View all publications

Chapter 3: Energy

3.1 Sector overview

The energy sector produced 33,838.8 Gg carbon dioxide equivalent (CO2-e) in 2008, representing 45.3 per cent of New Zealand’s total greenhouse gas emissions. Emissions from the energy sector were 46.9 per cent (10,796.1 Gg CO2-e) above the 1990 level of 23,042.7 Gg CO2-e (Figure 3.1.1). The sources contributing most to this increase were emissions from the public electricity and heat production subcategory, an increase of 4,217.4 Gg CO2-e (122.4 per cent), and the road transportation subcategory, an increase of 5,227.1 Gg CO2-e (68.5 per cent). Emissions from the manufacture of solid fuels and the other energy industries subcategory have decreased by 1,429.7 Gg CO2-e (81.3 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 in 2008.

Changes in emissions between 2007 and 2008

Between 2007 and 2008, emissions from the energy sector increased by 1,185.2 Gg CO2‑e (3.6 per cent). This is primarily due to a 987.3 Gg CO2‑e (14.8 per cent) increase in emissions from public electricity and heat production due to low hydro inflows for 2008. Public electricity and heat production emissions also rose in 2008 due to the increased use of coal in electricity generation.

An increase of 368.2 Gg CO2‑e (6.9 per cent) between 2007 and 2008, in the manufacturing industries and construction category also contributed to the increase in energy emissions. However, these increases were in part offset by a 623.7 Gg CO2‑e (4.2 per cent) decrease in the transport category due to the high petrol and diesel prices in 2008 and the beginning of the global recession.

Figure 3.1.1 New Zealand’s energy sector emissions from 1990 to 2008


Figure 3.1.1 New Zealand’s energy sector emissions from 1990 to 2008

  Gg CO2 equivalent
1990 23,042.7
1991 22996.9
1992 25056.8
1993 24209.1
1994 24088.3
1995 23736.7
1996 24402.4
1997 26639.0
1998 25128.6
1999 26482.7
2000 28825.5
2001 30749.0
2002 30994.6
2003 32765.8
2004 32285.1
2005 33731.1
2006 34106.8
2007 32653.6
2008 33838.8

Energy flows

This inventory submission includes energy flow diagrams (Annex 2). The purpose of these diagrams is to provide a snapshot of the flow of various fuels from the suppliers to the end users within New Zealand for the 2008 calendar year and to provide greater transparency of the energy sector.

3.2 Background information

3.2.1 Comparison of sectoral approach with reference approach

Greenhouse gas emissions from the energy sector are calculated using a detailed sectoral approach. For verification, New Zealand has also applied a reference approach to estimate CO2 emissions from fuel combustion for the time series (UNFCCC, 2006). This verifies that all carbon in fuels is accounted for.

The reference approach applies a country’s energy supply data to calculate the CO2 emissions from the combustion of fossil fuels. The apparent consumption in the reference approach is derived by using production, import and export data. This information is included as a check for combustion-related emissions (IPCC, 2000).

The majority of the CO2 emission factors for the reference approach are New Zealand-specific. Most emissions factors for liquid fuels are based on annual carbon content and the gross calorific value data provided by New Zealand’s sole refinery, the New Zealand Refining Company. Where this data is not available, an Intergovernmental Panel on Climate Change (IPCC) default is used. The natural gas emission factor is based on a production-derived, weighted average of emission factors from all gas production fields. The emission factors for solid fuels are sourced from the New Zealand Energy Information Handbook (Eng et al, 2008).

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 value, 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 the Ministry of Economic Development. The differences between “calculated” and “observed” figures are reported as statistical differences in the energy-balance tables contained in the New Zealand Energy Data File (Ministry of Economic Development, 2009).

Comparison of the two approaches in 2008 shows the sectoral total of CO2 emissions is 1 per cent less than the reference total (Figure 3.2.1).

The energy-use and calculated emissions for the major fuel categories are not directly comparable between the reference and sectoral approaches. This is, first, because the reference approach includes the use of the fuels when fuel combustion for energy is not the primary purpose (ie, gas used as a feedstock in methanol production and coal used in steel production and bitumen use), while the sectoral approach does not. To reconcile this difference, the carbon in these fuels is included under stored carbon and excluded from the reference approach.

Secondly, combustion of refinery gas is included under gaseous fuels consumption in the sectoral approach and under liquid fuels consumption 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 included under crude oil in the reference approach.

The Ministry of Economic Development will investigate the large differences between the reference and sectoral approaches in earlier years, particularly from the mid-1990s to the year 2000, for future inventory submissions. This will involve a review of the historical data and statistical differences in the supply and demand tables.

From previous inventory submissions the expert review team suggested more evidence was required to provide how the crude oil emission factor used in the reference approach was derived. After discussions with the New Zealand Refinery Company it was agreed that New Zealand should be using the IPCC default emission of 19.05 t C/TJ for the whole time series. In the previous inventory submission, the emission factor for crude oil was 17.8 t C/TJ.

Some notation keys for the reference approach category have also been updated as they were previously incorrect.

Figure 3.2.1 Difference between the reference and sectoral approach for New Zealand’s energy sector


Figure 3.2.1 Difference between the reference and sectoral approach for New Zealand’s energy sector

Year Difference between New Zealand’s reference and sectoral approach (%)
1990 2.436654063
1991 2.747890146
1992 -2.01314818
1993 -1.43514413
1994 3.393192435
1995 3.252159953
1996 5.275518856
1997 10.48165575
1998 13.64372766
1999 14.22072204
2000 2.763764103
2001 3.141682798
2002 -0.460478627
2003 0.654049911
2004 1.232141464
2005 2.575593573
2006 -0.04572216
2007 1.357570079
2008 0.989116632

3.2.2 International bunker fuels

The data on fuel-use by international transportation comes from the New Zealand Energy Data File (Ministry of Economic Development, 2009). This report uses information from oil company monthly survey returns provided to the Ministry for Economic Development.

Data on fuel-use by domestic transport is sourced from the quarterly Delivery of Petroleum Fuels by IndustrySurvey conducted by the Ministry of Economic Development. Due to further disaggregation of the marine liquid fuels data, this inventory submission has included the gasoline used in the marine international bunkers category for the first time (refer to the common reporting format Table 1.C1.B).

3.2.3 Feedstock and non-energy use of fuels

For some industrial companies, the fuels supplied are used both as a fuel and as a feedstock. In these instances, emissions were calculated by taking the fraction of carbon stored or sequestered in the final product (this is based on industry production and chemical composition of the products) and subtracting this from the total fuel supplied. This difference is assumed to be the amount of carbon emitted as CO2 and is reported in the common reporting format Table 1.A(d).

3.2.4 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 2008.

3.2.5 Country-specific issues

Reporting of the energy sector has few areas of divergence from the IPCC guidelines (IPCC, 1996 and IPCC, 2000). The differences that exist are listed below.

  • A detailed subdivision of the manufacturing and construction category as set out in the 1996 IPCC guidelines is not available before 2000. This is due to historical needs and practices of energy statistics collection in New Zealand. The Ministry of Economic Development is investigating the extrapolation of data back to 1990.
  • 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 in the sector approach (IPCC, 2000) and have been netted out of the energy reference approach using the “estimating the carbon stored in products” table (common reporting format Table 1.A(d)).
  • 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.

3.2.6 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.

3.2.7 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/edf.

Table A2.5 (Annex 2) provides an overview of the 2008 energy supply and demand balance for New Zealand. This supply and demand balance table is slightly different from that published previously in the New Zealand Energy Data File (Ministry of Economic Development, 2009). This is due to improvements made to the supply and demand balance post-publication.

3.3 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 3.3.1). These subcategories use common activity data sources and emission factors. The common reporting format 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.

Information about methodologies, emission factors, uncertainty, and quality control and assurance relevant to each of the subcategories is discussed below.

Figure 3.3.1 Change in New Zealand’s emissions from the fuel combustion categories from 1990 to 2008


Figure 3.3.1 Change in New Zealand’s emissions from the fuel combustion categories from 1990 to 2008

  1990 Gg CO2 equivalent 2008 Gg CO2 equivalent
Energy industries 5,977.3 8,900.7
Manufacturing industries and construction 4,228.1 5,706.8
Transport 8,748.7 14,273.9
Other sectors 2,914.0 2,898.2

Note: The other sectors category includes fuel combustion emissions from the commercial, institutional, agricultural, forestry, fisheries and residential sectors.

Methodological issues

Energy emissions are compiled using the Ministry of Economic Development’s energy database along with relevant New Zealand-specific emission factors. These greenhouse gas emissions are calculated by multiplying the emission factor of specific fuels by the relevant activity data.

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 IPCC Tier 1 approach, as data is not available for every individual energy facility.

Activity data – liquid fuels

The Ministry of Economic Development conducted the Delivery of Petroleum Fuels by Industry Survey in 2009. Before this, the survey was conducted by Statistics New Zealand. The survey includes liquid fuels sales data collected from the four major oil companies and an independent oil company. The purpose of the survey 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 the Ministry of Economic Development with the volume of petroleum fuels delivered to resellers, industry, commercial and residential sectors. The volume of petroleum fuels is currently collected in litres (in metric tonnes prior to 2009). Year-specific calorific values are used for all liquid fuels reflecting changes in liquid fuel properties over time.

Emissions from fuel sold for use in international transport (eg, international bunker fuels) are reported separately as a memo item as required (UNFCCC, 2006).

The following fuels contribute to emissions from the transport category: compressed natural gas, premium and regular petrol, diesel, fuel oil (heavy and light), aviation fuels, liquefied petroleum gas and coal. In this submission, emissions from transport are calculated as those from the transport industry (ie, commercial enterprises engaged in providing transport services) including those from petroleum fuels sold via resellers (eg, service stations). This is likely to result in an overstatement of emissions attributed to the transport category, as resellers also on-sell petroleum fuels for non-transport uses (eg, diesel sold for powering stationary farm machinery). However, there is insufficient information available to estimate and reallocate the fuel on-sold for non-transport uses. Emissions attributed to the other sectors category will also include some transport-related emissions (eg, emissions from the operation of a commercial vehicle fleet). The Ministry of Economic Development has started working on an annual survey of independent distributor companies to improve the allocation of petroleum sales to the appropriate sectors. This improvement will be implemented in future inventory submissions.

Activity data has been revised for certain fuels and categories due to improvements in the datasets from the Monthly Oil Submission and the Delivery of Petroleum Fuels by Industry Survey. This has resulted in recalculations for a large number of categories in this inventory submission.

Activity data – solid fuels

The Ministry of Economic Development now conducts the New Zealand Quarterly Statistical Return of Coal Production and Sales, previously conducted by Statistics New Zealand. The survey covers coal produced and sold by coal producers in New Zealand. The three grades of coal estimated are bituminous, sub-bituminous and lignite.

The Quarterly Statistical Return of Coal Production and Sales splits coal sold into over 20 industries using the Australian and New Zealand Standard Industry Classification (2006). Prior to 2009, when Statistics New Zealand ran the survey, coal sold was attributed to seven sectors. Between 1990 and 1995, the sectoral shares of coal use 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 to the consumption of coal that are received directly from the companies include: coal used for iron and steel, residential household and the public electricity and heat production subcategories.

Sectoral shares of coal were calculated by the following:

  • the four calendar year quarters of coal sales data from the Quarterly Statistical Return of Coal Production and Sales was summed
  • coal exports, coal used by the residential sector, coal used for iron and steel production, and coal used for public electricity and heat production were subtracted. CRL Energy’s annual coal tonnage for each sector was divided by the total (excluding exports, steel, electricity and residential coal use), to provide sectoral shares of coal use for 1990 and 1995
  • sectoral shares between 1990 and 1995 were interpolated
  • the year-specific calorific values for the different grades of coal were provided by CRL Energy Ltd between 1995 and 2008
  • 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. To achieve better alignment between the reference and sectoral approaches peat/coke coal is included under the bituminous grade.
Activity data – gaseous fuels

The Ministry of Economic Development receives activity data on gaseous fuels from a variety of sources. Individual gas field operators provide information on the amount of gas extracted, vented, flared and own use 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 users 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 industrial, commercial and residential gas users.

Activity data – biomass

Activity data for the use of biomass comes from a number of different sources. Electricity and co-generation data is received by the Ministry of Economic Development from electricity generators. Commercial biomass data is provided by the Cogeneration Association of New Zealand. Residential biomass data is estimated based on census results and data from the Building Research Association of New Zealand (2002). Finally, industrial biomass data is received by the Ministry of Economic Development from companies involved with combusting wood residues to provide process heat in the wood processing industry (ie, kiln drying).

Emission factors

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

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 IPCC (1996) are converted from net calorific value to gross calorific value.

Emission factors – liquid fuels

The CO2 emission factors for oil products are from the New Zealand Refining Company data, import data from industry and from Eng et al (2008). 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.

The liquid fuel emission factors are calculated on an annual basis. This inventory submission includes further improvements in liquid fuel emission factors because of improved New Zealand Refining Company data on carbon content and calorific values becoming available. Improvements on emission factors have also been made when the fuel specifications of liquid fuels change, such as lower sulphur content of diesel oil being introduced 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 (Eng et al, 2008). This inventory submission has used 91.20 kt CO2/PJ as the emission factor for sub-bituminous coal. This new emission factor is based on the assumption that applying the overall sub-bituminous value for the public electricity and heat production subcategory is consistent with other coal burning activities in New Zealand. This updated emission factor is included for the whole time series for the public electricity and heat production subcategory.

Emission factors – gaseous fuels

The gaseous fuels emission factor is the calculated average for all of the gas production fields (Ministry of Economic Development, 2009). The emission factor takes into account gas compositional data from all gas fields. This method provides increased accuracy because the decline in production of both Maui and Kapuni gas fields has been replaced by other new gas fields (eg, Pohukura) coming on stream.

The Kapuni gas field has 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 at the Kapuni Gas Treatment Plant. Consequently, separate emission factors were used to calculate emissions from Kapuni treated and un-treated gas due to the difference in carbon content (refer to Annex 2). The emissions from this removal of CO2 are included under the manufacture of solid fuels and other energy industries category (section 3.3.2).

Emission factors – biomass

The emission factors for wood combustion are calculated from the IPCC (1996) default emission factors. This assumes that the net calorific value is 5 per cent less than the gross calorific value (IPCC, 1996). Carbon dioxide emissions from wood used for energy production are reported as a memo item and are not included in the estimate of New Zealand’s total greenhouse gas emissions (UNFCCC, 2006).

Sector-wide planned improvements

All source-specific planned improvements will be discussed in their corresponding sections. However, the Ministry of Economic Development will collect further information on calorific values for imported coal and coal produced within New Zealand.

Uncertainties and time-series consistency

Uncertainty in greenhouse gas emissions from fuel combustion varies depending on the gas (Table 3.3.1). 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 96.4 per cent of energy sector emissions in 2008.

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 uncertainty of all the default emission factors has not been quantified in the IPCC guidelines (IPCC, 1996). The uncertainties proposed in Table 3.3.1 are best estimates derived for New Zealand conditions (Ministry of Economic Development, 2006).

Table 3.3.1 General uncertainty 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
NMVOCs ±50

3.3.1 Fuel combustion: energy industries (CRF 1A1)

Description

This category comprises emissions from fossil fuels burnt in stationary combustion. It includes combustion for public electricity and heat production, petroleum refining and the manufacture of solid fuels and other energy industries. The latter subcategory includes estimates for natural gas in oil and gas extraction and from natural gas in synthetic petrol production. The excess CO2 removed from Kapuni gas at the Kapuni Gas Treatment Plant has also been reported under the manufacture of solid fuels and other energy industries subcategory because of confidentiality concerns.

In 2008, emissions in the energy industries category totalled 8,900.7 Gg CO2-e (26.3 per cent) of the energy sector. Emissions from energy industries have increased 2,923.4 Gg CO2-e (48.9 per cent) since the 1990 level of 5,977.3 Gg CO2-e. The public electricity and heat production subcategory accounted for 7,661.7 Gg CO2-e (86.1 per cent) of the emissions from the energy industries category in 2008. This is an increase of 4,217.4 Gg CO2-e (122.4 per cent) from the 1990 level of 3,444.3 Gg CO2-e.

Between 2007 and 2008, there was an increase of 987.3 Gg CO2‑e (14.8 per cent) in emissions from public electricity and heat production. This increase is largely due to low hydro inflows for 2008 (ie, 2008 was a dry year). Subsequently, there was an increased reliance on thermal electricity generation. Public electricity and heat production emissions also rose in 2008 due to an increased use of coal compared with gas in the production of thermal electricity.

New Zealand’s electricity generation is dominated by hydroelectric generation. For the 2008 calendar year, hydro generation provided 52 per cent of New Zealand’s electricity generation. A further 13 per cent came from other renewable sources (such as geothermal, wind and biomass) and waste heat sources. The remaining 35 per cent was provided by fossil fuel thermal generation plants using oil, gas and coal (Ministry of Economic Development, 2009).

Greenhouse gas emissions from the public electricity and heat production subcategory show large inter-annual fluctuations between 1990–2008. These fluctuations can also be seen over the time series for New Zealand’s total emissions. The fluctuations are influenced by the close inverse relationship between thermal and hydro generation (Figure 3.3.2). In a dry year, where low rainfall affects the majority of New Zealand’s hydroelectric lake levels, the shortfall is made up by thermal electricity generation. New Zealand’s hydro resources have limited storage capacity, with around 10 per cent of New Zealand’s annual demand of reservoir storage (Electricity Technical Advisory Group and the Ministry of Economic Development, 2009). Electricity generation in a “normal” hydro year requires lower gas and coal use, while a “dry” hydro year requires higher gas and coal use.

Figure 3.3.2 New Zealand’s hydroelectric and thermal generation from 1990 to 2008 (Ministry of Economic Development, 2009)

Figure 3.3.2 New Zealand’s hydroelectric and thermal generation from 1990 to 2008 (Ministry of Economic Development, 2009)

  Hydro-electric (GWh) Thermal (GWh)
1990 22,953 6,114
1991 22,666 7,147
1992 20,882 8,474
1993 23,258 7,403
1994 25,579 5,905
1995 27,259 5,413
1996 25,921 7,075
1997 23,026 10,530
1998 25,066 8,324
1999 22,690 10,763
2000 24,191 10,475
2001 21,464 13,599
2002 24,624 11,578
2003 23,387 12,956
2004 26,660 11,169
2005 23,094 14,347
2006 23,337 14,472
2007 23,404 14,077
2008 22,091 14,626

Note: This figure does not include generation from other renewable sources of electricity including wind, biomass, waste heat and geothermal.

Methodological issues

Public electricity and heat production

All thermal electricity generators provide figures for the amount of coal, gas and oil used for electricity generation 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) (Ministry of Economic Development, 2009). 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 IPCC (1996) definition of public electricity and heat production, 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, while emissions from other co‑generation plants are included within the manufacturing industries and construction category (section 3.2.2). A Tier 2 method is used to calculate emissions for this co-generation plant. This uses activity data from the Ministry of Economic Development’s Monthly Survey of Electricity Generation supplemented by the Ministry of Economic Development’s annual statistical returns for electricity generators and the weighted average gas emission factor.

Petroleum refining

The New Zealand Refinery Company provides annual activity data and emission factors of each type of fuel being consumed at the site. The fuel-type specific emission factors were adopted under the Government’s Projects to Reduce Emissions in 2003 (Ministry for the Environment, 2009). As no data is available concerning non-CO2 emissions from the refinery, the IPCC (1996) default emission factors for industrial boilers have been applied.

Manufacture of solid fuels and other energy industries

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 Methanex New Zealand while the plant was in operation (production of synthetic petrol ceased in 1997). A Tier 2 methodology was used to estimate emissions based on the annual weighted average gas emission factor.

The low implied emission factors for the manufacture 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 and activity data estimates for this category are relevant to the entire fuel combustion sector (refer to Table 3.3.1).

Source-specific QA/QC and verification

In preparation of this inventory the energy industries category underwent Tier 1 quality-assurance and quality-control checks.

Source-specific recalculations

Gaseous fuels activity data for the public electricity and heat production subcategory has now been replaced by annual data rather than quarterly data. The annual data is more accurate because it is subject to better quality-assurance and quality-control checks and verification methods carried out by both electricity suppliers and the Ministry of Economic Development. Pre-1996 monthly activity data has not changed because it came directly from the Electricity Corporation of New Zealand (a New Zealand state-owned enterprise prior to the deregulation of the entire New Zealand electricity market in 1996), although there is no visible step change in the activity data.

Biomass activity data for the public electricity and heat production subcategory is now reported back to 1990, as new electricity and co-generation data became available to the Ministry of Economic Development from electricity generator returns for the years 1990–1993.

The accuracy of gaseous fuels activity data for the manufacture of solid fuels and other energy industries subcategory has been revised because of improvements in data collection methods. This data was previously manually entered and contained many errors. This has now been corrected and quality-assurance and control procedures put in place.

There have been small activity data revisions in some categories due to revisions in liquid, solid and gaseous fuels data sources.

The emission factors for liquid fuels and gaseous fuels have been improved (refer to section 3.3).

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

Description

This category comprises emissions from fossil fuels burnt in iron and steel, other non-ferrous metals, chemicals, pulp, paper and print, food processing, beverages and tobacco, and other uses. Emissions from co-generation plants that do not meet the definition of co-generation as provided in the revised 1996 IPCC guidelines (IPCC, 1996) are included in this category.

Emissions from methanol production would normally be reported in the industrial processes sector as the emissions are from the chemical transformation of materials and not from the combustion of fuel. However, emissions from methanol production are reported under the manufacturing industries and construction subcategory for all years because of confidentiality concerns.

In 2008, emissions from the manufacturing industries and construction subcategory accounted for 5,706.8 Gg CO2-e (16.9 per cent) emissions from the energy sector. Emissions were 1,478.6 Gg CO2-e (35.0 per cent) above the 1990 level of 4,228.1 Gg CO2‑e. A decline in methanol production between 2003 and 2004 caused a significant reduction in emissions from this category. Methanol production is the largest source of emissions in the chemical subcategory.

Methodological issues

Iron and steel

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. The majority of the coal is used in the direct reduction process to remove oxygen from ironsand. However, all emissions from the use of coal are included in the industrial processes sector because the primary purpose of the coal is to produce iron (IPCC, 2000). A small amount of gas is used in the production of iron and steel to provide energy for the process and is reported in the energy sector.

Chemicals

The chemicals subcategory includes estimates from the following sub-industries:

  • industrial gases and synthetic resin
  • organic industrial chemicals
  • inorganic industrial chemicals, other chemical production, rubber and plastic products.

In addition, estimates for methanol production are also included in the chemicals subcategory because of confidentiality concerns. The activity data for methanol production is supplied directly by Methanex New Zealand. Until 2004, methanol was produced at two plants by Methanex New Zealand. In November 2004, production at the Motunui plant was halted and the plant re-opened in late 2008. Methanex New Zealand exports the majority of this methanol.

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 per cent carbon by weight.
  • Methanol is 37.5 per cent carbon by weight.
  • CO2 emissions factor for Maui gas is 52.37 kt/PJ (2008) (refer Annex 2).
  • CO2 emissions factor for Kapuni low temperature separator gas is 84.10 kt/PJ (2008) (refer Annex 2).
  • CO2 weighted average emissions factor for distributed gas is 53.59 (2008) (refer Annex 2).

The resulting calculations are:

Weight of carbon in gas to Methanex = [(PJ Maui)*52.37 + (PJ Kapuni)*84.10 + (PJ distributed)*53.59] *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 Methanex) – (weight of carbon sequestered)] *44/12 kilotonnes.

The major non-fuel related emissions from the methanol process are CH4 and NMVOCs.

As mentioned under section 3.2.5, disaggregated data by industry type is unavailable pre-2000. Therefore, activity data and related emissions are reported as aggregate values under the ‘other’ subcategory.

Uncertainties and time-series consistency

Uncertainties in emission and activity data estimates are those relevant to the entire energy sector (Table 3.3.1 and Annex 2).

Source-specific QA/QC and verification

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

Source-specific recalculations

The data reported in this category has been further disaggregated. Gaseous fuels activity data is now reported for all subcategories for 2000 onwards. Data prior to 2000 is not reported because the Ministry of Economic Development’s Gas Retailers and Wholesalers Survey only began in 2000.

Liquid fuels data is also now reported for the food processing, beverages and tobacco subcategory.

Gaseous fuels activity data for co-generation has been reported back to 1990 resulting in recalculations to the ‘other’ subcategory. Previously, this data was only available back to 1994. The data has become available based on a collaboration with Statistics New Zealand and the Electricity Commission and has greatly improved the accuracy of the published data.

Biomass activity data for co-generation is now received by the Ministry of Economic Development on a quarterly basis from companies involved with combusting wood residues to provide process heat in the wood processing industry (ie, kiln drying). This has resulted in recalculations to the ‘other’ subcategory. Previously, this data was estimated based on plant capacity.

There have been small activity data revisions in some categories due to revisions in liquid, solid and gaseous fuels data sources.

The emission factors for liquid fuels and gaseous fuels have been improved (refer to section 3.3).

Source-specific planned improvements

The Ministry of Economic Development will investigate the extrapolation of gaseous fuels data back to 1990 for the manufacturing industries and construction category for future inventory submissions.

The Ministry of Economic Development is reviewing emission factors used for estimating non-CO2 emissions for methanol production.

3.3.3 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 as memo items and are not included in New Zealand’s total emissions.

In 2008, the transport category was responsible for 14,273.9 Gg CO2-e (42.2 per cent) of emissions from the energy sector, or 19.2 per cent of total emissions. Emissions increased 5,525.2 Gg CO2-e (63.2 per cent) from the 8,748.7 Gg CO2-e emitted in 1990. The transport emissions profile in 2008 was dominated by emissions from the road transportation subcategory. In 2008, road transport accounted for 12,860.8 Gg CO2-e (90.1 per cent) of total transport emissions. This was an increase of 5,227.1 Gg CO2-e (68.5 per cent) from the 1990 level of 7,633.6 Gg CO2-e. Carbon dioxide emissions from road transport were identified as a key category (trend and level) in 2008. Carbon dioxide emissions from aviation were also identified as a key category (level) in 2008.

Between 2007 and 2008, emissions from transport decreased by 623.7 Gg CO2‑e (4.2 per cent). This was due to the high petrol and diesel prices in 2008 and the beginning of the global recession.

Methodological issues

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

Activity data on the consumption of fuel by the transport sector was sourced from the Delivery of Petroleum Fuels by Industry Survey conducted by the Ministry of Economic Development. Liquefied petroleum gas and compressed natural gas consumption figures are reported in the New Zealand Energy Data File (Ministry of Economic Development, 2009).

Road transportation

The IPCC (2000) Tier 1 approach was used to calculate CO2 and non-CO2 emissions from road transportation. New Zealand-specific emission factors have been used to estimate CO2, while because of insufficient information, default emission factors have been used to estimate non-CO2 emissions. The 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

Emissions from the railways subcategory (including both liquid and solid fuels) were estimated using a Tier 1 approach (IPCC, 1996). New Zealand-specific emission factors were used to estimate CO2 emissions and, because of insufficient data, the IPCC default emission factors were used to estimate CH4 and N2O emissions. The emission factors for CO2 and non-CO2 gases for the various fuel types used in the railway subcategory can be found in Annex 2.

Navigation (domestic marine transport)

Emissions from the navigation subcategory in New Zealand were estimated using a Tier 1 approach (IPCC, 1996). New Zealand-specific emission factors have been used to estimate CO2 emissions and, because of insufficient data, the IPCC 1996 default emission factors have been used to estimate CH4 and N2O emissions.

Civil aviation

A Tier 1 approach (IPCC, 1996) that does not use landing and take-off cycles has been used to estimate emissions from the civil aviation subcategory. There is no gain in inventory quality by moving from a Tier 1 to a Tier 2 approach using landing and take-off cycles (IPCC, 2000). The distinction between domestic and international flights is 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 (Table 3.3.1).

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

There have been small activity data revisions in some categories due to revisions in liquid, solid and gaseous fuels data sources.

The emission factors for liquid fuels and gaseous fuels have been improved (refer to section 3.3).

Source-specific planned improvements

In 2010, the Ministry of Economic Development will continue to work with the Ministry of Transport on developing a Tier 2 methodology for estimating road transportation emissions. The Ministry of Economic Development will also continue to focus on international bunker issues, including the improvement of both marine and aviation fuel data.

3.3.4 Fuel combustion: other sectors (CRF 1A4)

Description

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

In 2008, fuel combustion of the other sectors category accounted for 2,898.2 Gg CO2-e (8.6 per cent) of the emissions from the energy sector. This is a decrease of 15.8 Gg CO2-e (0.5 per cent) below the 1990 value of 2,914.0 Gg CO2-e.

Emissions from the agricultural, forestry and fisheries subcategory were 1,243.4 Gg CO2‑e (42.9 per cent) of the other sectors category in 2008. This is an increase of 134.4 Gg CO2-e (12.1 per cent) from the 1990 level of 1,109.0 Gg CO2-e.

Emissions from the commercial and institutional subcategory were 1,122.1 Gg CO2-e (38.7 per cent) of the other sectors category in 2008. This is a decrease of 40.8 Gg CO2‑e (3.5 per cent) from the 1990 level of 1,162.9 Gg CO2‑e.

Emissions from the residential subcategory were 532.8 Gg CO2-e (18.4 per cent) of the other sectors category in 2008. This is a decrease of 109.4 Gg CO2-e (17.0 per cent) from the 1990 level of 642.2 Gg CO2‑e.

Methodological issues

Accurately partitioning energy use between categories is difficult. An example is the allocating of diesel consumption between the road transport and commercial and institutional subcategories. As mentioned under section 3.3, some transport-related emissions, particularly from commercial enterprises, may be captured under the commercial and institutional subcategory. The Ministry of Economic Development has started working on an annual survey of independent distributor companies to correctly allocate their petroleum sales to the appropriate sectors.

Uncertainties and time-series consistency

Uncertainties in emission estimates for data from other sectors are relevant to the entire energy sector (Table 3.3.1).

Source-specific QA/QC and verification

There was no specific IPCC Tier 1 quality checks applied to 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

Biomass activity data for the commercial and residential sectors has been improved. Commercial biomass data is now available from the Cogeneration Association of New Zealand. Further information on commercial biomass data can be found at: www.cogeneration.co.nz). Improved residential biomass data is now based on New Zealand census results and wood consumption from a household energy end-use project (Building Research Association of New Zealand, 2002). Previously, this data was estimated based on plant capacity.

Activity data for liquid fuels in this category is now more accurate. This is due to the further disaggregation of liquid fuels using the Delivery of Petroleum Fuel Industries Survey (eg, premium petrol, regular petrol, heavy fuel oil, light fuel oil) and individual emission factors applied to each type of liquid fuel. The data has been aggregated to calculate the liquid fuels total for the commercial, residential and agriculture subcategories.

The stationary and mobile splits for the agriculture subcategory have been improved. The Statistics New Zealand Energy Use Survey: Primary industries 2008 (Statistics New Zealand, 2008) is now used. Consequently, the stationary and mobile splits are more accurate and detailed for the whole time series.

There have been small activity data revisions in some categories due to revisions in liquid, solid and gaseous fuels data sources.

The emission factors for liquid fuels and gaseous fuels have been improved (refer to section 3.3).

Source-specific planned improvements

In 2008, a study conducted by an external consultant investigated the disproportionate growth of the ‘resellers’ category of the Delivery of Petroleum Fuels by Industry Survey. The study reviewed the fuel supply chain in New Zealand and tested the theory that the Delivery of Petroleum Fuels by Industry Survey was not accurately describing the consumption of petroleum fuels. The report can be found on the Ministry of Economic Development’s website at:

www.med.govt.nz/templates/MultipageDocumentTOC____40472.aspx.

The key finding of this study was that the approach of surveying New Zealand’s five major oil companies is inadequate as there are now many more independent distributors involved in direct fuel deliveries to larger consumers. The major oil companies have moved into a wholesale role and withdrawn from their direct delivery operations.

The Ministry of Economic Development will develop an annual survey of independent distributor companies to capture their fuel deliveries, and allocate these to the appropriate economic sector. Initial work on this survey has started and will continue throughout 2010.

3.4 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 comprises two subcategories: solid fuels and oil and natural gas.

In 2008, fugitive emissions from fuels accounted for 2,059.1 Gg CO2‑e (6.1 per cent) of emissions from the energy sector. This is an increase of 884.6 Gg CO2‑e (75.3 per cent) from the 1990 level of 1,174.5 Gg CO2‑e.

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

Description

In 2008, fugitive emissions from the solid fuels subcategory produced 342.6 Gg CO2-e (16.6 per cent) of emissions from the fugitive emissions category. This is an increase of 70.5 Gg CO2-e (25.9 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 dependent on the coal grade and the depth of the coal seam. In 2008, 79.2 per cent of the CH4 from coalmining (including post-mining emissions) came from underground mining. This includes the emissions from post-underground mining activities such as coal processing, transportation and use. There is no known flaring of CH4 at coalmines, and CH4 captured for industrial use is negligible. In 2008, New Zealand coal production was 4.9 million tonnes, a 1.5 per cent increase from the 2007 production level of 4.8 million tonnes.

Methodological issues

The underground mining subcategory dominates fugitive emissions from coalmining. The 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 IPCC 1996 as shown in Table 3.4.1.

Table 3.4.1 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 (1996) default range
(0.2–1.34 t/kt coal)
Underground: bituminous mining 16.75 Top end of IPCC (1996) 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 (1996) default range
(0.0–0.134 t/kt coal)
Underground post mining 1.6 Mid-point IPCC (1996) 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 (Table 3.3.1).

Source-specific QA/QC and verification

There was no specific IPCC Tier 1 quality checks applied to this category because 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.

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

Description

In 2008, fugitive emissions from the oil and natural gas subcategory contributed 1,716.5 Gg CO2-e (83.4 per cent) of emissions from the fugitive emissions category. This is an increase of 814.1 Gg CO2-e (90.2 per cent) from 902.4 Gg CO2-e in 1990. Fugitive emissions from oil and gas operations (CO2) were identified as a key category (level and trend) in 2008.

The main source of emissions from the production and processing of natural gas is the Kapuni Gas Treatment Plant. Emissions from the Kapuni Gas Treatment Plant are not technically due to flaring and are included under this category because of data confidentiality concerns. The plant removes CO2 from a portion of the Kapuni gas (a high CO2 gas when untreated) before it enters the national transmission network.

The large increase in CO2 emissions from the Kapuni Gas Treatment Plant 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 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 9.6 per cent increase in emissions from processing and flaring between 2007 and 2008. This is largely due to the large increase in flaring from the Tui offshore oil field as it does not have pipeline facilities to on-sell any of the extracted gas.

Fugitive emissions also occur in transmission and distribution within the gas transmission pipeline system. However, these emissions are relatively minor in comparison with those from venting and flaring.

The oil and natural gas subcategory also includes estimates for emissions from geothermal operations. While some of the energy from geothermal fields is transformed into electricity, 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. Geothermal sites, where there is no use of geothermal steam for energy production, have been excluded from the inventory. In 2008, emissions from geothermal operations were 515.4 Gg CO2-e, an increase of 105.6 Gg CO2-e (25.8 per cent) since the 1990 level of 409.8 Gg CO2-e.

Between 2007 and 2008, emissions from geothermal operations increased by 55.2 per cent. This was in part due to the commissioning of a new 100 MW geothermal electricity generation plant in Kawerau in 2008.

Methodological issues

Venting and flaring from oil and gas production

Data on the amount of CO2 released through flaring was either supplied directly by the gas field operators or calculated from the supplied energy data using emission factors from Eng et al (2008). 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 mainly occur from low-pressure distribution pipelines rather than from high-pressure transmission pipelines. In this inventory, submission emissions from transmission and distribution have been separated out for the first time. Emissions from the high-pressure transmission system were provided by Vector Ltd. 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 low-pressure distribution system is unaccounted for, and half of this (1.75 per cent) is lost through leakage. The other half is unaccounted for because of metering errors and theft. Consequently, activity data from the low-pressure distribution system is based on 1.75 per cent of the gas entering the distribution system and CO2 and CH4 emissions are based on gas composition data.

Oil transport, refining and storage

Fugitive emissions from the oil transport and oil refining and storage subcategories are calculated using an IPCC Tier 1 approach (IPCC, 1996). For the oil transport subcategory, the fuel activity data is New Zealand’s total production of crude oil reported in the New Zealand Energy Data File (Ministry of Economic Development, 2009). The CH4 emission factor is the mid-point of the IPCC (1996) default value range (0.745 tonnes of CH4/PJ).

Fugitive emissions from oil refining and storage are based on oil intake at New Zealand’s single oil refinery. The CH4 emission factor for oil refining is the same as that for oil transport. The emission factor for oil storage is 0.14 tonnes of CH4/PJ, a New Zealand-specific emission factor. The combined emissions factor for oil refining and storage is 0.885 tonnes of CH4/PJ.

Geothermal

Estimates of CO2 and CH4 emissions for the geothermal subcategory are obtained directly from the geothermal field operators. There are two major geothermal operators in New Zealand. Quarterly gas sampling analysis is conducted to measure the amount of CO2 and CH4 in the steam for one of the main operators. For the other main operator, spot measurements are taken when the power stations are operating normally and the net mega watts of electricity generated that day is used to calculate the emission factors.

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 generating 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 with the 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 was no specific IPCC Tier 1 quality checks applied to 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

Venting, flaring and own-use activity data from gas and oil field operators has been revised. This is due to the correction of manual entry errors in the data set. This data has now been corrected and quality-control procedures have been established.

Geothermal activity data has been revised due to the removal of the Tarawera geothermal field. The field is a binary plant which does not release emissions.

Activity data provided by the New Zealand Refining Company of crude oil production in New Zealand has been revised.

Transmission and distribution data has been split out. The activity data for transmission and distribution has also been improved. Previously, the total amount of gas entering the pipelines was reported for activity data. Now, the actual amount lost in terajoules is reported.

Source-specific planned improvements

The Ministry of Economic Development has started investigating discrepancies between activity data, CO2 and CH4 emissions for some years (particularly estimates for the late 1990s). This work will continue through 2010. Geothermal and Energy Technical Services Ltd (2009) provides further detail on New Zealand’s geothermal fields and will aid the Ministry of Economic Development in its investigations.