Navigating the new transport carbon reporting requirements in 2025

Anyone who’s worked in Australian freight knows the sector’s been through its fair share of regulatory curveballs — from NHVR reforms to fuel excise changes — but 2025 is shaping up to be a year that redefines the rulebook entirely.

The introduction of mandatory climate-related financial reporting marks a major shift. For the first time, transport businesses will be legally required to measure, report, and disclose their carbon emissions under the Corporations Act, starting with large entities. And it’s not just a corporate exercise — this affects operators right down the supply chain, from linehaul carriers to last-mile couriers.

I still remember sitting in a compliance meeting in early 2024, watching a CFO’s face drop when Scope 3 emissions came up. “We can’t control what we don’t own,” he said — and that’s the catch. The new regime expects companies to measure everything from their fuel use to emissions from outsourced freight. It’s a big ask, but not an impossible one if tackled early and strategically.

As the regulatory landscape shifts, platforms like Cario empower transport operators with real-time emissions tracking and data-driven reporting, while industry partners such as Freight People help businesses build the capability and talent needed to navigate compliance with confidence and turn sustainability into a competitive advantage.

This article breaks down what’s changing, who it impacts, and how transport operators — large and small — can prepare for compliance without losing sleep (or business).

The 2025 Mandatory Climate Reporting Framework

Australia’s new mandatory climate reporting framework kicks off on 1 January 2025 under the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024. This legislation lays the foundation for how businesses disclose their environmental impact — and it’s modelled on international standards, meaning Australia is aligning with the global push for corporate transparency.

Key Dates And Thresholds

Reporting begins in stages, starting with the biggest players — known as Group 1 entities — before expanding to smaller groups over time.

While small-to-medium operators might think this doesn’t apply yet, the knock-on effect through supply chain reporting will reach everyone sooner rather than later. Group 1 entities will need emissions data from their subcontractors and freight partners to satisfy their Scope 3 obligations, creating a ripple effect throughout the transport sector.

The Role Of The ASRS And AASB S2

From 2025, entities will report using the Australian Sustainability Reporting Standards (ASRS) — specifically AASB S2: Climate-related Disclosures. These standards mirror the global IFRS S2 framework, which focuses on governance, strategy, risk management, and climate metrics.

To put it simply, if your business falls within the reporting thresholds, you’ll need to:

• Disclose your Scope 1 (direct fuel use) and Scope 2 (purchased energy) emissions.
  
  

• Disclose Scope 3 emissions from 2026 onward — covering all indirect emissions in your supply chain.
  
  

• Provide assurance that your data is accurate — meaning your emissions will need to stand up to auditor scrutiny.

As someone who’s worked with fleet operators scrambling to align with the NGER scheme, I can say this: getting ahead on data quality now will save headaches later. The biggest issue I see? Businesses don’t have the right systems or data-sharing processes with their logistics partners. Without those, calculating Scope 3 emissions accurately becomes a guessing game — and that’s exactly what regulators want to stamp out.

What Needs To Be Reported

The reporting framework revolves around four pillars — each designed to give a full picture of how climate risk affects your operations and finances:

1. Governance: Who’s responsible for managing climate risks in your business? This includes board oversight and management accountability.
   
   

2. Strategy: How climate risks and opportunities are factored into your planning — like fleet renewal, route optimisation, or modal shifts.
   
   

3. Risk Management: How you identify, assess, and manage emissions and transition risks (such as carbon pricing or regulatory changes).
   
   

4. Metrics and Targets: Your emissions inventory (Scope 1–3), reduction goals, and progress reporting.

For transport operators, that last pillar will likely require integrating telematics data, fuel management systems, and supplier reports — no small task, but entirely achievable with the right groundwork.

Transport Sector Implications: The Challenge Of Scope 3

When the government confirmed that Scope 3 emissions reporting would become mandatory from 2026, many transport operators groaned — and for good reason. Unlike fuel consumption or electricity bills, these emissions come from sources outside your direct control. Think subcontracted freight runs, outsourced warehousing, and even the linehaul carriers you partner with to get freight across the Nullarbor.

Why Scope 3 Is The Tough One

Australia’s transport sector produces roughly 21 per cent of national greenhouse gas emissions — second only to energy generation. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) has projected that transport could overtake energy as the largest emitter by 2030 if current trends continue.

For operators, the Scope breakdown looks like this:

In practice, Scope 3 can make up 70–90 per cent of a logistics company’s total carbon footprint. That’s why it’s the focus of Australia’s 2025–2030 disclosure roadmap.

A Real-World Example: A Mid-Tier Freight Forwarder

Take a Sydney-based freight forwarder turning over around $300 million a year. They operate their own local fleet (Scope 1), lease warehouse space with grid-supplied electricity (Scope 2), and subcontract interstate linehaul and regional deliveries (Scope 3).

Once their main client — a Group 1 listed retailer — starts mandatory climate reporting in 2025, that client will request emissions data for all freight movements. The forwarder suddenly needs to calculate emissions for every outsourced leg of the journey. Without accurate trip-level data, they risk being dropped from the retailer’s preferred supplier list.

This kind of trickle-down compliance pressure is already happening in tender processes. Major retailers and manufacturers are adding clauses that require carbon disclosure from freight providers.

As one operations manager recently told me, “We used to compete on price and on-time delivery. Now carbon intensity is the third metric.”

Data: The New Fuel Of Compliance

The transport industry has always been data-driven — kilometres, litres, and pallets per load — but the quality and transparency of that data now directly affect compliance. From 2025, NGER-registered companies must ensure emissions data aligns with the Australian Sustainability Reporting Standards (ASRS), using consistent calculation methodologies.

To keep up, operators are beginning to:

• Use telematics and fuel cards to capture real-time fuel burn data for Scope 1.
  
  

• Request well-to-wheel emission factors from suppliers and energy providers for Scope 2.
  
  

• Develop shared data portals with subcontractors to calculate Scope 3 emissions per consignment or tonne-kilometre.

In other words, if you’re still tracking fuel receipts in Excel, 2025 will be the year that process hits the wall.

Supply Chain Pressure — The Domino Effect

The introduction of Group 1 reporting means climate disclosure is no longer confined to listed companies. Even smaller carriers that never dreamed of filing a sustainability report will feel the pinch.

Larger businesses are now demanding carbon data from every link in their supply chain. SMEs supplying those companies will need to measure and share emissions if they want to stay competitive.

Here’s a simple illustration of how that cascade works:

The bottom line? Even if you’re not yet legally required to report, your customers might be — and they’ll expect you to help them meet their obligations.

Checklist: Getting Ahead On Scope 3

Here’s a short action list I’ve been using when advising transport businesses ahead of the 2025 rollout:

1. Map Your Emissions Boundaries: Identify where Scope 1 ends and where Scope 3 begins — include outsourced legs, warehousing, and supplier transport.
   
   

2. Collect Activity Data Early: Start tracking kilometres, tonne-kilometres, and fuel types across subcontractors.
   
   

3. Align with NGER Factors: Use the National Greenhouse Accounts (NGA) emission factors for consistency.
   
   

4. Engage Suppliers: Formalise carbon data requests in your supplier contracts.
   
   

5. Verify and Store Records: Keep audit-ready records for at least five years — assurance requirements will expand by 2026.

Those who treat carbon reporting as part of everyday operations, not a last-minute compliance scramble, will find the process manageable — even advantageous when bidding for work.

Navigating Compliance: Practical Steps

Preparing for climate reporting isn’t just a paperwork exercise — it’s about embedding measurable sustainability practices into your freight operation. Whether you’re a Group 1 entity gearing up for 2025 or a smaller operator feeding data into someone else’s report, getting your systems, data, and governance right will make all the difference.

When I first helped a large eastern seaboard carrier prepare for NGER compliance a few years back, the biggest challenge wasn’t technology — it was mindset. People saw emissions reporting as an “environmental issue,” not a business risk. That attitude is shifting fast. Under the new regime, climate statements carry the same weight as financial reports, and directors can be held liable for errors.

Step 1: Review And Classify All Emission Sources

Start by conducting a comprehensive emissions review across your transport operations. This means documenting fuel types, distances, fleet composition, and any subcontracted freight legs.

For most operators, the emissions footprint breaks down roughly as follows:

The goal isn’t perfection on day one — it’s completeness and consistency. From 2026, incomplete data won’t cut it, especially once assurance over climate reporting becomes mandatory under ASRS.

Step 2: Strengthen Data Systems And Governance

If your freight business still relies on spreadsheets, now’s the time to modernise. You’ll need systems that can capture, verify, and consolidate emissions data in line with AASB S2: Climate-related Disclosures.

A few practical actions:

• Nominate a Reporting Lead: Assign someone responsible for collecting, validating, and storing emissions data — ideally someone with both operational and compliance experience.
  
  

• Standardise Inputs: Use consistent units (litres, tonne-kilometres, kWh) across all depots and subcontractors.
  
  

• Integrate Data Feeds: Link telematics, fuel management, and freight-booking systems to create an auditable record.
  
  

• Define Oversight: Ensure board-level visibility. Under the Corporations Act s. 299(1)(e), directors are responsible for the accuracy of the climate statement.

A well-structured data governance framework not only streamlines compliance but also helps you identify high-emission routes and assets for early intervention.

Step 3: Develop A Carbon Management Plan

The smartest operators are shifting from “reporting” to active emissions management. A credible carbon plan includes:

1. Baseline Year: Establish a reference year for measuring progress — 2023 or 2024 works well ahead of 2025 disclosures.
   
   

2. Reduction Targets: Set realistic, time-bound goals for Scope 1 and 2 reductions (e.g. 20 per cent by 2030).
   
   

3. Fleet Transition Strategy: Map out replacement schedules favouring low- or zero-emission vehicles (battery electric, hydrogen, or renewable diesel compatible).
   
   

4. Efficiency Measures: Review route planning, backloading, and idle-time policies to trim fuel use.
   
   

5. Offsets: Use carbon credits only for residual, hard-to-abate emissions — regulators expect clear justification.

When I worked with a regional bulk carrier in Dubbo, they started small: switching two short-haul runs to HVO-ready trucks and installing solar at their depot. Within a year, fuel costs dropped 8 per cent, and they could provide verified data to a major food manufacturer client — keeping that contract when competitors couldn’t.

Step 4: Build Transparency And Assurance Early

By 2026, large reporters must obtain limited assurance over their climate disclosures — effectively, a sustainability audit. Starting early makes that process smoother.

Prepare by:

• Keeping all supporting documentation — invoices, meter readings, telematics reports — in a central repository.
  
  

• Aligning your emission factors with the National Greenhouse Accounts (NGA).
  
  

• Documenting methodologies, especially for any estimation.
  
  

• Engaging your auditor or consultant early to confirm acceptable calculation boundaries.

ASIC has made it clear: temporary liability relief until 2028 isn’t a “free pass.” The regulator expects a clear demonstration of progress, not excuses.

Step 5: Communicate Internally And With Supply Partners

Freight compliance doesn’t happen in isolation. From warehouse managers to owner-drivers, everyone needs to understand why data accuracy matters.

Hold toolbox talks explaining how fuel logs and trip data feed into national reporting. Consider adding carbon data clauses to subcontractor agreements. The aim is simple — make emissions reporting a normal part of doing business, like fatigue logs or maintenance schedules.

Timeline: Climate Reporting Readiness For Transport Operators

Supporting Regulatory And Technological Shifts

The 2025 climate reporting rollout isn’t happening in isolation. It’s backed by a wave of national reforms targeting safer, cleaner, and smarter freight movement. From zero-emission vehicles (ZEVs) to HVNL reform and improved data frameworks, the entire ecosystem is evolving to help operators reduce and verify their carbon footprint.

1. Zero-Emission Heavy Vehicles And The Infrastructure Challenge

Australia’s decarbonisation strategy places heavy emphasis on Zero-Emission Heavy Vehicles (ZEHVs) — including battery electric and hydrogen fuel cell trucks. The National Electric Vehicle Strategy and Fuel Efficiency Standard (2024) both align to accelerate uptake, supported by state-level programs like NSW’s Drive Electric NSW initiative.

But the transition isn’t without roadblocks.
When you’re hauling 42 tonnes of refrigerated freight from Melbourne to Brisbane, the idea of recharging midway at Tarcutta sounds more like a logistical headache than a green revolution. The current charging infrastructure for long-haul freight remains patchy, especially across regional corridors like the Newell or Stuart Highways.

Then there’s the issue of axle mass and pavement wear. ZEHVs are heavier due to their batteries, putting added pressure on flexible road surfaces. The Department of Infrastructure’s National Road Network Sustainability Review (2025) is assessing these impacts, exploring options like increased axle limits and targeted funding for high-wear freight routes.

The good news is the government isn’t ignoring operators’ realities. Renewable diesel (HVO) and biogas trials have been greenlit as transitional fuels under the National Freight and Supply Chain Strategy update, giving existing diesel fleets a pathway to compliance while infrastructure catches up.

Here’s a quick snapshot of transitional options currently gaining ground:

For most transport businesses, the best short-term strategy is hybrid adoption — using renewable fuels now, while planning for ZEV integration once infrastructure stabilises.

2. HVNL Reform: A Shift Toward Performance And Safety Management

The ongoing Heavy Vehicle National Law (HVNL) reform — now in its implementation phase across 2025–2026 — is a game-changer for both safety and emissions accountability. The new framework moves away from the rigid, prescriptive rules that operators have struggled with for years, towards a risk-based, performance-driven model.

The National Transport Commission (NTC) and NHVR have introduced several key features relevant to climate compliance:

• Safety Management Systems (SMS): Accredited operators must now embed safety and environmental performance into their SMS. This includes identifying fuel use and emissions risks, alongside fatigue and maintenance.
  
  

• Alternative Compliance Options (ACOs): Operators demonstrating strong governance (including data-driven sustainability reporting) can access flexible compliance pathways. This may reduce audit frequency or extend operating allowances.
  
  

• Technology and Data Framework: A formal system recognising digital technologies — beyond existing IAP or EWD programs — allows certified emissions-tracking solutions to be used for verification.

I recall a pilot in Brisbane where a national carrier used telematics-linked fuel data as part of their SMS submission. The NHVR acknowledged it as part of their “safety and sustainability evidence.” That’s where we’re heading: emissions data integrated directly into regulatory compliance.

3. Data Stewardship And Digital Assurance

Under the reformed HVNL, a technology and data assurance framework is being established to standardise how operational data — including emissions metrics — is collected, stored, and shared.

This framework has three important aims:

1. Recognising New Technologies: Enables operators to use innovative systems (like automated fuel tracking or AI-driven trip carbon calculators) without breaching regulatory definitions.
   
   

2. Data Protection: Sets clear governance rules for how emissions data can be accessed by regulators or clients.
   
   

3. Assurance and Traceability: Creates audit-ready records, ensuring consistency between operational and ASRS climate disclosures.

From a compliance consultant’s view, this is one of the most practical developments in years. It bridges the gap between transport operations and sustainability reporting — an area that’s been disconnected for too long.

4. International Context: Aligning With Global Standards

Australia’s 2025 framework isn’t a standalone initiative. It mirrors the global momentum toward mandatory climate-related financial disclosures, already underway in major economies:

For Australian logistics businesses working with international partners — especially in Europe — aligning your carbon accounting practices early will save double-handling. EU-based clients are already demanding emission data from Australian freight providers to comply with CSRD’s Scope 3 requirements.

5. Where Technology Meets Compliance

Digital innovation is now the backbone of emissions management. Across the Australian market, forward-thinking operators are leveraging data integration tools to automatically calculate GHG emissions per shipment or route, based on the National Greenhouse Accounts (NGA) factors.

It’s becoming normal to see tender documents asking for “emission intensity per tonne-kilometre” as a decision metric. Those who can produce credible data in seconds, not weeks, will have a clear edge.

When advising a Queensland-based carrier earlier this year, I saw firsthand how linking vehicle telematics with invoicing data simplified reporting. Within six months, they could report both delivery performance and carbon intensity per consignment — a win for both compliance and competitiveness.

The clock is ticking for the transport industry. By 1 January 2025, climate reporting will no longer be a “nice to have” — it’s a legal requirement. Whether you operate a national fleet or subcontract to a major retailer, these changes will influence how you collect data, manage emissions, and win work.

In my two decades working with Australian freight businesses, I’ve seen plenty of regulatory overhauls, but none as far-reaching as this one. The difference this time is accountability. Every litre of fuel, every kilometre travelled, and every tonne of freight moved will soon feed into a climate statement under the Corporations Act.

The good news? Businesses that start early — reviewing data systems, engaging their suppliers, and building a clear emissions plan — will be well placed to comply and even gain a commercial edge. Those who delay will find themselves scrambling when customers and auditors come calling.

The future of Australian freight isn’t just about moving goods — it’s about moving responsibly, with transparency and trust.

Conclusion

• Mandatory climate reporting begins on 1 January 2025 for Group 1 entities under the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024.
  
  

• Reporting follows AASB S2 (ASRS), requiring disclosure of Scope 1 and 2 emissions in 2025 and Scope 3 by 2026.
  
  

• Transport and logistics face unique challenges, as Scope 3 includes outsourced freight and supplier emissions.
  
  

• Compliance steps include auditing data systems, defining emissions boundaries, setting reduction targets, and engaging auditors early.
  
  

• Regulatory reforms like HVNL modernisation, zero-emission vehicle policy, and data frameworks support transition readiness.
  
  

• Failure to comply can attract penalties under the Corporations Act — including legal liability for directors.

In short: Get your carbon data in order now — the road to compliance starts long before the deadline.

Frequently Asked Questions

What Are Scope 1, Scope 2 And Scope 3 Emissions In The Transport Sector?

Scope 1 covers direct fuel use from owned vehicles; Scope 2 covers indirect emissions from electricity (such as EV charging or warehouse power); and Scope 3 captures everything else in the value chain — subcontracted freight, supplier deliveries, and business travel. For most transport businesses, Scope 3 will form the majority of total emissions.

Who Must Start Reporting From January 2025?

Group 1 entities — large listed companies and major corporates meeting two of three thresholds (revenue ≥ $500 m, assets ≥ $1 billion, ≥ 500 employees). However, smaller carriers working under these companies will be indirectly affected as data suppliers for Scope 3 reporting.

How Does The Heavy Vehicle National Law Reform Support Climate Compliance?

The reformed HVNL introduces Safety Management Systems (SMS) that include environmental performance metrics. Operators with strong emissions governance and reliable data systems can access Alternative Compliance Options (ACOs) — reducing audit frequency and aligning operational data with sustainability reporting.

What Are The Penalties For Failing To Comply With The New Reporting Rules?

Non-compliance with mandatory reporting under the Corporations Act can lead to both civil and criminal penalties. Civil penalties can exceed A$1.65 million for individuals, and directors may face legal exposure if their signed climate statements contain false or misleading data. Temporary liability relief applies until 2028 for specific “protected statements”, but ASIC expects active progress, not delay.

How Can Smaller Freight Operators Prepare If They’re Not Legally Required Yet?

Start collecting data now. Even if you’re not mandated to report, your clients will need your emissions data to meet their own Scope 3 obligations. Track fuel and mileage accurately, request emission factors from suppliers, and establish a consistent reporting format. Being ready early positions you as a reliable, low-risk partner in an increasingly carbon-conscious supply chain.