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Chapter 3: Energy

3.1 Sector overview

The energy sector produced 32,320.92 Gg CO2 equivalent in 2003 and represented 42.9% of New Zealand's total greenhouse gas emissions. Emissions from the energy sector are now 37.0% above the 1990 baseline value of 23,594.11 Gg CO2 equivalent (Figure 3.1.1). The sources contributing most to this increase since 1990 are emissions from road transportation (an increase of 58.4%) and public electricity and heat production (an increase of 83.3%). Emissions from the 'manufacture of solid fuels and other energy industries' sub-category have decreased by 80.6% from 1990, mainly due to the discontinuation of synthetic petrol production in 1997.

Figure 3.1.1 Energy sector emissions 1990-2003

Year Gg CO2 equivalent
1990 23,594.11
1991 23,873.37
1992 25,632.75
1993 24,897.86
1994 25,134.51
1995 25,072.53
1996 26,118.62
1997 28,511.48
1998 27,045.43
1999 28,379.88
2000 28,905.79
2001 30,828.75
2002 30,864.67
2003 32,320.92

3.2 Fuel combustion (CRF 1.A)

3.2.0.1 Description

The fuel combustion category includes all emissions from fuel combustion activities, specifically: energy and transformation industries, manufacturing industries, transport and other sub-categories - namely commercial, residential and agriculture/forestry/fisheries (Figure 3.2.1). These subcategories use common activity data sources and emission factors. Details on the activity data and emission factors are included in Annex 2. Annex 8.1 shows the calculation worksheets used for the 2003 inventory. Information about methodologies, emission factors, uncertainty and quality assurance relevant to several sub-categories are discussed below rather than repeated in individual sub-categories.

Figure 3.2.1 Emissions from the energy sector: fuel combustion category in 2003 (all figures Gg CO2 equivalent)

Category Gg CO2 equivalent Percent of total
Energy Industries 7604.84 24.6
Manufacturing Industries and Construction 5904.41 19.1
Transport 13985.98 45.2
Other Sectors 3427.43 11.1

3.2.0.2 Methodological issues

Energy sector emissions for New Zealand's inventory are compiled from the MED's energy database along with the relevant emission factors (Annex 2). Generally, greenhouse gas emissions are calculated by multiplying the emissions factor of specific fuels by the activity data. There are only a few occasions where emission factors are unavailable due to confidentiality reasons and instances where natural gas was used as a feedstock.

The fuel combustion category is separated into two sources of emissions - stationary combustion and mobile combustion. CO2 emissions from the stationary combustion of gas, solid and liquid fuels are identified as key source categories for New Zealand in the 2003 inventory. The relevant good practice decision tree (Figure 2.1 in IPCC, 2000) identifies that to meet good practice in methodology, emissions should be estimated using data from sectors correcting for oxidation and stored carbon (a Tier 1 Sectoral Approach). The decision is based on New Zealand having data on fuel combusted by sector but not by plant. The New Zealand methodologies are consistent with the Tier 1 Sectoral Approach. Good practice for methodological choice in the mobile combustion (transport) category is discussed in section 3.2.3 - fuel combustion: transport.

Emission factors

New Zealand emission factors are based on the GCV (Gross Calorific Value). This is because energy use in New Zealand is conventionally reported in gross terms with some minor exceptions (refer Annex 2). New Zealand commissioned a review of all emission factors used in the energy sector in 2003 (Hale and Twomey, 2003). In accordance with good practice, where there was a significant difference between country-specific and IPCC default emission factors, and a justifiable explanation could not be obtained, New Zealand reverted to the IPCC default emission factors (refer to Annex 2). The new emission factors recommended by the review and agreed by a review panel were first used in the 2002 inventory, are used in the 2003 inventory and will be used in future inventories.

3.2.0.3 Uncertainties and time-series consistency

Uncertainty in greenhouse gas emissions from fuel combustion varies depending on the gas (Table 3.2.1). The uncertainty of CO2 emissions is relatively low at ±5% and will be primarily due to uncertainty in activity data rather than emission factors (IPCC, 2000). This is due to the direct relationship between fuels' carbon content and the corresponding CO2 emissions during combustion. The low level of uncertainty in CO2 emissions is important as CO2 emissions comprise 96.6% of emissions in the energy sector. Details of how uncertainty in CO2 emissions is assessed are provided under each fuel type in Annex 2.

In comparison, emissions of the non-CO2 gases are much less certain as they vary with the combustion conditions. In addition, many of the non-CO2 emission factors used by New Zealand are the IPCC default values and the IPCC Guidelines (1996) often do not quantify the uncertainty in the default emission factors. The uncertainties proposed in Table 3.2.1 are thought to be reasonably accurate but lack a rigorous foundation (MED, 2004).

Table 3.2.1 General uncertainty ranges for emission estimates from fuel combustion (MED, 2004)

Gas Uncertainty

CO2

± 5%

CH4

± 50%

N2O

± 50%

NOx

± 33%

CO

± 50%

NMVOC

± 50%

3.2.1 Fuel combustion - energy industries (CRF 1A1)

3.2.1.1 Description

This category comprises emissions from fuels burnt in stationary combustion including combustion for public electricity and heat production, petroleum refining, and the manufacture of solid fuels and other energy industries.

Emissions in the energy industries category totalled 7,604.84 Gg CO2 equivalent in 2003 and have increased 26.0% since 1990. The emissions profile in 2003 is dominated by emissions from public electricity and heat production which contributed 84.1 % of the CO2 equivalent emissions from the energy industries category.

New Zealand's electricity generation is dominated by hydro-electric generation (approximately 60% of annual electricity needs) with most of the balance coming from thermal generation using largely natural gas with some coal. Geothermal power contributes another 7% and there are also contributions from other renewable sources such as wind and co-generation using wood. The emissions from public electricity generation show large year-to-year fluctuations because of the use of thermal stations to supplement the hydro-electric generation which cannot meet the demand for electricity during 'dry' hydro years i.e. years where rainfall and snow-melt inputs do not meet outflows. Generation in a 'normal' hydro year requires lower gas and coal use and a 'dry' hydro year requires higher gas and coal use. This is a different trend from the steady increase in emissions from coal and gas used in electricity generation found in many other countries.

Figure 3.2.2, which shows net electricity production by fuel type from 1974 to 2003, clearly illustrates that when the level of hydro-electric generation decreases, the level of thermal generation (gas, coal and oil) increases. However, it should be noted that since 1998 there has been thermal capacity of approximately 700 MW from new gas combined cycle plants, which is mainly responsible for the rise above 10,000 GWh.

Figure 3.2.2 Hydro-electric and thermal generation 1974-2003

2003 was a dryer year than usual, resulting in greater reliance on coal for electricity generation. Emissions from New Zealand's only plant able to run on coal (and gas) approximately doubled between 2002 and 2003. Despite the dry year, emissions from gas used for electricity generation declined, reflecting a lack of available gas.

3.2.1.2 Methodological issues

Public electricity and heat generation

The CO2 emissions from coal use in electricity generation are derived from coal use figures provided by the sole electricity generator that uses coal. The data for liquid fuel use are from the 'Delivery of Petroleum fuels by Industry' survey compiled by Statistics New Zealand (refer to Annex 2).

A large percentage of New Zealand's electricity is supplied by co-generation (otherwise known as combined heat and power). Most of the major co-generation plants are attached to large industrial facilities that consume most of the electricity and heat generated. In accordance with 1996 IPCC guidelines, where electricity and heat production is the primary activity of the enterprise operating the co-generation plant, emissions should be included in the manufacturing industries category. However, where electricity generation is the primary activity the emissions should be included in the electricity and heat production category.

For New Zealand's inventory, the enterprise in question is taken to encompass both the industrial facility proper and the attached co-generation plant. According to this classification, there is only one plant determined to produce electricity as its primary purpose. The emissions from this plant are included in the 'electricity and heat production' category while emissions from other co-generation plants are included in the 'manufacturing industries and construction (other)' sub-category.

Petroleum refining

Energy use data for petroleum refining are supplied to the MED by the New Zealand Refining Company Limited. In general, emission factors are used to derive CO2 emissions using the energy in the fuels consumed. For the refinery, a weighted-average CO2 emissions factor is estimated based on the fuel used. The main liquid fuel used is fuel oil and the main gas is refinery gas. As there are no data available concerning non-CO2 emissions from the refinery, IPCC default (IPCC, 1996) emission factors for industrial boilers are used.

Manufacturing of solid fuels and other energy industries

The low implied emission factors (IEF's) for manufacturing of solid fuels and other energy industries for gaseous fuels between 1990 and 1996 are caused by carbon sequestration in the process of producing synthetic petrol. In 1997, production of synthetic petrol in New Zealand ceased.

New Zealand has a gas field with particularly high CO2 content (the Kapuni field- refer Annex 2). Most of the gas from this field is subsequently treated and the excess CO2 is removed. The emissions factor for this gas is therefore lower for end users than when it is used by the gas field itself and the IEF for the 'manufacturing of solid fuels and other energy industries' category is significantly higher than the typical gaseous fuel IEFs for other categories. The sequestration of carbon in synthetic petrol more than made up for this differential prior to 1997.

Emission factors

CO2 and non-CO2 emission factors for fossil fuels are discussed in detail in Annex 2. Wood is also used for energy production. For wood consumption, the CO2 emissions factor is 104.2 kt CO2 /PJ. This is calculated from the IPCC default emission factors, assuming the NCV is 5% less than the GCV.

3.2.1.3 Uncertainties and time-series consistency

Uncertainties in emissions estimates are those relevant to the entire fuel combustion sector (refer to Table 3.2.1 and Annex 2).

3.2.1.4 Source-specific QA/QC and verification

The review of energy sector emission factors (Hale and Twomey, 2003) encompassed the emission factors used in the manufacturing industries and construction category. In preparation of the 2003 inventory, the data for electricity production and petroleum refining underwent a Tier 1 QC checklist.

3.2.1.5 Source-specific recalculations

Some double-counting of emissions in previous inventories was discovered (refer Chapter 9). As a result, gas and coal emissions in the 'electricity and heat production' category for the years 1999-2002 have been revised downward. There have been some other minor recalculations which are documented in the common reporting format tables. Details of the effect of the recalculation on the energy sector are included in Chapter 9.

3.2.2 Fuel combustion: manufacturing industries and construction (CRF 1A2)

3.2.2.1 Description

This category comprises emissions from fuels burnt in manufacturing industries and construction including iron and steel, other non-ferrous metals, chemicals, pulp, paper and print, food processing, beverages and tobacco, and other uses.

Emissions in the 'manufacturing industries and construction' category totalled 5904.41 Gg CO2 equivalent in 2003, 28.8% over the 1990 baseline. The largest single source in 2003 is the 'chemicals' sub-category, made up entirely of emissions from natural gas consumption in the manufacture of methanol. Emissions from this source have roughly halved since 2002, largely due to a decline in the availability of low-priced natural gas. However, emissions from methanol production still comprised 16.8% of emissions from the 'manufacturing industries and construction' category and has increased from 376.97 Gg CO2 equivalent in 1990 to 992.51Gg CO2 equivalent in 2003 (an increase of 163.3%).

Emissions from natural gas consumption in the manufacture of urea have been re-allocated from the 'chemicals' sub-category in the energy sector to the 'chemical industry' sub-category in the industrial processes sector. This was in response to the UNFCCC review of New Zealand's inventory (UNFCCC, 2005).

3.2.2.2 Methodological issues

The energy data for methanol production are supplied directly to the MED. CO2 emissions are calculated by comparing the amount of carbon in the gas purchased by the plants and the amount stored in methanol (refer Box 3.1). The data for gas use in iron and steel-making are also supplied direct to the MED. The data for other industry uses of gas are from the energy supply and demand balance tables in the Energy Data File (MED, 2004).

Box 3.1 Calculation of CO2 emissions from methanol production (MED, 2004)

Assumptions

  • Synthetic petrol is 85.8% carbon by weight.
  • Methanol is 37.5% carbon by weight.
  • CO2 emissions factor for Maui Gas is 52.3 kt / PJ (2002) (refer Annex 2).
  • CO2 emissions factor for Kapuni gas is 84.1 kt /PJ.
  • CO2 emissions factor for mixed feed gas is 52.4kt/PJ.

The resulting calculations are:

  • Weight of carbon in gas to Methanex = [(PJ Maui)*52.3 + (PJ Kapuni)*84.1 + (PJ mixed feed)*52.4].
  • Weight of carbon in petrol = [amount of petrol produced * 0.858] kilotonnes.
  • Weight of carbon in methanol = [amount of methanol produced * 0.375] kilotonnes.
  • Weight of carbon sequestered in the products = [Weight of carbon in petrol + Weight of carbon in methanol].
  • Total emissions of CO2 = [(weight of carbon in gas to Methanex)-(weight of carbon sequestered)] * 44/12.

Liquid fuel data are extracted from the Deliveries of Petroleum Fuels by Industry survey conducted by Statistics New Zealand. Coal consumption data are determined from the New Zealand Coal Sales Survey conducted by Statistics New Zealand. These sources of activity data are further described in Annex 2. A considerable amount of coal is used in the production of steel, however virtually all of the coal is used in a direct reduction process to remove oxygen from ironsand and not as a fuel. Emissions are therefore included in the industrial processes sector.

In the CRF tables, disaggregated activity data according to fuel types and corresponding CO2 emissions have been provided for only the 'iron and steel' and 'chemicals' sub-categories. The reason for this is that detailed energy use statistics by industries (according to complete ANZSIC codes, similar to the ISIC codes) are collected and reported in New Zealand for electricity consumption only. For the other energy/fuel types such as gas, liquid fuel and coal, data are collected and reported at a much higher level. This is a reflection of the historical needs and practices of energy statistics collection in New Zealand. Gas use statistics by industries according to ANZSIC codes have been collected since 2001 and will be incorporated when they have been adequately verified. The sub-category 'chemicals' has an entry because it relates to gas used by Methanex.

3.2.2.3 Uncertainties and time-series consistency

Uncertainties in emission estimates are those relevant to the entire energy sector (refer Table 3.2.1 and Annex 2).

3.2.2.4 Source-specific QA/QC and verification

In preparation of the 2003 inventory, the data for CO2 emissions from stationary combustion - manufacturing industries and construction underwent a Tier 1 QC checklist.

3.2.2.5 Source-specific recalculations

There have been substantial recalculations for this category affecting all years from 1990:

  • Emissions from gas used in the iron and steel industry are provided separately for the first time - previously they were included under the 'other non-specified' sub-category.
  • Emissions from urea production have been reallocated from the 'chemicals' sub-category in the energy sector to the 'chemical industry' sub-category in the industrial processes sector.
  • Separate emission factors are now used in coal consumption for the three key ranks of coal (bituminous, sub-bituminous and lignite).
  • Estimates of emissions from coal use have been affected by the decision to base the activity data solely on the Coal Sales Survey conducted by Statistics New Zealand.
  • Emissions estimates for the 2002 year have been substantially revised due to corrections regarding sales misreporting by the oil-companies.
  • From 1999, LPG consumption estimates have been revised upwards.

3.2.3 Fuel combustion: transport (CRF 1A3)

3.2.3.1 Description

This category comprises emissions from fuels burnt in transportation including civil aviation, road transport, rail transport and national navigation. Emissions from international marine and aviation bunkers are reported but not included in the total emissions.

Emissions from the transport category totalled 13,985.98 Gg CO2 equivalent in 2003 and have increased 57.9% from the 8,856.58 Gg CO2 equivalent emitted in 1990. The emissions profile in 2003 is dominated by emissions from road transportation which accounted for 87.8% of total transport emissions. CO2 emissions from mobile combustion (road vehicles) were identified as having a major influence on the trend in New Zealand's emissions in the key category trend analysis (Table 1.5.3).

In the 2003 NIR, New Zealand has included a description and results from a Tier 2 bottom-up approach for estimating emissions from road transportation. This information, and the emissions reported in the common reporting format, are included to support the Tier 1 estimate.

3.2.3.2 Methodological issues

Emissions from transportation are compiled from the MED's energy database. It is good practice to use a Tier 1 approach for calculating CO2 emissions as this provides the most reliable estimate. However, it is also good practice to use a Tier 2, bottom-up, approach to confirm the Tier 1 estimate (IPCC, 2000). The current New Zealand methodology is a Tier 1 approach estimating emissions using country specific and IPCC default emission factors.

Activity data on the consumption of fuel by the transport sector are extracted from the Deliveries of Petroleum Fuels by Industry survey conducted by Statistics New Zealand. LPG and CNG consumption figures are reported in the Energy Data file (MED, 2004). Prior to the 2002 inventory, the CO2 emission factors used in inventories were sourced from the New Zealand Energy Information Handbook (Baines, 1993). These are replaced with the emission factors for individual liquid fuels derived from NZRC data on carbon content and calorific values (Annex 2) as a result of the 2003 review of energy sector emission factors. When the fuel specifications of key liquid fuels are modified over time these will be noted and the emission factors altered according to the updated carbon content and the calorific values of the modified fuels (refer UNFCCC, 2005).

Road transport

New Zealand has developed a Tier 2 bottom-up approach for estimating emissions from road transportation using the Ministry of Transport (MoT) Vehicle Fleet Model. It is good practice to use the Tier 2 approach in parallel for two reasons. It provides an important quality check and reliable bottom up calculated CO2 emissions. This increases confidence in the underlying activity data and is important in underpinning the bottom up calculation of non CO2 emissions (IPCC, 2000).

The Vehicle Fleet Model's inputs include vehicle type, fuel type, number of vehicles, vehicle kilometres travelled (VKT) and fuel economy for different vehicle types. Model outputs include fuel consumed per kilometre in different driving conditions and the total fuel consumed per annum for the vehicle classes in the fleet. Emissions are calculated from the entire national fleet per year using country-specific and IPCC default emission factors for the different fuels (see Annex A2.4 for further details).

Figures 3.2.2 and 3.2.3 show the comparison between the MoT Vehicle Fleet Model and the data available from the MED (which have been used in the Tier 1 calculations) for CO2 emissions from petrol and diesel used in road transportation. It is obvious there is a divergence occurring between the model and MED statistics from 2001 onwards. The MED values suggest a sudden and significant increase in petrol demand (and hence emissions from this source) over the past three years. Without detailed study it is difficult to accurately explain what is causing this, but factors that could be involved include increased shift in VKT congestion level driving in urban/suburban road networks, shift towards larger vehicle sizes within a given class and increased non-road use. For diesel, the discrepancies are more easily explained. There is the difficulty in accurately apportioning road versus non-road use in the MED values. The main variables within the model to consider are the fuel consumption factors, especially variation in terms of vehicle load and terrain travelled. Another significant variable is the VKT breakdown within the heavy truck fleet. It is acknowledged the model calculations of emissions resulting from diesel needs more refining.

Figure 3.2.2 Comparison of CO2 emissions from road transportation using petrol between the MED data (Tier 1) and the MoT model (Tier 2)

Figure 3.2.3 Comparison of CO2 emissions from road transportation using diesel between the MED data (Tier 1) and the MoT model (Tier 2)

Navigation

Good practice in methodology choice for navigation in New Zealand is to use a Tier 1 approach with country-specific carbon contents for estimating CO2 emissions and IPCC default emission factors for CH4 and N2O (IPCC 2000). The current New Zealand methodology meets good practice. Prior to the 2002 inventory, New Zealand-specific emission factors were used for CH4 and N2O emissions from fuel oil in domestic transport. The 2003 review of emission factors recommended reverting to the IPCC default factors (Hale and Twomey, 2003).

Aviation

The New Zealand methodology for estimating emissions from domestic aviation is a Tier 1 approach that does not use landing and take off (LTO) cycles. There is no gain in inventory quality by moving from a Tier 1 to a Tier 2 approach using LTOs (IPCC, 2000). The distinction between domestic and international flights is based on refuelling at the domestic and international terminals of New Zealand airports respectively. Therefore there is no basis to split the domestic and international components of fuel use for international flights with a domestic leg. This is the case because aviation and marine fuel use information is sourced from the oil companies rather than from the airlines or the shipping companies.

3.2.3.3 Uncertainties and time-series consistency

Uncertainties in emission estimates are those relevant to the entire fuel combustion sector (refer Table 3.2.1 and Annex 2).

3.2.3.4 Source-specific QA/QC and verification

CO2 emissions from road transport and aviation are identified as key source categories for New Zealand in the 2003 inventory. In preparation of the 2003 inventory, the data for these emissions underwent a Tier 1 QC checklist.

3.2.3.5 Source-specific recalculations

Emissions estimates for the 2002 year have been substantially revised due to corrections made regarding misreporting of sales data by the oil-companies. Emissions from LPG and CNG consumption in some years have also been affected by activity data revisions. Finally, CH4 and NOx emission factors for road and rail transport, and also mobile agriculture, are interpolated between the New Zealand specific emission factors and the IPCC default factors as recommended by Hale and Twomey (2003). In previous years, New Zealand-specific emission factors were used for all years.

3.2.4 Fuel combustion: other sectors (CRF 1A4)

3.2.4.1 Description

This sector comprises emissions from fuels burnt in the commercial/institutional sub-category, the residential sub-category and the agriculture, forestry and fisheries sub-category.

Emissions from the 'Fuel combustion: other sectors' category totalled 3,427.43 Gg CO2 equivalent in 2003 and are 17.9% over the 1990 baseline value of 2,908.04 Gg CO2 equivalent. The emissions profile in 2003 is divided between the commercial and institutional sub-category (40.8%), and the agriculture, forestry and fisheries sub-category (42.5%). The residential sub-category comprises the remaining 16.7% of emissions.

3.2.4.2 Methodological issues

The energy activity data are obtained from the same sources as other energy categories (Annex 2). However, in partitioning energy use between categories, emissions from the agriculture, forestry and fisheries sub-category are likely to be underestimated (MED, 2004). This is because there are no separate estimates of fuel use by this group, apart from liquid fuels and coal used in agriculture. However, these emissions have been included in other sectors such as industry and transport and are therefore included in New Zealand's total emissions.

3.2.4.3 Uncertainties and time-series consistency

Uncertainties in emission estimates are those relevant to the entire energy sector (refer Table 3.2.1 and Annex 2).

3.2.4.4 Source-specific QA/QC and verification

In preparation of the 2003 inventory, the data for the 'other sectors' category underwent a Tier 1 QC checklist.

3.2.4.5 Source-specific recalculations

Separate emission factors have been calculated and are used for the three key ranks of coal (bituminous, sub-bituminous and lignite). Estimates of emissions from coal have been affected by the decision to base the activity data solely on the Coal Sales Survey conducted by Statistics New Zealand. There have also been some recalculations to emissions from liquid fuels due to revisions to the activity data provided by the oil companies for 2002 and revisions to LPG consumption data from 1999 onwards.

3.3 Fugitive emissions from fuels (CRF 1B)

3.3.1 Fugitive emissions from fuels: solid fuels (CRF 1B1)

3.3.1.1 Description

Fugitive emissions arise from the production, processing, transmission, storage and use of fuels, and from non-productive combustion. Fugitive emissions from solid fuels produced 332.25.Gg CO2 equivalent in 2003. This is an increase of 22.1% from the 272.17 Gg CO2 equivalent reported in 1990. New Zealand's fugitive emissions from solid fuels are a product of coal mining operations.

CH4 is created during coal formation. The amount of CH4 released during coal mining is dependent on the coal rank and the depth of the coal seam. Surface mines are assumed to emit relatively little CH4 compared to underground mines. In 2003, 76.9% of the CH4 from coal mining (including post-mining emissions) came from underground mining, however, most of the coal mined in New Zealand is taken from surface mines (84.3% in 2003). There is no flaring of CH4 at coal mines and CH4 is rarely captured for industrial uses. CH4 is also emitted during post mining activities such as coal processing, transportation and utilisation.

3.3.1.2 Methodological issues

Good practice in methodology choice for estimating fugitive emissions from coal mining is to focus on the sub-source category that dominates the emissions. New Zealand therefore focuses on estimating emissions from underground mining. The current New Zealand methodology is a Tier 1 approach using the top end of the IPCC default range in emission factors (Table 3.3.1). The emission factors used for surface mining, handling of surface-mined coal and handling of underground-mined coal are the middle values from the IPCC default range (Table 3.3.1). The emissions factor for underground mining of bituminous coal is the top end of the IPCC default range. New Zealand continues to use a New Zealand-specific emissions factor for underground mining of sub-bituminous coal (Beamish and Vance, 1992). In 2003, coal production from underground mining by weight was 222 kt bituminous coal and 591 kt sub-bituminous coal. The calculation worksheets used for fugitive emissions are shown in Annex 8.1.

Table 3.3.1 Methane release factors for New Zealand coal

Activity Release factors (tCH4/kt coal) Source of release factors

Surface mining

0.77

Mid-point IPCC default range (0.2-1.34 t/kt coal)

Underground: bituminous mining

16.75

Top end of IPCC default range (6.7-16.75 t/kt coal)

Underground: sub-bituminous mining

12.1

Beamish and Vance, 1992

Surface post mining

0.067

Mid-point IPCC default range (0.0-0.134 t/kt coal)

Underground post mining

1.6

Mid-point IPCC default range (0.6-2.7 t/kt coal)

Note: there is no release factor for lignite from underground mining as all lignite is taken from surface mining.

3.3.1.3 Uncertainties and time-series consistency

Uncertainties in emissions are those relevant to the entire energy sector (refer Table 3.2.1 and Annex 2).

3.3.1.4 Source-specific QA/QC and verification

In preparation of the 2003 inventory, the data for fugitive CH4 emissions from solid fuels underwent a Tier 1 QC checklist.

3.3.1.5 Source-specific recalculations

Fugitive emissions from coal mining have been recalculated in most years due to revisions to data on tonnes of coal mined from surface and underground mines. Further information on these recalculations can be found in Chapter 9.

3.3.1.6 Source-specific planned improvements, if applicable

The 2003 review of emission factors (Hale and Twomey, 2003) noted that the New Zealand factor (35.2 t CH4/kt coal) was more than twice the top end of the IPCC Tier 1 range and was based on a small sample of mines. In response, New Zealand has adopted the top end of the IPCC range of emission factors for the 2003 inventory (16.75 t CH4/kt coal).

3.3.2 Fugitive emissions from fuels: oil and natural gas (CRF 1B2)

3.3.2.1 Description

Fugitive emissions from oil and gas comprised 1066.01Gg CO2 equivalent in 2003. This is an increase of 13.8% from 936.40 Gg CO2 equivalent in 1990.

The main source of emissions from the production and processing of natural gas is the Kapuni gas treatment plant. The plant removes CO2 from a portion of the Kapuni gas (a high CO2 gas when untreated) before it enters the distribution network. Although emissions from source are not technically due to flaring, they are included in this category due to confidentiality concerns. CO2 is also produced when natural gas is flared at the wellheads of other fields. The combustion efficiency of flaring is 95-99% (MED, 2004), leaving some fugitive emissions due to the incomplete combustion. Fugitive emissions also occur in transmission and distribution of the natural gas.

This sector also includes emissions from geothermal operations. Some of the energy from geothermal fields is transformed into electricity and the emissions are reported in this category. This is because they are not the result of fuel combustion, unlike the emissions reported under the 'energy industries' category. Sites with naturally occurring emissions where there is no use of geothermal steam for energy production are excluded from the inventory.

3.3.2.2 Methodological issues

The methodologies for natural gas are based on data from field operators or calculated from supplied energy data and country specific emission factors. This conforms to good practice in methodology choice (IPCC, 2000). The major categories are discussed further in this section. The calculation worksheets used for fugitive emissions are shown in Annex 8.1.

Venting and flaring from oil and gas production

Estimates of the CO2 released through flaring is either supplied directly by field operators or calculated from the supplied energy data using the emission factors from Baines (1993). The Natural Gas Corporation (NGC) supplies estimates of CO2 released during processing. These values are aggregated to derive annual emissions.

Gas transmission and distribution

Gas leakage occurs almost exclusively from low-pressure 'distribution' pipelines rather than from high-pressure 'transmission' pipelines. Approximate estimates of annual leakage in 2003 from transmission pipelines, provided by the NGC, are less than 30 tonnes of CO2 and approximately 230 tonnes of CH4 (MED, 2004).Therefore, the gas quantity shown in the worksheets excludes the gas used in electricity generation and by others that take their gas directly from the transmission network. The NGC estimates that around 3.5% of the gas entering the distribution system is unaccounted for and that around half of this (1.75%) is actually lost through leakage, whilst the other half is unaccounted for due to metering errors and theft. The split between fugitive CO2 and CH4 emissions is based on gas composition data.

Oil transport, refining and storage

Fugitive emissions from oil transport, refining and storage are calculated using an IPCC Tier 1 approach with activity data and emission factors. For oil transport, the fuel activity data are the total New Zealand production of crude oil reported in the Energy Data File (MED, 2004) and the CH4 emissions factor is the midpoint of the IPCC default value range (0.745 t CH4 / PJ). Emissions from refining and storage are both based on oil intake at New Zealand's single oil refinery. However, the CH4 emissions factor for refining is the same as that for transportation, while the emissions factor for storage is 0.14 t CH4 / PJ (a New Zealand specific emissions factor). The combined emissions factor for refining and storage is 0.885 t CH4 / PJ, derived by adding the emission factors for refining and storage together.

Geothermal operations

Estimates of CO2 and CH4 are obtained directly from the geothermal field operators. Analyses of the gases emitted from the geothermal fields occur on a routine basis (at least once a year) and are carried out by a single independent laboratory.

No fuel is burnt in the geothermal operations as the process harnesses the energy in tapped geothermal fluid. High pressure steam (26 bar) is used to power the main electricity-producing back pressure turbines. In some plants, the low pressure exhaust steam is then used to drive secondary (binary) turbines. CO2 and CH4 dissolved in the geothermal fluid are released along with steam.

3.3.2.3 Uncertainties and time-series consistency

The time-series of data from the various geothermal fields vary in completeness. Some fields were not commissioned until after 1990 and hence do not have records back to 1990.

3.3.2.4 Source-specific QA/QC and verification

No specific QA/QC activities are performed for this category.

3.3.2.5 Source-specific recalculations

CH4 emissions from one of the geothermal fields have been revised for the years 2000-2002.

3.4 Other information

3.4.1 Comparison of sectoral approach with reference approach

The calculation for the reference approach identifies the apparent consumption of fuels in New Zealand from production, import and export data. This information is used as a check for combustion related emissions. The check is performed for all years from 1990 to 2003.

The majority of the CO2 emission factors for the reference approach are New Zealand specific (Annex 2: Table A2.1). The natural gas emission factors used, which differ from year to year, are estimated based on a weighted average of emission factors for each of New Zealand's gas-fields where the weights are provided by the level of production at each field. This differs from previous inventories, where the emission factors were estimated from the sectoral approach analysis by dividing aggregated CO2 emissions (including carbon later stored) by aggregate energy use.

Comparison of the reference approach and sectoral approach total in 2003 shows that the reference total of CO2 emissions is 0.40 % less than the sectoral total (Table 3.4.1). This is mainly related to the differences in the energy consumption, although it is difficult to compare energy consumption in the reference approach with energy consumption in the sectoral approach.

In the New Zealand energy sector inventory, the activity data for the reference approach are obtained from 'calculated' energy use figures. These are derived as a residual figure from an energy balance equation comprising production, imports, exports, stock change and international transport on the supply side from which energy use for transformation activities is subtracted. The activity data used for the sectoral approach are referred to as 'observed' energy use figures. These are based on surveys and questionnaires administered by Statistics New Zealand on behalf of the MED or by the MED itself. The differences between 'calculated' and 'observed' figures are reported as statistical differences in the energy balance tables contained in the Energy Data File (MED, 2004).

The activity data and calculated emissions for the major fuel categories are not directly comparable between the reference approach and the sectoral approach. Firstly, the reference approach counts non-energy sector use of fuels such as gas in urea production, coal in steel production and bitumen use, while the sectoral approach does not. However, the carbon embodied in fuels used for these purposes is included under stored carbon in the reference approach, so estimates of emissions provided by the two approaches are not very different. Another difference between the two approaches is that in the sectoral approach, combustion of refinery gas is included under gaseous fuels consumption but this is not the case in the reference approach. This is because refinery gas is a by-product of the refining process derived from the crude oil inputs. Consequently, in the reference approach the emissions from the combustion of refinery gas are at least theoretically counted against crude oil.

The time-series comparison with the IEA data (IEA Statistics, 2004) shows that the differences between the sectoral and reference approach reported in CRF 2003 are generally less than those reported by the IEA. There are clear differences in the early part of the time-series and there is a clear trend narrowing the difference between the two sources that indicates stronger correlation in the reporting process developed over the annual inventory preparation process.

The percentage difference between the CRF 2003 and the IEA sectoral approaches is quite large. New Zealand will endeavour to investigate why there is such a large degree of disagreement between the two series.

Table 3.4.1 Percentage difference between the reference and sectoral approach for New Zealand's inventory and the IEA reference and sectoral comparison

Year Difference between New Zealand's reference and sectoral approach (%) Difference between the IEA reference and sectoral approach Difference between CRF 2003 and IEA sectoral approaches

1990

-4.98

4.80

-1.20

1991

-2.81

   

1992

-6.39

   

1993

-5.01

   

1994

-7.40

   

1995

-3.40

8.45

-8.08

1996

1.96

   

1997

2.46

   

1998

-0.21

7.09

-11.56

1999

2.69

1.05

-12.61

2000

-0.03

3.44

-13.23

2001

0.68

2.94

-12.64

2002

-0.90

-2.53

-14.26

2003

-0.40

   

3.4.2 International bunker fuels

The data on fuel use by international transportation come from the Energy Data File (MED, 2004). This sources information from oil company returns provided to the MED. Data on fuel use by domestic transport are sourced from the Deliveries of Petroleum Fuels by Industry survey undertaken by Statistics New Zealand.

3.4.3 Feedstocks and non-energy use of fuels

The fuels supplied to industrial companies are used both as fuel and as feedstock. The emissions are calculated using the total fuel supplied to each company (this includes fuel used as feedstock) and estimating the difference between the carbon content of the fuels used and the carbon sequestered in the final output (this is based on the industry production and the chemical composition of the products). This difference is assumed to be the amount of carbon emitted as CO2. An example of the calculation for methanol is shown in Box 3.1. A considerable amount of coal is used in the production of steel, however virtually all of the coal is used in a direct reduction process to remove oxygen from ironsand and not as a fuel.

3.4.4 CO2 capture from flue gases and subsequent CO2 storage

There is no CO2 capture from flue gases and subsequent CO2 storage occurring in New Zealand at present.

3.4.5 Country specific issues

Energy sector reporting shows very few areas of divergence from the IPCC methodology. The differences that exist are listed below:

  • A detailed subdivision of the 'manufacturing and construction' category as requested by the IPCC reporting tables is currently not available due to historical needs and practices of energy statistics collection in New Zealand. This situation has improved since the last submission with the inclusion of gas used in iron and steel making.
  • Some gas usage data from large industrial consumers in New Zealand and some emission factors for gas have been withheld for confidentiality reasons.
  • Some of the coal production activity data in the reference approach are used in steel production. The CO2 emissions from this coal are accounted for under the industrial processes sector and have been netted out of the energy reference approach using the Estimating the carbonstored in products Table (refer to Worksheet 1.1, Annex 8).
  • The activity data shown in the CO2 worksheets (Worksheet 1.2, Annex 8) under the sectoral approach exclude energy sources containing carbon that is later stored in manufactured products (rather than emitted during combustion), specifically methanol. This means that there is no subsequent downward adjustment required in carbon emissions and is necessary to preserve the confidentiality of the gas-use data mentioned above.
  • An additional worksheet is included to cover fugitive emissions of CO2 and CH4 from geothermal fields where electricity or heat generation plants are in operation.

3.4.6 Ozone precursors and sulphur dioxide from oil refining

New Zealand's only oil refinery does not have a catalytic cracker. The emission factors used are the IPCC default values. The amounts of sulphur recovered at the refinery are provided by the New Zealand Refining Company. All storage tanks at the refinery are equipped with floating roofs and all but two have primary seals installed.