Emission factors are changing. Here’s what to check.
Emission factors are one of the quieter parts of carbon reporting.
They sit in the background, helping turn business activity into estimated greenhouse gas emissions. Depending on the source, that activity might be litres of fuel, kilowatt-hours of electricity, tonnes of freight, kilograms of waste, refrigerant leakage, kilometres travelled, or dollars spent.
But carbon accounting is not as simple as multiplying everything by one neat factor. Different emissions sources use different calculation methods. Some are activity-based. Some use supplier-specific data. Some use hybrid methods. Some, particularly in Scope 3, may use spend-based estimates where better data is not available.
So when emission factors are updated, the impact depends on what you are measuring, how you are measuring it, and how material that source is to your overall footprint.
The Ministry for the Environment | Manatū Mō Te Taiao has released its updated 2026 Measuring Emissions Guide for New Zealand, including new emission factors and supporting files. In Australia, the Department of Climate Change, Energy, the Environment and Water publishes the National Greenhouse Accounts Factors, which provide emission factors and methods to help companies and individuals estimate greenhouse gas emissions. The factors are revised each year. estimates and updated regularly.
For organisations operating in New Zealand, Australia, or both, now is a sensible time to review the basis of your carbon inventory. Not because everything needs to change, but because you need to know what has changed, whether it affects your results, and whether your emissions story still holds up. If your footprint moves, you want to be able to explain whether that reflects a real change in the business, or a change in the calculation.
Why emission factors change
Emission factors change because the underlying science gets more refined.
Electricity grids shift. Fuel mixes change. Waste assumptions are updated. Landfill gas recovery data improves. Vehicle fleets change. Freight and aviation datasets are refined. New science becomes available. Sometimes previous assumptions are corrected.
That is part of good emissions reporting. Better data should lead to better estimates.
The challenge is that updated factors can change the result even when business activity stays the same. Your reported footprint may go up or down because the factor changed, not because your team flew more, used more fuel, sent more waste to landfill, or consumed more electricity.
A lower number is not always a reduction.
A higher number is not always a step backwards.
Sometimes it’s a methodology change.
That distinction is important when you are comparing year on year, preparing climate disclosures, reporting to customers, making reduction claims or going through assurance.
What this means in New Zealand and Australia
In New Zealand, MfE’s Measuring Emissions Guide is one of the main sources organisations use for activity-based emissions calculations. The 2026 update includes changes across common inventory areas, including fuel, purchased electricity, travel, freight, materials and waste.
In Australia, many organisations use the National Greenhouse Accounts Factors. These support consistency between company-level inventories and Australia’s national greenhouse accounts. Electricity is often a major focus because grid emissions vary by state and change over time.
For businesses operating across both countries, there is an extra layer to manage. A New Zealand activity should generally use an appropriate New Zealand factor. An Australian activity should generally use an appropriate Australian factor. Supplier-specific or more granular data may be preferable where it is available and reliable.
The goal is not to chase the newest factor automatically. The goal is to use the most appropriate method and factor for the activity, location and reporting purpose and to document the choice clearly.
Who is likely to feel the impact?
Not every organisation will see a material change. Some will run the numbers and find the update barely moves the total.
Others may see a noticeable shift, especially where a changed factor applies to a large part of the footprint.
In New Zealand, waste is one category to check carefully. Some waste-to-landfill factors have moved significantly in the 2026 update, particularly where landfill gas recovery assumptions apply. Organisations with meaningful waste volumes - councils, healthcare providers, universities, hospitality groups, retailers, manufacturers, construction businesses and property portfolios should test the impact rather than assume it is small.
Travel is another area worth reviewing. Accommodation, air travel, ferry travel and some specialised transport factors have changed. This is relevant for consulting firms, project-based businesses, education providers, tourism operators, infrastructure teams and organisations with regular domestic or international travel.
Freight and logistics also deserve a closer look. Importers, exporters, retailers, food and beverage businesses, manufacturers, construction suppliers and logistics-heavy organisations should check whether updated road, rail, sea or air freight factors affect their Scope 3 results.
Electricity is relevant in both countries, but Australia has a particular wrinkle because grid factors vary by state. A business using electricity in Victoria will not have the same emissions profile as a business using the same amount of electricity in Tasmania, South Australia or Western Australia. For manufacturers, data centres, cold storage, healthcare, mining, retail networks, campuses and commercial property portfolios, state-by-state electricity data can make a real difference.
Agriculture, food and fibre businesses should also pay attention, particularly in New Zealand. Some agriculture-related factors have shifted, including areas connected to fertiliser, livestock and manure management. If these sources are material to your inventory or supply chain reporting, they should be included in the review.
And then there is Scope 3 spend-based reporting. Spend-based factors are often used when organisations do not yet have supplier-specific or activity-based data. They can be useful for screening and early-stage inventories but they’re blunt tools. They can be influenced by price changes, inflation, exchange rates and category mapping. If a large part of your Scope 3 inventory relies on spend-based estimates, factor updates may change the result without reflecting any real operational change.
Over time, organisations may choose to improve high-impact Scope 3 categories with better supplier or activity-level data where appropriate. This can make the inventory more specific to the organisation, while still using recognised calculation methods and emission factors.
A note on carbon software
Many organisations now rely on carbon accounting platforms. That can sometimes make reporting easier, especially when you are managing multiple sites, suppliers, business units or reporting periods.
But software does not remove the need to understand the method.
When government emission factors are updated, software providers may take time to update their libraries. That delay is not automatically a problem. Providers need to review the source files, map the factors correctly, test the calculations and avoid creating issues with prior-year data.
Assurance specialists, McHugh & Shaw, have also noted that factor sets can sometimes contain errors or be followed by further updates, so rushing to update immediately is not always the smartest move. The practical question is whether you know what your software is doing. You should be able to answer:
Which factor library is being used?
Which version or publication year is active?
Are the factors appropriate for the country and activity?
Are any factors manually overridden?
Are prior-year factors locked, or will they be overwritten?
Can you export the factor source, version and calculation logic?
Can the software show the impact of updated factors on your inventory?
Software can calculate but it can’t make the judgement call for you.
What to do next
The best next step is a materiality check – this is simply a clear review of whether the updated factors change anything meaningful.
Start with the largest sources in your inventory. For many organisations, that will be electricity, fuel, freight, travel, waste, refrigerants, purchased goods, capital goods or agricultural sources.
Then check which methods and factor sources were used. Were they activity-based? Supplier-specific? Hybrid? Spend-based? Were the factors from MfE, the Australian NGA Factors, a supplier, a lifecycle database, a software default or a custom calculation?
Once you know that, compare the factors used in your inventory with the latest relevant updates. Focus first on sources that are both large and likely to have changed.
A simple review should cover:
the biggest emissions sources in your footprint;
the factor source and version used for each material source;
whether the factor has changed;
whether the change materially affects your total inventory;
whether prior-year comparisons still make sense;
whether any reduction claims need more explanation;
whether your software is using the right factor library.
This is also a good time to separate operational change from methodology change.
If emissions have gone down, how much of that came from real reductions? How much came from updated factors? If emissions have gone up, did activity increase, or did the calculation change?
That split gives you a much cleaner story.
If you are preparing for assurance
If your inventory is being audited or assured, raise factor updates early.
McHugh & Shaw have advised that organisations mid-audit may be asked to calculate the impact of updated factors on inventory totals. That helps the assurer understand whether the change is material, how it affects the current inventory, and whether previous reporting periods need to be considered.
Your assurer will likely want to understand which factors were used, why they were selected, whether newer factors are available, and whether the change affects the final position.
If your carbon software cannot update the relevant factors before assurance work is completed, this may need to be reflected in the final assurance statement. None of this is a crisis. It is just much easier to deal with early than at the end of the process.
Be careful with reduction claims
If your reported emissions reduce after updated factors are applied, that may be good news. But it may not be the result of operational change. It may reflect a cleaner grid, revised waste assumptions, a changed travel factor, a different freight method, improved supplier data, or a change in the way spend-based emissions are estimated.
The reduction may still be valid in reporting terms. But the language needs to be accurate.
Instead of saying:
“We reduced emissions by 12%.”
A better way to frame it would be:
“Reported emissions reduced by 12%. Part of this movement reflects updated emission factors, while the like-for-like operational reduction was X%.”
That kind of explanation gives people more confidence in the number. It shows what changed in the inventory, what changed in the business, and how much progress was genuinely driven by action.
In a market where climate claims are being tested more closely, transparency is not a weakness. It is what makes the claim more useful, more defensible and easier to trust.
Our view
Emission factor updates are a normal part of credible carbon reporting.
They help inventories reflect better data, current methods and improved assumptions. But they should not be treated as a simple admin update.
For some organisations, the impact will be small. For others — especially those with material waste, travel, freight, electricity, fuel, agriculture, spend-based Scope 3, or operations across both New Zealand and Australia — the changes may affect reported totals, year-on-year trends, targets and assurance work.
The next step is to work out whether the changes materially affect your inventory, and to keep a clear record of that assessment.
Good carbon reporting is not about defaulting to the newest factor or accepting whatever the software produces. It is about using a method that fits the activity, location and reporting purpose, then keeping enough evidence that the numbers can be understood, compared and assured.
At The Lever Room, we help organisations build carbon inventories that are practical, transparent and decision-ready. If updated emission factors may affect your inventory, assurance process or reduction claims, we can help you work through what’s changed, what it means, and what to do next.