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Chapter 3: Energy

3.1 Sector overview

The energy sector produced 31,647.91 Gg CO2 equivalent in 2004 and represented 42.4 percent of New Zealand's total greenhouse gas emissions. Emissions from the energy sector are now 33.8 percent above the 1990 baseline value of 23,655.15 Gg CO2 equivalent (Figure 3.1.1). The sources contributing most to this increase since 1990 are emissions from "road transportation" (an increase of 62.7 percent) and public electricity and heat production (an increase of 73.6 percent) subcategories. Emissions from the "manufacture of solid fuels and other energy industries" subcategory have decreased by 1482.58 Gg CO2 equivalent (83.4 percent) from 1990, mainly due to the ceasing of synthetic petrol production in 1997.

Figure 3.1.1 Energy sector emissions 1990-2004

Year

Gg CO2 equivalent (thousands)

1990

23.66

1991

23.93

1992

25.69

1993

24.97

1994

25.21

1995

25.12

1996

26.17

1997

28.50

1998

27.10

1999

28.45

2000

28.95

2001

30.89

2002

30.89

2003

32.31

2004

31.65

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 subcategories - 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 2004 inventory. Information about methodologies, emission factors, uncertainty and quality assurance relevant to several subcategories are discussed below.

Figure 3.2.1 Emissions from the energy sector: fuel combustion category in 2004 (all figures Gg CO2 equivalent)

 

Category

Gg CO2 equivalent

Percent of total

Energy Industries

7,184.39

22.7

Manufacturing Industries and Construction

5,093.10

16.1

Transport

14,313.20

45.2

Other Sectors

3,475.47

11.0

3.2.0.2 Methodological issues

Energy sector emissions for New Zealand's inventory are compiled from the Ministry of Economic Development (MED)'s energy database along with the relevant emission factors (Annex 2). Generally, greenhouse gas emissions are calculated by multiplying the emission 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 categories for New Zealand in the 2004 inventory. The relevant good practice decision tree (Figure 2.1 in IPCC, 2000) identifies that to meet good practice, emissions should be estimated using data from sectors correcting for stored carbon and oxidation (a Tier 1 sectoral approach). New Zealand has data on fuels combusted by sector but not by plant. The methodologies used for the energy sector 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 did commission 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 the country-specific factors could not be supported, 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. They have been used in all subsequent inventories.

Prior to the 2002 inventory, the CO2 emission factors used in inventories for the transport "category" were sourced from the New Zealand Energy Information Handbook (Baines, 1993). These are replaced with the emission factors for individual liquid fuels derived from the New Zealand Refining Company 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.

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 percent and is 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 99.6 percent 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. 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, 2005).

Table 3.2.1 General uncertainty ranges for emission estimates from fuel combustion (MED, 2005)

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 7,184.39 Gg CO2 equivalent in 2004 and have increased 1,139.42 Gg CO2 equivalent (18.8 percent) since 1990. The emissions profile in 2004 is dominated by emissions from "public electricity and heat production" which contributed 84.4 percent of the CO2 equivalent emissions from the "energy industries" category.

New Zealand's electricity generation is dominated by hydro-electric generation. On average, 67 percent of annual electricity needs are met by hydro-electric generation. Geothermal power contributes another 7 percent and there are also contributions from other renewable sources such as wind and co-generation using wood. The balance is provided by thermal generation using natural gas and coal.

Greenhouse gas emissions from public electricity generation show large year-to-year fluctuations because use of thermal stations complements the hydro-electric generation available. 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 2004, clearly illustrates that on an annual basis when the level of hydro-electric generation decreases, the level of thermal generation (gas, coal and oil) increases. It should be noted that since 1998 there has been added 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 1974-2004

 

Year Electricity generated - hydro (GWh) (thousands) Electricity generated - thermal (GWh) (thousands)
1974 15.037 3.454
1975 16.497 1.889
1976 15.344 4.183
1977 14.573 5.599
1978 15.503 4.705
1979 18.259 2.385
1980 19.171 1.909
1981 19.483 2.195
1982 18.121 4.806
1983 19.554 4.932
1984 20.173 5.283
1985 19.511 6.452
1986 21.877 4.880
1987 21.709 5.543
1988 22.733 5.754
1989 22.333 5.949
1990 22.953 5.833
1991 22.666 7.179
1992 20.882 8.237
1993 23.258 7.164
1994 25.579 5.656
1995 27.259 5.273
1996 25.713 7.140
1997 22.948 10.110
1998 25.006 8.401
1999 23.221 10.124
2000 24.387 9.881
2001 22.391 12.161
2002 24.970 10.871
2003 23.464 12.705
2004 26.755 10.474

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 under "electricity and heat production" while emissions from other co-generation plants are included under the "manufacturing industries and construction (other)" subcategory.

Petroleum refining

Energy use data for "petroleum refining" subcategory are supplied to the MED by the New Zealand Refining Company Limited. 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" subcategory 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 carbon content, and therefore the CO2 emission factor, for this gas is lower for end users than when it is used by the gas field itself. Therefore the CO2 implied emission factor for "manufacturing of solid fuels and other energy industries" subcategory is significantly higher than the CO2 implied emission factor for typical gaseous fuels for other energy sub-categories. The sequestration of carbon in synthetic petrol made up for this difference 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 percent less than the GCV. In line with good practice (IPCC, 2000) carbon dioxide emissions from wood used for energy production are not included in the greenhouse gas emissions total.

The worksheets used for calculating emissions from the "energy industries" category are shown in Annex 8.1.

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" subcategory. In preparation of the 2004 inventory, the data for electricity production and petroleum refining underwent a Tier 1 QC checklist.

3.2.1.5 Source-specific recalculations

Data revision by the MED has resulted in the minor recalculation of the "energy industries" category.

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 5,093.10 Gg CO2 equivalent in 2004. The level of emissions in 2004 has reduced by 14.3 percent compared to 2003, and is 10.4 percent over the 1990 baseline. The largest single source in 2004 is the "chemicals" subcategory, made up entirely of emissions from natural gas consumption in the manufacture of methanol. Emissions from this subcategory have halved since 2002, largely due to a decline in the availability of low-priced natural gas. However, emissions still comprised 15.9 percent of emissions from "manufacturing industries and construction category".

3.2.2.2 Methodological issues

The energy data for methanol production is supplied directly to MED. CO2 emissions are calculated by comparing the amount of carbon in the gas purchased by the plants with the amount stored in methanol (refer Box 3.1). The data for gas use in iron and steel-making is also supplied direct to MED. The data for other industry uses of gas are from the energy supply and demand balance tables in the Energy Data File (MED, 2005).

Box 3.1 Calculation of CO2 emissions from methanol production (MED, 2005)

Assumptions

  • Synthetic petrol is 85.8% carbon by weight.
  • Methanol is 37.5% carbon by weight.
  • CO2 emissions factor for Maui gas is 52.8 kt / PJ (2002) (refer Annex 2).
  • CO2 emissions factor for Kapuni gas is 84.1kt /PJ.
  • CO2 emissions factor for mixed feed gas is 62.4 kt/PJ.

The resulting calculations are:

  • Weight of carbon in gas to Methanex = [(PJ Maui)*52.8 + (PJ Kapuni)*84.1 + (PJ mixed feed)*62.4] *12/44 kilotonnes.
  • 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] kilotonnes.
  • Total emissions of CO2 = [(weight of carbon in gas to Methanex)-(weight of carbon sequestered)] * 44/12 kilotonnes.

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 also 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 iron sand 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 Australia New Zealand Standard Industrial Classification (ANZSIC) codes, similar to the International Standard Industrial Classification of All Economic Activities (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 more aggregated 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 subcategory "chemicals" relates to gas used by Methanex.

The worksheets used for calculating emissions from the "manufacturing industries and construction" category are shown in Annex 8.1.

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 2004 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

Data revision by the MED has resulted in the minor recalculation of the "manufacturing industries and construction" category.

3.2.3 Fuel combustion: transport (CRF 1A3)

3.2.3.1 Description

This category comprises emissions from fuels combusted 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 14,313.20 Gg CO2 equivalent in 2004 and have increased 5,456.45 Gg CO2 equivalent (61.6 percent) from the 8,856.75 Gg CO2 equivalent emitted in 1990. The emissions profile in 2004 is dominated by emissions from the "road transportation" subcategory which accounted for 87.2 percent of total transport emissions. CO2 emissions from the "road transportation" subcategory was identified as having a major influence on the trend in New Zealand's greenhouse gas emissions in the key category trend analysis (Table 1.5.3).

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 (total fuel consumed multiplied by an emission factor) for calculating CO2 emissions as this provides the most reliable estimate of emissions using country-specific and IPCC default emission factors.

Activity data on the consumption of fuel by the transport sector are extracted from the Wholesale deliveries census conducted by Statistics New Zealand. LPG and CNG consumption figures are reported in the Energy Data file (MED, 2005).

Road transport

The Tier 1 approach has been used to calculate CO2 from road transport which is consistent with good practice (IPCC, 2000). Good practice encourages the use of a Tier 2 approach for calculating emissions of CH4 and N2O. However emissions from these gases are more complicated to estimate accurately because emission factors depend on vehicle technology, fuel and operating characteristics. The Ministry of Transport (MoT) has been developing a vehicle fleet model which was used as a quality check for the CO2 emissions from road transport in the 2003 inventory. This model however currently is unable to provide accurate emission factors for the non CO2 gases. New Zealand therefore estimates CH4 and N2O emissions from road transport using a Tier 1 approach. Emission factors of CO2 and non-CO2 gases for various fuel types can be found in Annex 2.

Navigation

Good practice in methodology choice for navigation in New Zealand is to use a Tier 1 approach with country-specific emission factors 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. There is no basis to split the domestic and international components of fuel use for international flights with a domestic leg. This is because aviation and marine fuel use information is available from the oil companies rather than from the airlines or the shipping companies.

The worksheets used for calculating emissions from the "transport" category are shown in Annex 8.1.

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 categories for New Zealand in the 2004 inventory. In preparation of the 2004 inventory, the data for these emissions underwent a Tier 1 QC checklist.

3.2.3.5 Source-specific recalculations

Data revision by the MED has resulted in the minor recalculation of the "transport" category.

3.2.4 Fuel combustion: other sectors (CRF 1A4)

3.2.4.1 Description

This sector comprises emissions from fuels combusted in the "commercial/institutional" subcategory, the "residential" subcategory and the "agriculture, forestry and fisheries" subcategory.

Emissions from fuel combustion of the "other sectors" category totalled 3,475.47 Gg CO2 equivalent in 2004 and are 543.51 Gg CO2 equivalent (18.5 percent) over the 1990 baseline value of 2,931.96 Gg CO2 equivalent. The emissions contribution in 2004 is divided between the "commercial and institutional" subcategory (49.1 percent), and the "agriculture, forestry and fisheries" subcategory (33.7 percent), with the "residential" subcategory comprising the remaining 17.3 percent 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" subcategory are likely to be underestimated (MED, 2005). 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.

The worksheets used for calculating emissions from the "other sectors" category are shown in Annex 8.1.

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 2004 inventory, the data for the "other sectors" category underwent a Tier 1 QC checklist as part of a selection of non-key categories chosen for quality checking. As this category is a non-key source and was not on the list of non-key categories to undergo quality checks for 2004 it did not undergo a Tier 1 quality check for this inventory submission.

3.2.4.5 Source-specific recalculations

There were no recalculations for this category.

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 the "solid fuels" category produced 311.88.Gg CO2 equivalent in 2004. This is an increase of 39.75 Gg CO2 equivalent (14.6 percent) from the 272.13 Gg CO2 equivalent reported in 1990. New Zealand's fugitive emissions from the "solid fuels" category are a product of coal mining operations.

Methane is created during coal formation. The amount of CH4 released during coal mining is dependant 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 2004, 75 percent of the CH4 from coal mining (including post-mining emissions) came from underground mining. There is no flaring of CH4 at coal mines and CH4 is rarely captured for industrial uses. Methane 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). New Zealand continues to use a New Zealand specific emission factor for underground mining of sub-bituminous coal (Beamish and Vance, 1992). In 2004, coal production from underground mining by weight was 255 kt bituminous coal and 472 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 (t CH4/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 2004 inventory, the data for the "solid fuels" category underwent a Tier 1 QC checklist as part of a selection of non-key categories chosen for quality checking. As this category is a non-key source, and was not on the list of non-key sources to undergo quality checks for 2004, it did not undergo a Tier 1 quality check for this inventory submission.

3.3.1.5 Source-specific recalculations

There were no recalculations for this category.

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

3.3.2.1 Description

Fugitive emissions from the "oil and natural gas" category comprised 1,269.86 Gg CO2 equivalent in 2004. This is an increase of 333.66 Gg CO2 equivalent (35.7 percent) from 936.20 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 under 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 percent (MED, 2005), leaving some fugitive emissions due to the incomplete combustion.

Fugitive emissions also occur in transmission and distribution of the natural gas. The large increase in CO2 emissions for this source between 2003 and 2004 (from 367 to 601 Gg CO2 equivalent) is related to the drop in methanol production. As discussed earlier, methanol production has dropped significantly since 2002. Carbon previously sequested during this process is now being released as fugitive emissions from venting at the Kapuni Gas Treatment Plant.

This sector also includes emissions from geothermal operations. Some of the energy from geothermal fields is transformed into electricity and the emissions are reported under this category. This is because they are not the result of fuel combustion, unlike the emissions reported under 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 a 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

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 2004 from transmission pipelines, provided by NGC, are less than 25 tonnes of CO2 and approximately 183 tonnes of CH4 (MED, 2005).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 percent of the gas entering the distribution system is unaccounted for and that around half of this (1.75 percent) 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 sub-categories are calculated using an IPCC Tier 1 approach with activity data and emission factors. For Oil Transport, the fuel activity data is the total New Zealand production of crude oil reported in the Energy Data File (MED, 2005), and the CH4 emission 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. The CH4 emission factor for refining is the same as that for transportation, while the emission factor for storage is 0.14 t CH4 / PJ (a New Zealand specific emission factor). The combined emissions factor for refining and storage is 0.885 t CH4 / PJ, derived by adding the emissions 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. The gases 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 varies 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

Data revision by the MED has resulted in the minor recalculation of the "oil and natural gas" category.

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 included as a check for combustion related emissions (IPCC, 2000). The check is performed for all years from 1990 to 2004.

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 production derived weighted average of emission factors for each of New Zealand's gasfields. This differs from previous inventories, where the emissions 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 2004 shows the reference total of CO2 emissions is 1.46 percent less than the sectoral total (Table 3.4.1). This is mainly related to the differences in energy consumption, although, it is difficult to compare energy consumption in the reference approach with energy consumption in the sectoral approach.

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 the 'observed' figures are reported as statistical differences in the energy balance tables contained in the Energy Data File (MED, 2005).

The energy use and calculated emissions for the major fuel categories are not directly comparable between the reference and sectoral approaches. 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. Another difference 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 counted against crude oil.

The time-series comparison with the IEA data (IEA Statistics, 2005) shows that the differences between the sectoral and reference approach reported in CRF 2004 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 2004 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 2004 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

1.30

-6.40

2004

1.46

   

3.4.2 International bunker fuels

The data on fuel use by international transportation come from the Energy Data File (MED, 2005). 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 above. 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.

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 source 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.
  • 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 is 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 carbon stored 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 SO2 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.

3.4.7 Energy balance

A table showing the 2004 energy supply and demand balance for New Zealand is included in Annex 2 of this report.