Steven Oliver October 2012 Australia’s Country-Specific Emission Factors 1

The development of Australia's emission factors First Inventory 1991 Continuous improvement Kyoto Protocol period NGERS Carbon price mechanism 2012 Established initial assigned amount under Kyoto Protocol ERT review process under Kyoto Protocol Established initial assigned amount under Kyoto Protocol ERT review process under Kyoto Protocol UNFCCC ERT review process Internal reviews and QA/QC UNFCCC ERT review process Internal reviews and QA/QC Inventory EFs and methods adopted for NGER (Measurement) Determination for company reporting purposes NGER (Measurement) Determination adopted for estimating carbon liability under carbon price mechanism

Current Australian fuel combustion emission factors Facility specific Coal used in public electricity generation83.7—96.3 NGERS Country specific Coal used in steel industry91.8 Industry Black coal used by other industry90.0 Industry confirmed by NGER data Brown coal used by industry94.6 NGERS Coke108.9 Carbon balance Coal by-products (coke oven gas)37.0 Industry Coal by-products (coal tar and BTX)81.8 Industry Brown coal briquettes95.0 NGERS Solid fuels Predominantly country specific Facility specific – electricity generation – largest emission source IPCC defaults used for minor fuels – minor emission sources

Current Australian fuel combustion emission factors Country specific LPG, Automotive gasoline, Aviation gasoline, Lighting kerosene, Power Kerosene, Aviation turbine fuel, Heating oil, ADO, IDF 60.2 – 69.9GHD 2006a Tyres81.6GHD 2006b IPCC Default Petroleum products nec68.6IPCC 1996 Lubricants and greases69.6IPCC 2006 Bitumen80.7IPCC 2006 Fuel oil73.6IPCC 1996, supported by industry Naphtha69.7IPCC 1996 Solvents69.7IPCC 1996 Liquid fuels

Current Australian fuel combustion emission factors Gaseous fuels Country specific Natural gas51.4Australian Gas Association Ethane56.5ASHRAE 2001 Town gas60.2Independent consultant review of specific emission factors Wood and wood waste94Todd 1993 Wood (for residential combustion)77.5Todd 2005 IPCC Default Ethanol67.3IPCC 2006 Bagasse95.0IPCC 2006

Drivers for emission factor improvement Continuous improvement of emission factors UNFCCC ERT review process Latest research and development in methodologies Industry consultation Internal QA/QC Availability of new data Quantitative methods Independent and peer reviews NGERS

Assessment and verification of country-specific emission factors The IPCC Good Practice Guidance and Uncertainty Management in National Greenhouse Gas Sets out key qualities for emission factors Transparency Comparability Accuracy  Representative  Free of bias

Assessment and verification of country-specific emission factors - Transparency We consider this to be one of the most important attributes The foundation for the EF should be clearly and transparently documented Provides a basis for instilling confidence –Domestically NGERS reporting Carbon price mechanism –Internationally ERT review process Carbon market linkages

Assessment and verification of country-specific emission factors - Comparability Comparisons with EFs used by other Annex 1 reporting countries Part of Australia’s annual QC test procedures Use histogram plots and the t-test Australian EFs should not be significantly different (at a 95% confidence level) to those of other Annex 1 UNFCCC reporting parties.

Assessment and verification of country-specific emission factors - Comparability Example of comparison between the Australian Road Transport CO2 EF for diesel compared to other Annex 1 reporting countries. The t-test output showed the Australian factor was not significantly different from the factors used by other countries. Australian EF

Assessment and verification of country-specific emission factors - Comparability Example of comparison between the Australian Road Transport CH4 EF for diesel compared to other Annex 1 reporting countries. The t-test output showed the Australian factor was significantly different from the factors used by other countries. Australian EF The EF was subsequently updated following a review

Assessment and verification of country-specific emission factors - Representativeness More difficult to comprehend in a constrained data environment Understanding EF qualities through sampling – Consistency of method – References to national and international standards – Sampling adequacy More difficult to comprehend in a constrained data environment Understanding EF qualities through sampling – Consistency of method – References to national and international standards – Sampling adequacy Natural gas CO2 EFs from NGER Electricity generators 2010 Australian country specific CO2 EF for natural gas = 51.4 Gg CO2/PJ. Not significantly different from NGER data Australian country specific CO2 EF for natural gas = 51.4 Gg CO2/PJ. Not significantly different from NGER data

Assessment and verification of country-specific emission factors - Representativeness Basin specific EFs for underground mines derived from NGER data compared to previous country specific default EFs Previous country specific defaults for Class A (gassy) and Class B (non gassy) mines are shown not to be representative at coal field or individual mine level. No longer used for NGER reporting or inventory compilation

Reviewing the appropriateness of country-specific emission factors - Drivers Access to improved data –eg Facility-specific NGERS data reported by electricity generators used to produce a CS brown coal EF Improved understanding of processes or methods –Fugitive wellhead emissions from coal seam gas extraction –Residential woodheater EFs UNFCCC ERT review recommendations –Eg, verification of liquid fuels CO2 EFs

Updating country-specific emission factors: Two parallel processes Internationally – EF must be consistent with IPCC GLs and acceptable to the UNFCCC ERT review process Domestically – Inventory factors should be consistent with those used for NGERS Impacts company emission reporting & carbon liabilities Domestically – Inventory factors should be consistent with those used for NGERS Impacts company emission reporting & carbon liabilities Consultation with Industry and experts Public consultation phase Discussion paper published by Department Call for public submissions Public consultation phase Discussion paper published by Department Call for public submissions National inventory NGERS methods Proposed amendments to the NGER Measurement Determination presented to Minister National Inventory Users Reference Group National Greenhouse Gas Committee of State and Territory government representatives Departmental Executive Committee National Inventory submission to the UNFCCC in April Amendments to Determination implemented in June

Implementing country-specific emission factors in the national inventory Key question to consider –  is the updated EF applicable to entire time series? – Yes - eg new EF based on superior data or understanding EF simply applied to whole times series – No - the EFs qualities are expected to change over time Eg, New EF relevant to current time but does not necessarily represent the past better than existing EF. Will need to consider how to apply the new EF to time series Key question to consider –  is the updated EF applicable to entire time series? – Yes - eg new EF based on superior data or understanding EF simply applied to whole times series – No - the EFs qualities are expected to change over time Eg, New EF relevant to current time but does not necessarily represent the past better than existing EF. Will need to consider how to apply the new EF to time series Time series consistency requirements in IPCCC Guidelines

Implementing updated emission factors – underground coal mine fugitive EFs Time series application of NGER data derived underground mine EFs for methane Time series application of NGER data derived underground mine EFs for carbon dioxide NGER based EFs backcasted only until EF established in 2005 from industry survey. Linear interpolation used to fill intervening years NGER based EFs for CO2 established for the first time - backcasted through the entire time series.

Key outcomes relating to country specific emission factors for Australia International acceptance of our National inventory methods Domestic acceptance of our National Greenhouse and Energy Reporting Scheme methods