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Chapter 3: Energy

3.1 Sector overview

The energy sector produced 32,653.1 Gg carbon dioxide equivalent (CO2-e) in 2007, representing 43.2 per cent of New Zealand’s total greenhouse gas emissions. Emissions from the energy sector were 39.2 per cent (9,200.3 Gg CO2-e) above the 1990 level of 23,452.8 Gg CO2-e (Figure 3.1.1). The sources contributing most to this increase are emissions from the public electricity and heat production subcategory, an increase of 3,167.9 Gg CO2-e (91.3 per cent), and the road transportation subcategory, an increase of 5,832.9 Gg CO2-e (76.2 per cent). Emissions from the manufacture of solid fuels and the other energy industries subcategory have decreased by 1,442.2 Gg CO2-e (–81.2 per cent) from 1990. This decrease is primarily due to the cessation of synthetic petrol production in 1997. Carbon dioxide emissions from the stationary combustion of solid, liquid and gaseous fuels were identified as key categories (level and trend) in 2007.

Changes in emissions between 2006 and 2007

Between 2006 and 2009, emissions from the energy sector decreased by 1,357.5 Gg CO2-e (4.0 per cent). This was due to the commissioning of Genesis Energy’s combined cycle gas turbine at Huntly and the corresponding reduction in coal-fired electricity generation.

Figure 3.1.1 New Zealand’s energy sector emissions from 1990 to 2007

Figure 3.1.1 New Zealand's energy sector emissions from 1990 to 2007

Year Gg CO2-equivalent
1990 23,452.8
1991 23,750.8
1992 25,465.1
1993 24,809.3
1994 25,066.9
1995 25,042.7
1996 26,075.3
1997 28,477.4
1998 27,027.4
1999 28,160.8
2000 28,987.3
2001 30,855.9
2002 30,951.4
2003 32,550.1
2004 31,845.2
2005 33,479.0
2006 34,010.6
2007 32,653.1

3.2 Fuel combustion (CRF 1A)

Description

The fuel combustion category reports all fuel combustion activities from energy industries, manufacturing industries and construction, transport and other sectors subcategories (Figure 3.2.1). These subcategories use common activity data sources and emission factors. The common reporting tables require energy emissions to be reported by subcategory. Apportioning energy activity data across subcategories is not as accurate as apportioning activity data by fuel type because of difficulties in allocating liquid fuel to the appropriate subcategories.

The activity data and emissions estimates for 2007 are included in the MS Excel worksheets available for download with this report from the Ministry for the Environment’s website (here). Information about methodologies, emission factors, uncertainty and quality control and assurance relevant to each of the subcategories are discussed below.

Figure 3.2.1  Change in New Zealand’s emissions from the fuel combustion categories from 1990 to 2007: fuel combustion

Figure 3.2.1 Change in New Zealand's emissions from the fuel combustion categories from 1990 to 2007: fuel combustion

Category 1990
(Gg CO2-equivalent)
2007
(Gg CO2- equivalent)
Energy Industries 6,018.0 7,867.4
Manufacturing industries & construction 4,571.3 5,380.9
Transport 8,761.7 14,877.2
Other Sectors 2,870.9 2,766.6

Methodological issues

Energy activity data is compiled using the Ministry of Economic Development’s energy database along with relevant New Zealand-specific emission factors. Greenhouse gas emissions are calculated by multiplying the emission factor of specific fuels by the activity data. A minority of emission factors are not able to be reported due to confidentiality reasons. These emission factors have been reported as confidential in the common reporting format tables.

The fuel combustion category is separated into stationary combustion and mobile combustion. New Zealand has data on fuel combustion detailed by fuel type and subcategory. The methodologies used to calculate emissions for the energy sector are based on the (Intergovernmental Panel on Climate Change) IPCC Tier 1 approach, as data is not available for every individual energy facility.

Activity data – liquid fuels

Statistics New Zealand conducts the Delivery of Petroleum Fuels by Industry Survey. The survey is run as a quarterly census. The purpose of the census is to provide data on the amount of fuel delivered by all oil companies to end-users and other distribution outlets. Each oil company in New Zealand supplies Statistics New Zealand with the volume of petroleum fuels delivered to resellers and industry groups. The volume of petroleum fuels is based on weight, in tonnes. In previous inventory submissions, a single calorific value was applied to convert the weight values into energy terms (petajoules). In the 2008 inventory submission, improvements were made to the data by applying year-specific calorific values to petrol and diesel data. For this inventory submission, year-specific calorific values were applied to all liquid fuel data. The Ministry of Economic Development updated the data to a time series of calorific values to better reflect changes in liquid fuel properties over time.

Activity data – solid fuels

Statistics New Zealand also conducts the New Zealand Coal Sales Survey as a quarterly survey under the Statistics Act 1975. The survey covers coalmines and major resellers of coal in New Zealand. The three grades of coal estimated are bituminous, sub-bituminous and lignite coal. The coal sales questionnaire separates coal sales into seven end-use sectors. The sectoral shares of coal use that can be used for the inventory are based on CRL Energy Ltd’s survey of sectoral coal use for 1990 and 1995. Data was interpolated between 1990 and 1995. The exceptions were for the coal used for iron and steel, residential household and the public electricity and heat production subcategories. The Ministry of Economic Development receives this information directly from companies.

Sectoral shares of coal were calculated by:

  • summing the four calendar year quarters of coal sales data from the New Zealand Coal Sales Survey

  • subtracting coal exports, coal used by the residential sector, coal used for iron and steel production, and coal used for public electricity and heat production. Then, dividing CRL Energy’s annual coal tonnage for each sector by the total (excluding exports, steel, electricity and residential coal use), to provide sectoral shares of coal use for 1990 and 1995

  • interpolating sectoral shares between 1990 and 1995

  • year-specific calorific values for the different grades of coal were provided by CRL Energy Ltd between 1995 and 2007.

The 1995 calorific value was adopted for the years 1990–1994 in the absence of other data. This updated data has been incorporated in this inventory submission.

Further improvements in this inventory submission are that a consistent time series for three grades of coal were estimated instead of four grades of coal (bituminous, sub-bituminous, lignite, peat/coke) reported in previous submissions. Better alignment between the reference and sectoral approaches was achieved by including peat/coke under the bituminous grade.

Activity data – gaseous fuels

The Ministry of Economic Development receives activity data on gaseous fuel from a variety of sources. Individual gas field operators provide information on the amount of gas extracted, vented and flared at each gas field. Vector Ltd provides data on processed gas, including the Kapuni gas field, and information on gas transmission and distribution throughout New Zealand. Large uses of gas, including electricity generation companies, provide their activity data directly to the Ministry of Economic Development. Finally, the Ministry of Economic Development surveys retailers and wholesalers on a quarterly basis to obtain activity data from small industrial, commercial and residential gas users.

Activity data – biomass

Activity data for the use of biomass comes directly from the companies involved with combusting wood residues to provide process heat in the wood processing industry (ie, kiln drying) and electricity production from cogeneration plants.

Emission factors

New Zealand emission factors are based on gross calorific values. A list of emission factors for CO2, CH4 and N2O for all fuel types is listed in Annex 2. Explanation of the characteristics of liquid, solid and gaseous fuels and biomass used in New Zealand are described under each of the fuel sections below.

A review of New Zealand’s energy emission factors in 2003 (Hale and Twomey Ltd, 2003) identified a number of non-CO2 emission factors, where the supporting information was assessed to be insufficient to retain the New Zealand-specific emission factors used in previous inventories. Where a New Zealand-specific value is not available, New Zealand uses either the IPCC value that best reflects New Zealand conditions or the mid-point value from the IPCC range. All emission factors from the revised IPCC 1996 guidelines (IPCC, 1996) are converted from net calorific value to gross calorific value.

The emission factors recommended by the Hale and Twomey review and agreed by a New Zealand review panel, were first used in the 2004 inventory submission and have been used in all subsequent inventory submissions. The exception is the use of the IPCC default emission factors for CH4 emissions in road transport. The default IPCC factor has been used since the 2007 inventory submission following a recommendation by the international expert review team.

Emission factors – liquid fuels

The CO2 emission factors for oil products are from the New Zealand Refining Company (NZRC) data, import data from industry and from Baines (1993). There is a direct relationship between each fuel’s carbon content and the corresponding CO2 emissions during combustion. However, the carbon composition of oil products is not closely monitored and there will be variation over time, depending on the crude oil used in production.

Before the 2004 inventory submission, the CO2 emission factors used in inventories for the transport category were sourced from the New Zealand Energy Information Handbook (Baines, 1993). As a result of the Hale and Twomey review, the CO2 emission factors were replaced with individual liquid fuel emission factors derived from the NZRC data on carbon content and calorific values. The liquid fuel emission factors are available on an annual basis. Improvements on emission factors have also been made when the fuel specifications of liquid fuels change, such as lower sulphur content of diesel oil in 2006.

Emission factors – solid fuels

In previous inventory submissions, New Zealand’s emissions from coal combustion in the public electricity and heat production subcategory were calculated using the emission factor for sub-bituminous coal of 92.99 kt CO2/PJ (Baines, 1993). In 2008, the electricity generator contacted the Ministry of Economic Development to request an update of this value. The assumption was made that using the overall sub-bituminous value for the public electricity and heat production subcategory (91.20 ktCO2/PJ) is consistent with other coal burning activities in New Zealand. This updated emission factor is included for the whole time series (1990–2007) for the public electricity and heat production subcategory.

Emission factors – gaseous fuels

In previous inventory submissions, New Zealand used the gas production from the Maui and Kapuni gas fields reported in the New Zealand Energy Data File (Ministry of Economic Development, 2008b) to support the calculation of a weighted average annual CO2 emission factor for natural gas. For this inventory submission, the average emission factor was calculated based on all the gas production fields (Ministry of Economic Development, 2008b). This method is more accurate as the decline in production of both Maui and Kapuni gas fields has been replaced by other new gas fields (eg, Pohukura) coming on stream. This updated emission factor was applied to a number of categories in the energy sector eg, the manufacturing industries and construction category and the road transportation subcategory.

New Zealand has one gas field, Kapuni, with a particularly high CO2 content. Historically, this field has been valued by the petrochemicals industry as a feedstock. However, most of the gas from this field is now treated and the excess CO2 removed. Separate emissions’ factors were used for Kapuni treated and un-treated gas due to the difference in carbon content (refer to Annex 2).

Emission factors – biomass

The emission factors for wood consumption are calculated from the IPCC default emission factors (IPCC, 1996), assuming the net calorific value is 5 per cent less than the gross calorific value. In accordance with good practice (IPCC, 2000), CO2 emissions from wood used for energy production are reported as a memo item and not included in the greenhouse gas emissions total.

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 per cent and is primarily due to uncertainty in activity data rather than emission factors. This is because of the direct relationship between the carbon content of the fuel and the corresponding CO2 emissions during combustion. The low level of uncertainty in CO2 emissions is important as CO2 emissions comprised 96.7 per cent of energy sector emissions in 2007.

In comparison, emissions of the non-CO2 gases are much less certain as emissions vary with combustion conditions. Many of the non-CO2 emission factors used by New Zealand are the IPCC default values. The revised 1996 IPCC guidelines (IPCC, 1996) have not quantified the uncertainty in all of the default emission factors. The uncertainties proposed in Table 3.2.1 are best estimates derived for New Zealand conditions (Ministry of Economic Development, 2006).

Table 3.2.1 General uncertainty ranges for New Zealand’s emission estimates from fuel combustion (Ministry of Economic Development, 2006)

Gas Uncertainty
CO2 ± 5%
CH4 ± 50%
N2O ± 50%
NOx ± 33%
CO ± 50%
NMVOC ± 50%

3.2.1 Fuel combustion: Energy industries (CRF 1A1)

Description

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

In 2007, emissions in the energy industries category totalled 7,867.4 Gg CO2-e (24.1 per cent) of the energy sector. Emissions from energy industries have increased 1,849.4 Gg CO2-e (30.7 per cent) since the 1990 level of 6,018.0 Gg CO2-e. The public electricity and heat production subcategory accounted for 6,639.1 Gg CO2-e (84.4 per cent) of the emissions from the energy industries category in 2007. This is an increase of 3,167.9 Gg CO2-e (91.3 per cent) from the 1990 level of 3,471.1 Gg CO2-e. Emissions from the public electricity and heat production subcategory have decreased by 17.9 per cent between 2006 and 2007. The major change influencing this reduction was the commissioning of Genesis Energy’s combined cycle gas turbine at Huntly and the corresponding reduction in coal-fired generation.

New Zealand’s electricity generation is dominated by hydroelectric generation. For the 2007 calendar year, hydro generation provided 55 per cent of New Zealand’s electricity generation. A further 12 per cent came from other renewable sources (such as geothermal, wind and biomass) and waste heat sources. The remaining 33 per cent was provided by fossil fuel thermal generation plants using oil, gas and coal (Ministry of Economic Development, 2008b).

Greenhouse gas emissions from the public electricity and heat production subcategory show large inter-annual fluctuations, as the use of thermal power generation stations complements the hydroelectric generation available. New Zealand’s hydro resources have limited storage capacity, with around 12 weeks of reservoir storage under normal circumstances (OECD/IEA, 2006). Generation in a “normal” hydro year requires lower gas and coal use, while 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 observed in electricity generation in many other countries.

Figure 3.2.2 shows net electricity production by fuel type from 1990 to 2007. The figure illustrates that on an annual basis when the level of hydroelectric generation decreases, the level of thermal electricity generation from fossil fuels (gas, coal and oil) increases.

Figure 3.2.2 New Zealand’s hydroelectric and thermal generation from 1990 to 2007

Figure 3.2.2 New Zealand's hydroelectric and thermal generation from 1990 to 2007

Year Electricity generated - hydro (GWh) Electricity generated - thermal (GWh)
1990 22,953.0 8,047.0
1991 22,666.0 9,447.0
1992 20,882.0 10,560.0
1993 23,258.0 9,576.0
1994 25,579.0 7,926.0
1995 27,259.0 7,475.0
1996 25,713.0 9,323.0
1997 23,594.0 11,805.0
1998 24,165.0 11,996.0
1999 23,221.0 13,344.0
2000 24,387.0 13,230.0
2001 22,391.0 15,398.0
2002 24,970.0 13,978.0
2003 23,455.0 15,630.0
2004 26,932.0 13,760.0
2005 23,099.0 17,271.0
2006 23,124.0 17,511.0
2007 23,283.0 17,393.0

Methodological issues

Public electricity and heat production

All thermal electricity generators provide the amount of coal, gas and oil used for electricity production to the Ministry of Economic Development.

Around 7 per cent of New Zealand’s electricity is supplied by co-generation (also 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. According to the definition of public electricity and heat production in the revised 1996 IPCC guidelines (IPCC, 1996), there is only one co-generation plant in New Zealand producing electricity as its primary purpose. The emissions from this plant are included under the public electricity and heat production subcategory. Emissions from other co-generation plants are included within the manufacturing industries and construction category.

Petroleum refining

The New Zealand Refining Company provides the Ministry of Economic Development with CO2 emissions associated with activities from the petroleum refining subcategory. As no data is available concerning non-CO2 emissions from the refinery, IPCC default emission factors for industrial boilers are used (IPCC, 1996).

Manufacturing of solid fuels and other energy industries

New Zealand reports emissions from natural gas in oil and gas extraction and natural gas in synthetic petrol production.

Activity data for oil and gas extraction is provided to the Ministry of Economic Development by each individual gas field operator. Activity data for synthetic petrol production was provided by MethaNexx New Zealand while the plant was in operation. Production of synthetic petrol ceased in 1997.

The low implied emission factors (IEFs) for manufacturing of solid fuels and other energy industries subcategory for gaseous fuels between 1990 and 1996 were caused by the sequestration of carbon during the synthetic petrol production process.

Uncertainties and time-series consistency

Uncertainties in emissions estimates for this category are relevant to the entire fuel combustion sector (refer to Table 3.2.1).

Source-specific QA/QC and verification

In preparation of this inventory, the energy industries category underwent Tier 1 quality checks.

Source-specific recalculations

In previous inventory submissions, constant calorific values were used to convert tonnes (t) of fuel to petajoules (PJ) of fuel for both solid and liquid fuels. For this inventory submission, year-specific calorific values have been introduced to improve the accuracy of the activity data between 1990 and 2007.

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

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.

In 2007, emissions from the manufacturing industries and construction category accounted for 5,380.9 Gg CO2-e (16.5 per cent) emissions from the energy sector. Emissions were 809.6 Gg CO2-e (17.7 per cent) above the 1990 level of 4,571.3 Gg CO2-e. A decline in methanol production between 2003 and 2004 caused a significant reduction in emissions from this category.

New Zealand has one methanol production plant. In order to protect the confidentiality of data from the plant, only emissions are reported in the common reporting format tables. Fuel consumption is confidential and the notation ‘C’, for confidential, is reported in the common reporting format tables.

Due to the confidentiality of the methanol activity data, the implied emission factor for gaseous fuel under the manufacturing industries and construction category does not fully capture the total amount of gas consumed in this category. Therefore, the implied emission factors for CO2, CH4 and N2O are not comparable with other countries. This also affects the gaseous fuel total for sectoral approach. The difference between the reference and sectoral approach for gaseous fuel can be explained by the unreported gas consumption data in the sectoral approach.

Methodological issues

Activity data for coal used in iron and steel production is reported to the Ministry of Economic Development by New Zealand Steel Ltd. A considerable amount of coal is used in the production of iron. However, almost all of the coal is used in a direct reduction process to remove oxygen from ironsand and not as a fuel. All emissions from the use of coal are therefore included in the industrial processes sector. A small amount of gas is used in the production of iron and steel to provide energy for the process. This data also comes directly from New Zealand Steel Ltd.

Methanol production is the largest source of emissions in the chemical subcategory. The activity data for methanol production is supplied directly by MethaNexx New Zealand. Carbon dioxide emissions are calculated by comparing the amount of carbon in the gas purchased by the plant with the amount stored in methanol as shown in Box 3.1.

Box 3.1 New Zealand’s calculation of CO2 emissions from methanol production

Assumptions:

  • Synthetic petrol is 85.8% carbon by weight.

  • Methanol is 37.5% carbon by weight.

  • CO2 emissions factor for Maui gas is 52.2 kt/PJ (2007) (refer Annex 2).

  • CO2 emissions factor for Kapuni gas is 84.1 kt/PJ.

  • CO2 emissions factor for mixed feed gas is 62.4 kt/PJ.

The resulting calculations are:

  • Weight of carbon in gas to MethaNexx = [(PJ Maui)*51.9 + (PJ Kapuni)*84.1 + (PJ mixed feed)*62.4] *12/44 kilotonnes.

  • Weight of carbon in synthetic 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 MethaNexx) – (weight of carbon sequestered)] * 44/12 kilotonnes.

The activity data for the other subcategory (including construction, food and beverage and dairy processing) was from the Delivery of Petroleum Fuels by Industry Survey, the New Zealand Coal Sales Survey and energy supply and demand balance tables in the Energy Data File (Ministry of Economic Development, 2008b). Data disaggregated by industry type, such as food processing, beverages and tobacco, is currently unavailable in New Zealand. Therefore, activity data and related emissions are reported as aggregate values under the other subcategory.

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).

Source-specific QA/QC and verification

In preparation of this inventory, the data for CO2 emissions from stationary combustion underwent IPCC Tier 1 quality checks.

Source-specific recalculations

In previous inventory submissions, constant calorific values were used to convert tonnes (t) of fuel to petajoules (PJ) of fuel. For this submission, year-specific calorific values have been introduced to improve the accuracy of the activity data between 1990 and 2007.

3.2.3 Fuel combustion: transport (CRF 1A3)

Description

This category includes emissions from fuels combusted during domestic transportation such as civil aviation, road, rail and domestic marine transport. Emissions from international marine and aviation bunkers are reported but are not included in the total emissions.

In 2007, the transport category was responsible for 14,877.2 Gg CO2-e (45.6 per cent) of emissions from the energy sector, or 19.7 per cent of total emissions. Emissions increased 6,115.5 Gg CO2-e (69.8 per cent) from the 8,761.7 Gg CO2-e emitted in 1990. The transport emissions profile in 2007 was dominated by emissions from the road transportation subcategory. In 2007, road transport accounted for 13,482.7 Gg CO2-e (90.6 per cent) of total transport emissions. This was an increase of 5,832.9 Gg CO2-e (76.2 per cent) from the 1990 level of 7,649.9 Gg CO2-e. Carbon dioxide emissions from road transport were identified as a key category (trend and level) in 2007. Carbon dioxide emissions from aviation were also identified as a key category (level) in 2007.

Methodological issues

Emissions from transport were compiled from the Ministry for Economic Development’s energy database using a Tier 1 approach (IPCC, 2000).

Activity data on the consumption of fuel by the transport sector came from the Delivery of Petroleum Fuels by Industry Survey conducted by Statistics New Zealand. Liquefied petroleum gas (LPG) and compressed natural gas (CNG) consumption figures are reported in the Energy Data File (Ministry of Economic Development, 2008b).

Road transportation

The Tier 1 approach is used to calculate CO2 from road transport in accordance with good practice, as this approach provides the most reliable estimate of CO2 emissions (IPCC, 2000). New Zealand also uses the Tier 1 approach to estimate non-CO2 emissions from road transport as data is not available to calculate emissions using the Tier 2 approach. Emission factors for CO2 and non-CO2 gases for the various fuel types used in the road transportation subcategory can be found in Annex 2.

Railways

For this inventory submission, emissions from railways (including both liquid and solid fuels) are estimated for the whole time series using a Tier 1 approach. New Zealand-specific emission factors are used for estimating CO2 emissions and IPCC default emission factors are used for estimating CH4 and N2O emissions.

Navigation (domestic marine transport)

Emissions from the navigation category in New Zealand are estimated using a Tier 1 approach with New Zealand-specific emission factors for estimating CO2 emissions and IPCC default emission factors for CH4 and N2O.

There were no emissions from gas/diesel oil for 2007 as the sole fast ferry operator in New Zealand that used this fuel ceased operations in 2006.

Civil aviation

The New Zealand method for estimating emissions from the civil aviation category 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 LTO cycles (IPCC, 2000). The distinction between domestic and international flights was based on refuelling at the domestic and international terminals of New Zealand airports. New Zealand does not have the data to split the domestic and international components of fuel use for international flights with a domestic leg. This is because information on fuel use for civil aviation and navigation is only available from the oil companies rather than from the individual airlines or shipping companies.

Uncertainties and time-series consistency

Uncertainties in emission estimates from the transport category are relevant to the entire fuel combustion sector (refer Table 3.2.1).

Source-specific QA/QC and verification

In preparation of this inventory, data for CO2 emissions from the transport category underwent IPCC Tier 1 quality checks.

Source-specific recalculations

In the 2008 inventory submission, year-specific calorific values were applied to diesel and petrol activity data to improve accuracy. For this inventory submission, year-specific calorific values have been introduced for all liquid fuel types between 1990 and 2007.

3.2.4 Fuel combustion: other sectors (CRF 1A4)

Description

The other sectors category comprises emissions from fuels combusted in the commercial/institutional, residential, and agriculture, forestry and fisheries subcategories.

In 2007, fuel combustion of the other sectors category accounted for 2,766.6 Gg CO2-e (8.5 per cent) of the emissions from the energy sector. This is a decrease of 104.3 Gg CO2-e (3.6 per cent) below the 1990 value of 2,870.9 Gg CO2-e.

Emissions from the agricultural, forestry and fisheries subcategory were 1,277.3 Gg CO2-e (46.2 per cent) of the other sectors category in 2007. This is an increase of 171.9 Gg CO2-e (15.6 per cent) from the 1990 level of 1,105.4 Gg CO2-e.

Emissions from the commercial and institutional subcategory were 917.2 Gg CO2-e (33.2 per cent) of the other sectors category in 2007. This is a decrease of 244.6 Gg CO2-e (21.1 per cent) from the 1990 level of 1,161.8 Gg CO2-e.

Emissions from the residential subcategory were 572.1 Gg CO2-e (20.7 per cent) of the other sectors category in 2007. This is a decrease of 31.6 Gg CO2-e (5.2 per cent) from the 1990 level of 603.7 Gg CO2-e.

Methodological issues

Accurately partitioning energy use between categories is difficult. An example is allocating diesel consumption between the road transport and commercial/institutional subcategories. Some transport-related emissions, particularly from commercial enterprises, may be captured under the commercial/institutional subcategory. The Ministry of Economic Development is working on improving the allocation of diesel consumption within New Zealand. It identified an anomaly in the time series between 2005 and 2006 for diesel use for road transport and commercial use. An interpolation method was used to recalculate emissions. This recalculation resulted in a small reallocation of diesel between the road transport and commercial/institutional subcategories for 2005 and 2006.

Uncertainties and time-series consistency

Uncertainties in emission estimates for data from other sectors is relevant to the entire energy sector (refer Table 3.2.1).

Source-specific QA/QC and verification

There were no specific IPCC Tier 1 quality checks undertaken for this category as it was not identified as a key category. However, the data was checked by the Ministry of Economic Development as part of its quality control programme.

Source-specific recalculations

In previous inventory submissions, constant calorific values were used to convert tonnes (t) of fuel to petajoules (PJ) of fuel. For this inventory submission, year-specific calorific values have been introduced to improve the accuracy of the activity data between 1990 and 2007.

The sixth centralised expert review report in 2008 highlighted missing estimates for gaseous fuels used in the agriculture, forestry, and fisheries subcategory for the whole time series. For this inventory submission, gas consumption and emission estimates for the subcategory have been provided for the years 2000 to 2007. No data is available prior to 2000.

Source-specific planned improvements

During 2008, the Ministry of Economic Development investigated the allocation of liquid fuels, particularly diesel consumption between the road transport and commercial/ institutional subcategories. This work will continue in 2009.

3.3 Fugitive emissions from fuels (CRF 1B)

Fugitive emissions arise from the production, processing, transmission, storage and use of fossil fuels, and from non-productive combustion. This category is comprised of two subcategories: solid fuels and oil and natural gas.

In 2007, fugitive emissions from fuels accounted for 1,761.0 Gg CO2-e (5.4 per cent) of emissions from the energy sector. This is an increase of 530.0 Gg CO2-e (43.1 per cent) from the 1990 level of 1,231.0 Gg CO2-e.

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

Description

In 2007, fugitive emissions from the solid fuels subcategory produced 261.8 Gg CO2-e (14.9 per cent) of emissions from the fugitive emissions category. This is a decrease of 10.3 Gg CO2-e (3.8 per cent) from the 272.1 Gg CO2-e reported in 1990.

New Zealand’s fugitive emissions from the solid fuels subcategory are a by-product of coalmining operations. Methane is created during coal formation. The amount of CH4 released during coalmining is dependant on the coal rank and the depth of the coal seam. In 2007, 71.7 per cent of the CH4 from coalmining (including post-mining emissions) came from underground mining. This includes the emissions from post-under ground mining activities such as coal processing, transportation and use. There is no known flaring of CH4 at coalmines and CH4 is rarely captured for industrial uses. In 2007, New Zealand coal production was 4.8 million tonnes, a 17 per cent decrease from the 2006 production level of 5.8 million tonnes. This decrease was largely due to the response by New Zealand’s largest coal producer to a decline in demand for exported coal (Ministry of Economic Development, 2008b).

Methodological issues

The underground mining subcategory dominates fugitive emissions from coalmining. New Zealand focuses its efforts on accurately estimating emissions from this subcategory in accordance with good practice. A New Zealand-specific emission factor for underground mining of sub-bituminous coal is used to calculate CH4 emissions (Beamish and Vance, 1992). Emission factors for the other subcategories, for example, surface mining, are sourced from the revised 1996 IPCC guidelines (IPCC, 1996) as shown in Table 3.3.1.

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.

Uncertainties and time-series consistency

Uncertainties in fugitive emissions are relevant to the entire energy sector (refer Table 3.2.1).

Source-specific QA/QC and verification

There were no specific IPCC Tier 1 quality checks undertaken for this category as it was not identified as a key category. However, the data was checked by the Ministry of Economic Development as part of its quality control programme.

Source-specific recalculations

There were no recalculations for the fugitive emissions from fuels: solid fuels subcategory.

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

Description

In 2007, fugitive emissions from the oil and natural gas subcategory totalled 1,499.2 Gg CO2-e (85.1 per cent) of emissions from the fugitive emissions category. This is an increase of 540.3 Gg CO2-e (56.4 per cent) from 958.8 Gg CO2-e in 1990. Fugitive emissions from oil and gas operations (CO2) were identified as a key category (level and trend) in 2007.

For this inventory submission, emission estimates were reallocated to the flaring combined subcategory to more accurately reflect the fact these emissions are a combination of venting and flaring emissions from oil and gas.

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 the source are not technically due to flaring, they are included under this category because of data confidentiality concerns. The large increase in CO2 emissions for this source between 2003 and 2004 and between 2004 and 2005 is related to the drop in methanol production. Carbon dioxide previously sequestered during this separation process is now being released as fugitive emissions from venting at the Kapuni gas treatment plant.

Carbon dioxide is also produced when natural gas is flared at the wellheads of other fields. The combustion efficiency of flaring is 95–99 per cent, leaving some fugitive emissions as a result of incomplete combustion. There was a 19 per cent increase in emissions from processing and flaring between 2006 and 2007, in part due to the flaring at the offshore Tui gas field (Ministry of Economic Development, 2008a).

Fugitive emissions also occur in transmission and distribution of the natural gas although they are relatively minor in comparison with those from venting and flaring.

This subcategory also includes emissions from geothermal operations. Some of the energy from geothermal fields is transformed into electricity and the emissions are reported under the fugitive emissions from fuels subcategory. Emissions from geothermal electricity generation are reported in the fugitive emissions category 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 have been excluded from the inventory. In 2007, emissions from geothermal operations were 365.9 Gg CO2-e, a decrease of 66.6 Gg CO2-e (15.4 per cent) since the 1990 level of 432.5 Gg CO2-e. Carbon dioxide fugitive emissions from geothermal operations were identified as a key category (trend) in 2007.

Methodological issues

Venting and flaring from oil and gas production

Data on the amount of CO2 released through flaring is either supplied directly by the gas field operators or calculated from the supplied energy data using emission factors from Baines (1993). Vector Ltd, New Zealand’s gas transmission company, supplies estimates of CO2 released during the processing of the natural gas.

Gas transmission and distribution

Carbon dioxide and CH4 emissions from gas leakage occur almost exclusively from low-pressure distribution pipelines rather than from high-pressure transmission pipelines. Vector Ltd provides the estimates for these emissions from its high-pressure transmission system. In 2007, these emissions were 15 t of CO2 and 120 t of CH4 (Ministry of Economic Development, 2008a). In consultation with the Gas Association of New Zealand, the Ministry of Economic Development estimates that 3.5 per cent of the gas entering the distribution system is unaccounted for and that half of this (1.75 per cent) is lost through leakage. 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 the oil-transport and oil-refining/storage subcategories are calculated using an IPCC Tier 1 approach. For the oil-transport subcategory, the fuel activity data is the total New Zealand production of crude oil reported in the Energy Data File (Ministry of Economic Development, 2008b), and the CH4 emission factor is the mid-point of the IPCC default value range (0.745 t CH4/PJ). Emissions from oil-refining/storage are based on oil intake at New Zealand’s single oil refinery. The CH4 emission factor for refining is the same as that for transportation. The emission factor for storage is 0.14 t CH4/PJ (a New Zealand-specific emission factor). The combined emissions factor for oil-refining/storage is 0.885 t CH4/PJ, derived by adding the emissions’ factors for refining and storage together.

Geothermal

Estimates of CO2 and CH4 for the geothermal subcategory are obtained directly from the geothermal field operators. Analyses of the gases emitted from the geothermal fields occur on a routine basis.

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 CO2 and CH4 dissolved in the geothermal fluid are released along with steam.

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.

Source-specific QA/QC and verification

There were no specific IPCC Tier 1 quality checks undertaken for this category as it was not identified as a key category. However, the data was checked by the Ministry of Economic Development as part of its quality control programme.

Source-specific recalculations

As no specific data was available to report emissions from venting and flaring activities for oil and gas exploration separately, estimates were reallocated to the combined subcategory (CRF 1B2C23).

Fugitive emissions from geothermal electricity generation have now included improved information on emissions from the Tarawera plant for the whole time series.

3.4 Other information

3.4.1 Comparison of sectoral approach with reference approach

The reference approach calculation 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 was performed for all years from 1990 to 2007.

The majority of the CO2 emission factors for the reference approach are New Zealand specific. The natural gas emission factors used are estimated based on a production-derived, weighted average of emission factors from all gas production fields. This approach differs from previous inventory submissions, where the emissions’ factors were estimated from the sectoral approach analysis by dividing aggregated CO2 emissions (including carbon later stored) by aggregate energy use.

The activity data for the reference approach is 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 this figure, energy use for transformation activities is subtracted to get apparent consumption. The activity data used for the sectoral approach is referred to as “observed” energy-use figures. These are based on surveys and questionnaires administered by Statistics New Zealand on behalf of the Ministry of Economic Development or by the Ministry itself. The differences between “calculated” and “observed” figures are reported as statistical differences in the energy-balance tables contained in the Energy Data File (Ministry of Economic Development, 2008b).

Comparison of the reference approach and sectoral approach in 2007 shows the sectoral total of CO2 emissions is 0.8 per cent less than the reference total.

The difference in CO2 emissions from the reference approach and the sectoral approach in solid fuel combustion is largely due to the stock change category in the reference approach. As mentioned earlier, Statistics New Zealand collects quarterly coal sales information on behalf of the Ministry of Economic Development, and the item “stock change” was not clearly defined. The Ministry of Economic Development will investigate this further once the conduction of the coal sales survey activity is taken over by the Ministry of Economic Development in the second half of 2009.

The energy use and calculated emissions for the major fuel categories are not directly comparable between the reference and sectoral approaches. First, the reference approach counts non-energy sector use of fuels such as gas in ammonia production, coal in steel production and bitumen use, whereas 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 combustion of refinery gas is included under gaseous fuels consumption in the sectoral approach, but is not in the reference approach. This is because refinery gas is a by-product of the refining process derived from crude oil inputs. Consequently, emissions from the combustion of refinery gas have been counted against crude oil in the reference approach.

Figure 3.4.1 The percentage difference between the reference and sectoral approach for New Zealand’s inventory

Figure 3.4.1 The percentage difference between the reference and sectoral approach for New Zealand's inventory

Year Difference between New Zealand’s reference and sectoral approach (%)
1990 0.0
1991 -0.8
1992 -4.2
1993 -2.8
1994 -1.6
1995 -2.0
1996 -2.6
1997 2.8
1998 2.3
1999 7.3
2000 2.3
2001 2.9
2002 0.2
2003 0.4
2004 2.9
2005 3.0
2006 -0.2
2007 0.8

3.4.2 International bunker fuels

The data on fuel use by international transportation comes from the Energy Data File (Ministry of Economic Development, 2008b). This uses information from oil company survey returns provided to the Ministry for Economic Development. Data on fuel use by domestic transport is sourced from the Deliveries of Petroleum Fuels by Industry survey conducted by Statistics New Zealand.

3.4.3 Feedstock and non-energy use of fuels

The fuels supplied to industrial companies are used both as fuel and as feedstock. Emissions are calculated using the total fuel supplied to each company (this includes fuel used as feedstock), and by estimating the difference between the carbon content of the fuels used and the carbon sequestered in the final output (this is based on industry production and chemical composition of the products). This difference is assumed to be the amount of carbon emitted as CO2.

3.4.4 Carbon dioxide capture from flue gases and subsequent CO2 storage

There was no CO2 capture from flue gases and subsequent CO2 storage occurring in New Zealand between 1990 and 2007.

3.4.5 Country-specific issues

Energy sector reporting shows very few areas of divergence from the IPCC guidelines and good practice (IPCC 1996; 2000). The differences that exist are listed below:

  • a detailed subdivision of the manufacturing and construction category as set out in the IPCC guidelines is 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. Carbon dioxide emissions from this coal have been 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

  • MS Excel worksheets containing the activity data for the sectoral approach are available for download with this report from the Ministry for the Environment’s website (here). The sectoral activity data excludes energy sources containing carbon that is later stored in manufactured products, specifically methanol. Consequently, subsequent subtraction of emissions is not needed to account for this carbon sequestration. A worksheet to cover fugitive CO2 and CH4 emissions from geothermal electricity and heat generation plants has also been included.

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 SO2 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

The New Zealand Energy Data File is an annual publication from the Ministry of Economic Development. It covers energy statistics including supply and demand by fuel types, energy balance tables, pricing information and international comparisons. An electronic copy of this report is available online at www.med.govt.nz/energy/info.

A table providing an overview of the 2007 energy supply and demand balance for New Zealand is included in Annex 2.