Skip to main content.

Mechanism for calculating unique emissions factors for liquid fossil fuels

This section looks at the process for establishing a UEF for the liquid fossil fuels sector. Key requirements for allowing a UEF are discussed and then a process is proposed. How this might be incorporated into regulations and a discussion on future work required is then covered.

Key requirements of any mechanism

  1. Demonstration that there is a valid reason why the DEF for the most similar fuel does not cover the applicant fuel (or if no similar fuel, why the ‘any other fuel’ DEF is not appropriate)

  2. Ensuring that there is a reasonable difference between the UEF and the most similar fuel DEF (to ensure it is not just measurement or normal quality variation being used to establish a UEF)

  3. Who is certified to calculate emissions factors?

  4. The basic calculation methodology including:

    1. Which gases are to be included in calculation

    2. That it should be based in carbon dioxide equivalent terms

    3. Units to be the same as the DEF it will replace

    4. Basis of calculation should be similar to those used for DEFs (may need to lay out the calculation and specify the particular test with certain fuels)

  5. Ensuring that any UEF calculation is appropriate for all the fuel it is applying to (i.e. a single test of one batch may not be suitable for ongoing application to a fuel)

Outline of proposed mechanism

In the following section the group tasked with managing UEF applications and monitoring them is referred to as the ‘admin agency’. An outline of the proposed process for obtaining a UFE is detailed below.

Process

  1. A company believes that a fuel they produce/import/supply meets the requirement for a UEF. That is:

    1. It can be demonstrated (through composition analysis, supply source, etc) that none of the DEFs in the regulations cover this fuel

    2. It is likely to be more than x% different than the otherwise applicable emissions factor [where x may be different for different fuels – as a strawman 2% for liquid fuels is proposed]

  2. Company gets a representative sample (or samples) tested and an emissions factor calculated, following the agreed methodology, by a laboratory/verifier that meets the requirements outlined in the regulations (note the sampling process will probably need to be done, or at least supervised, by the laboratory/verifier).

  3. The company applies to the admin agency with the following:

    1. Details of the fuel including a justification of why this should be differentiated it from fuels covered by the DEFs

    2. Demonstration that the sample taken is representative of the fuel stream and what ongoing testing is planned to ensure the UEF calculation continues to be representative of the fuel it is being applied to

    3. The UEF along with details of any testing results and calculations used to develop the UEF

  4. The admin agency then checks:

    1. That the fuel does differ by the agreed percentage for this type of fuel from the applicable (if any) DEF

    2. That the fuel does not reasonably fit into another category covered by a DEF

    3. That the tester/verifier has the appropriate certification

    4. That the calculation methodology used is in line with that used to calculate the DEFs for this fuel type

    5. That the company is putting in place an acceptable process to ensure the UEF calculated remains valid for this fuel

  5. If all the checks are met, the agency would then notify the company that the UEF has been accepted and can be used in their emissions calculation for this fuel from anytime after three months prior to the date of application. If the checks are not fully met, the agency would either advise the company what additional information is required or decline the application.

  6. The admin agency would then gazette and publish the UEF noting what fuel it applies to and who applied for it in line with Section 91 (3) of the Act.

  7. Once made public other companies can use the UEF for similar fuel, although they still need to go through a process of applying to the admin agency for permission to use it. In this case they need to demonstrate applicability by supplying the information in 3 (a) and (b) rather than redoing the testing/verification. They will only be able to use the factor from three months prior to the date of their application to the admin agency.

Work required to finalise mechanism/Feedback

As unique emissions factors are not likely to be a major issue with liquid fuels, the work process to complete this work should not be onerous. As biofuels are zero rated in the ETS there will be no complication from new biofuels.

Consultation: Consultation can take place through the Liquid Fuels TAG group. Initially consultation can take place using this document. There are a number of questions that companies may wish to debate such as confidentiality of UEFs so there may be a need for a further meeting to discuss these issues before draft regulations are developed. There would then be another consultation round as part of the regulation making process as set out in the ETS Act. Comments from this initial TAG group consultation have been included in italics.

The following are areas requiring consultation for liquid fossil fuels.

    • Process for applying for a UEF

      • Participants thought the proposed process appears reasonable

      • Some concern that it may take some time to obtain a UEF for a new fuel: a company could be penalised if it had to use the default emissions factor for other fuels. A solution could be to assign the new fuel the closest DEF in the interim rather than the factor for “other fuels”. A time limit for the processing of applications may also be appropriate.

      • Some participants questioned whether a fee for application is justified if the Government want to encourage accurate measurement of emissions (therefore encouraging UEF where applicable)? Perhaps an option is to give a refund could be given if UEF application successful.

    • Any issues with laboratory/verifier certification

      • Participants noted that laboratories would need to meet standard set by independent body (e.g. IANZ/NATA –ISO17025) for the required test methods (note certification is test specific)

      • Furthermore, the precision of such tests needs to be taken into account when determining small differences in carbon content per unit of volume, mass or energy as the case may be.  This in turn will influence the number of samples that require testing in order to produce a statistically significant data set.  Another complication is that the 'true' values for a given new fuel can differ from one sample to the next due to variations in chemical composition, so the statistical process used must be able to take account of both test method precision and sample variation.

      • There is a possible conflict of interest if the applicant also owns the laboratory doing the testing. However other regulations have this exposure (e.g. energy content for biofuels) and do not see it as an issue.

    • What percentage variation between a UEF and a DEF is appropriate for liquid fuels?

      • Participants noted the variation should be materially significant (both technically and financially) and supported a level around the 2% level. For example the difference between the emission factors specified in the draft regulations for regular and premium petrol is 2.4%.

      • It may be possible to get very good precision for existing fuels by performing many measurements on batches drawn from a representative variety of sources, and averaging the results.  This may not be as easy to do for a new fuel though, at least initially, since early sources may prove to be unrepresentative and samples insufficient in number.  Unfortunately, it could be some time before an optimal percentage can be established.

      • An analysis of current default factors was circulated (included in Appendix 1) which show the current factors cover most of the range. This chart highlights UEF are unlikely with liquid fuels unless it is a completely new fuel type. However it was also noted ranges might overlap for different types of fuel (e.g. a diesel type fuel with an emissions factor closer to jet fuel).

      • Fuel emulsions (blend of petroleum fuels with water) were also discussed. The simple option for handling emulsion fuels is to only count the petroleum component emissions as with biofuels (suitable if blended in New Zealand). However if the presence of water changes the likely emissions from the petroleum component because of the way it burns then UEFs would need to be developed for the fuels based on experimental data (this would be quite sophisticated testing so may rely on overseas testing done).

    • Would the same percentage factor cover all liquid fuels?

      • Participants thought that the same percentage variation would cover all liquid fuels

    • Is three months retrospective use of an UEF appropriate, not enough or too much?

      • Participants agreed that use should be related to the date of application for a UEF and any time allowed for use before this date should be limited (views varied between no additional time and six months before date of application).

      • Officials are also considering options including an option where as long as the application was in before the end of January it could be back dated until the beginning of the previous year (effectively a maximum of 13 months backdating)

    • What information should be gazetted for each UEF?

      • Some participants would prefer confidential UEF but this is not an option as regulations require them to be gazetted.

      • By gazetting an application it allows other parties to challenge a UEF if they feel there are any issues (which is good process)

      • Other applicants wanting to use a gazetted UEF should not be allowed any retrospective use of the UEF .

    • Do you agree that any participant wanting to use a UEF needs to make an application or that any participant should be free to use a published UEF?

      • Variety of views from participants – some supporting a fee before use and others that other companies should be free to use the UEF once gazetted.

Other areas of additional work:

    • Confirmation of the correct terminology to use to cover suitable laboratory testing facilities

      • Covered above (similar terminology to the Engine Fuels specification regulations or Biofuels regulations covering laboratory accreditation).

    • Spelling out the calculation methodology required

      • Covered in the next section

    • Deciding on how much of the calculation methodology for emission factors needs to be spelt out in the regulations versus what could be left to be determined by government policy alone.

      • The calculation methodology should be simple in most cases and should be able to be spelt out in broad terms in the regulations with the onus on the applicant to justify the detail.  The selection of the appropriate test method is a more fundamental issue since different methods can give different results.

    • When is a DEF no longer relevant (i.e. when is a DEF superseded by a UEF and when does a UEF become a DEF)?

      • This question was not specifically asked of participants. As a proposal if a DEF is not used in any emissions calculations in the previous year’s submissions it should be proposed that it be dropped (through consultation with an equivalent of the TAG team). Once at least three participants use a UEF there should be a process of consultation where it is proposed that this UEF becomes a DEF.

Emission Calculation Process (further work)

To calculate an emission factor for a new fuel, testing needs to calculate the carbon content and density. The emissions factor needs to include emissions from CO2, CH4 and N2O and be expressed in tCO2e/kl the same as default emission factors.

The appropriate test methods are:

Density: ASTM D1298/ISO3675

Carbon content: ASTM D5291-023

The CO2 emissions factor is calculated by:

Emissions Factor (tCO2/kl) = Carbon content (%mass)/100*density (kg/l)* 44/12

However the unique emissions factor (UEF) needs to include an allowance for CH4 and N2O emissions. It is recommended that the appropriate factors used for the most similar fuel are used for these factors and added to the above calculation as follows:

UEF (tCO2e/kl) = Emissions factor(tCO2/kl)*0.99 (oxidation factor)+ emissions factors for CH4 and N2O (tCO2/kl)

    • The company making the application should demonstrate that the density and carbon content used in the above calculation are representative for the new fuel. This would require at least two independent samples in the initial testing and a proposed ongoing testing regime (e.g. retesting each quarter in the first year and then some statistical method to show that quality of the new fuel is staying in the same band as that initial tested).

Implementation of unique emissions factor process

Given the number of applications for liquid fuel UEFs are expected to be limited, it would be best to incorporate the process for managing UEFs into the processes for managing the rest of the scheme, such as DEFs, opt in/out, etc. Once the legislation is in place the requirements for managing the UEF process include:

    • Having an identified position for submitting UEF applications

    • Formalising the process for processing applications (including requirements for how quickly they should be turned around, resources available, etc)

    • Having an identified resource who can manage the processing of these applications (using either internal or external resources as specified in the process)

    • Having a database system (or similar) so flags are raised when further information is expected from companies to support the continued use of an UEF

    • Combining the annual review of DEFs with a review of the continued applicability of UEFs. This review should also cover the situation where what was a UEF should now become a DEF (e.g. a new fuel has become mainstream).

3 Advice from Barry Blackett (BP technical manager) and Andrew Campbell based on analysis of the method is that accuracy of lighter products (diesel, jet and gasoline) will only be about 0.5% mass.

[ |