Carbon Accounting: the basics
Every business is unique - different in size, enterprise mix, systems, and how prepared you feel to tackle carbon reporting.
We know the carbon space is full of confusing jargon and competing advice. You're not alone in finding it complex. Here are the fundamentals to help you take your first step with confidence.
What is carbon accounting?
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The terms “carbon accounting”, “carbon reporting”, “emissions assessment”, “greenhouse gas reporting” are all ways of saying the same thing: adding up all the emissions produced by your business.
This includes emissions that are:
Directly emitted - by day-to-day activities like burning diesel in your tractor, or raising livestock; and
Indirectly emitted - by your suppliers and other business activities.
Why is the focus on emissions, not sequestration?
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When thinking about carbon on your farm, it is logical to think of the carbon stored in trees, crops or soil, and assume this balances out emissions from your operations. However, carbon accounting works similarly to financial accounting and has been standardised under reporting frameworks like the Australian Accounting Standards Board.
Just like you need to understand your total expenses before claiming deductions in financial accounting, you need to accurately measure your total emissions before considering any offsets. Carbon accounting focuses on total emissions, providing transparency and consistency between accounts, while carbon storage and offsets are reported (and celebrated) separately.
Is Carbon Accounting different to Carbon Farming?
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Yes.
Carbon Accounting is about using data to measure and report on your emissions. It is essentially the bookkeeping side of carbon – providing you with information to make more informed decisions about how you manage your business.
Carbon Farming however is like making capital improvements to your business. It is about actively changing farming practices to reduce emissions or increase carbon storage in your landscape. Carbon Farming projects can potentially result in Australian Carbon Credit Units (ACCUs) that have a monetary value and can be sold.
West Pine helps businesses take the first steps with reporting and analysis to inform decision making, and while we don’t advise on Carbon Farming, we work collaboratively with organisations that do, and we’d be happy to make an introduction.
Why should I start carbon accounting?
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Carbon accounting is rapidly becoming part of business-as-usual for large companies. Eve if you’re not yet legally required to start, you might be thinking about starting because:
Your customers are asking for it. Large Australian companies must now report supply chain emissions - and that includes what they buy from farmers. Suppliers who can provide accurate emissions data will have a competitive edge and remain valued partners as these requirements tighten.
It's opening doors. Farms with carbon data are already accessing benefits. Examples include preferential interest rates from banks, premium prices for lower-emission products, and eligibility for export markets with strict sustainability requirements, particularly in Europe and increasingly Asia.
It reveals hidden savings. When you understand your emissions profile, you often discover opportunities to cut costs—whether that's fuel efficiency, fertiliser optimisation, energy savings, or better waste management. These improvements typically pay for themselves while reducing your environmental footprint.
It prepares you for what's coming. Major processors, retailers, and industry bodies have set net-zero targets. Starting your carbon accounting journey now—while free support is available—means you'll be ahead of the curve when reporting becomes industry standard, not playing catch-up under pressure.
Why should I report my carbon emissions annually?
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Best practice is to account for your emissions annually, alongside your financial reporting.
In Australia, large companies are now legally required to complete annual climate-related disclosures, which include a carbon account. These reports must align with Australian Sustainability Reporting Standards (AASB S2). AASB S2 requires large companies to account for emissions from their entire supply chain - including all the suppliers they buy from.
This means your customers will soon expect you to measure and report your emissions using the same accounting standard they're required to use. Even if you're not yet legally required to report your carbon emissions, if you supply to a larger business, they will likely request this information from you. Providing accurate carbon data will become essential to remaining a valued supplier.
What is the Greenhouse Gas Protocol?
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The Greenhouse Gas Protocol (GHG Protocol) - the leading global standard used by companies and governments worldwide to measure and report greenhouse gas emissions.
The GHG Protocol classifies emissions into three categories - Scope 1, Scope 2, and Scope 3 - which together capture the full picture: direct emissions from your operations, energy you purchase, and emissions from your supply chain (both upstream suppliers and downstream customers).
At West Pine we conduct emission assessments using the GHG Protocol because it's robust, practical, and the most widely adopted standard globally. It is also the standard required by the Australian Sustainability Reporting Standards (AASB S2). This means your emissions data will be accepted and understood wherever in the world it's needed - by your customers, industry, and regulators.
What information do I need to complete an emissions assessment?
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In most instances the information needed for carbon accounting already exists in your day-to-day records. You're likely already tracking most of it for tax, operational management, or financial reporting purposes. A carbon account simply applies a different lens to data you're collecting.
Here's what we typically use:
Financial records – Your expense accounts show what goods and services you've purchased during the year. These purchases represent your supply chain emissions—everything from feed and fertiliser to contractors and machinery parts.
Fuel purchases – How many litres of diesel, petrol, or other fuels you used. If you're claiming Fuel Tax Credits, you're already tracking this. These are your direct (Scope 1) emissions.
Livestock data – Opening and closing stock numbers, natural increase, purchases, sales, and deaths by class. This is the same information you provide your accountant annually. In addition, weight data and average daily gain informs the carbon account, and many producers already track this for production decisions.
Crop inputs and outputs – The type, quantity, and application rates of fertilisers and sprays, plus your yield data. This operational information is valuable for understanding both your carbon footprint and input efficiency.
Running a carbon accounting process helps you identify exactly what data matters and where it lives in your existing systems. Often, it's just a matter of fine-tuning how you capture information - entering quantities when you process invoices, or weighing livestock each time they go through the yards. These small improvements in data capture don't just support carbon reporting - they give you better insights for agronomic decisions, cost management, and enterprise performance across the board.
How we can help
Whether you're exploring carbon accounting for the first time, need to respond to a customer request, or want to integrate emissions management into your broader sustainability strategy, West Pine brings practical expertise to build your capability and confidence.
