livestock or grain businesses.

Phase 3 (from 1 July 2027):

• Brings in smaller reporting entities over $50 million in revenue.
• This could touch larger family-owned agribusinesses and regional processors.

So even if your farm isn’t directly reporting, those you sell to likely will be—and soon.

Understanding Scope 1, 2, and 3 emissions

When buyers ask for your “Scope 1–3 data,” here’s what they mean in plain English:

• Scope 1: Direct emissions from activities you control. On-farm, this includes fuel used by tractors, methane from livestock, or emissions from fertiliser application.
• Scope 2: Indirect emissions from purchased electricity or energy. For instance, power used in sheds, irrigation systems, or cooling facilities.
• Scope 3: Emissions from your broader supply chain—not directly under your control but linked to your operations. For a farmer, this could include the manufacture of inputs (fertiliser, feed, chemicals) or the transport and processing of your outputs.

For most farm businesses, Scope 1 and 2 emissions will be the focus of measurement and reporting. But buyers will view your farm’s data as part of their Scope 3 inventory—meaning they’ll likely expect at least basic emissions estimates from suppliers.

How this affects you: supply chains and finance

Even without direct reporting obligations, farms will be indirectly pulled into compliance through two main channels:

1. Supply chains:
Large food companies and exporters now need emissions data from their suppliers to meet their disclosure duties. Expect questions like:

• “Do you track your farm’s carbon footprint?”
• “Can you provide emissions data per tonne of beef, grain, or milk?”
• “How are you managing methane or fertiliser emissions?”

Contracts, auditing processes, and sustainability certifications may soon require these disclosures as standard.

2. Banks and finance:
The major banks—many of which fall under Phase 1 reporting—are already embedding climate risk into lending assessments. They need to know their exposure to carbon-intensive activities. Over time, that could influence:

• Loan eligibility or conditions
• Interest rates linked to sustainability performance
• Access to green financing products

For forward-thinking producers, this signals both a challenge and an opportunity: farms that can produce verified low-emissions data may have a competitive edge.

What proactive farmers can do now

You don’t need a climate accounting degree to start preparing. Here are five practical steps:

1. Map your emissions sources.
Start with the obvious: fuel, energy, livestock, fertiliser, waste. Identify where most emissions arise and where reductions might be achievable or cost-effective.

2. Keep better records.
Data is the foundation. Track energy bills, diesel use, and inputs systematically so that when processors or banks request details, you’ve got credible numbers ready.

3. Benchmark your footprint.
Tools like FarmPrint or the Greenhouse Gas Accounting Framework (GAF) for Australian agriculture can estimate emissions by enterprise type. These frameworks follow accepted national methods consistent with the National Greenhouse Gas Inventory.

4. Discuss expectations with your buyers.
Ask your grain buyer, meat processor, or dairy company what ESG data they’ll expect. Clarity early on helps avoid rushed compliance later.

5. Seek technical support.
Industry bodies (like MLA, GRDC, or Dairy Australia) and state agriculture departments are developing tailored guidance for producer-level reporting. Engaging with these resources now helps you stay ahead of the curve.

Tools and frameworks every farmer should know

FarmPrint

Developed by CSIRO and supported by the agricultural industry, FarmPrint calculates a farm’s full emissions profile across commodity types. It outputs data that can be shared with supply chain partners in a format aligned with national and international standards.

Greenhouse Gas Accounting Framework (GAF)

Created by the University of Melbourne’s Primary Industries Climate Challenges Centre, GAF helps estimate on-farm emissions and mitigation options. It’s the scientific backbone of tools like FarmPrint and supports consistent, credible reporting across the sector

Using these tools demonstrates due diligence and provides baseline data for future benchmarking, audits, or sustainability targets.

A changing conversation about value

For decades, agricultural value was measured in tonnes, litres, and carcass weights. In a decarbonising world, carbon intensity—emissions per unit of output—will increasingly define value, market access, and reputation.

Sustainability credentials are already shaping global markets:

• European retailers now demand verified low-emissions produce.
• Australian beef and grain exporters are being asked to prove climate claims under the EU’s Carbon Border Adjustment Mechanism (CBAM) rules.
• Domestic processors are linking farmer engagement in emissions reduction programs to long-term contracts.

Farmers who can articulate their emissions story—backed by numbers—will be best placed to access high-value, low-carbon markets.

Common misconceptions

• “My farm’s too small to worry about this.”
  True, you may not face direct reporting obligations. But your supply chain partners likely will, and they’ll need your data to comply.
• “We already report under NGER—so that’s enough.”
  The National Greenhouse and Energy Reporting scheme (NGER) covers large emitters only. The new ASRS rules are broader, focused on financial and climate disclosures for all large entities.
• “It’s all just about greenhouse gases.”
  Not quite. The ASRS/ISSB standards also cover climate-related risks such as drought, flood, and transition risk. Being prepared involves resilience planning, not just emissions counting.

What success looks like

Over the next few years, leading farm businesses will:

• Maintain an internal emissions inventory using industry tools.
• Engage early with processors or finance providers on disclosure formats.
• Set practical, achievable on-farm emission reduction strategies.
• Use credible data to demonstrate environmental performance and unlock new markets or finance.

The learning curve may seem steep, but early adoption will pay off—as markets and regulators increasingly reward transparency and climate leadership.

The bottom line for Australian farmers

Mandatory emissions reporting is reshaping how Australian agriculture will interact with markets, banks, and policymakers over the next decade. While compliance obligations fall mostly on big players, every link in the supply chain—down to individual farms—will feel the impact.

By taking small, proactive steps today, farmers can future-proof their businesses, ensure continued market access, and turn compliance into a source of competitive advantage.