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6 Methodology – Greenhouse Gas Emissions

There are several sources of information on greenhouse gas emissions, but here the data from the latest New Zealand Government greenhouse gas inventory are used (MfE, 2007b).

These are grouped here into the same three categories as the air pollution health effects calculations. These categories are not completely consistent with those used for the greenhouse gas emissions assessments, and the data have been re-grouped to fit this categorisation. It has been done this way – rather than trying to re-group the air pollution data – since it is the easier of the two methodologies. It also reflects the priority areas and those sectors most likely to be identified for co-benefits.

6.1 Data sources

The main data source for sector greenhouse gas emissions is the national emissions inventory, updated in 2007, but there are several other sources and not all of the figures are consistent. Another source referenced is the Ministry of Economic Development’s latest report on greenhouse emission from the energy sector (MED, 2007). This gives more detailed information on emissions from various energy sources and is updated annually. Other sources used include the IPCC for emission factors and various related and recent studies carried out on detailing emissions.

One problem in using some of these data sources is that the sectoral breakdowns are not equivalent, making comparison between data sources difficult, and leaving the co-benefit analysis open to alternative interpretations.

Most of the figures used are reasonably consistent across the various data sources. For instance the Ministry for the Environment national greenhouse gas inventory gives the 2005 CO2 emissions from land transport as 12.6 Mt/year (when all the relevant categories are summed). The Ministry of Economic Development energy use figure gives this as 12.7 Mt/year. The difference is not fully accounted for, and is likely to result from the two methodologies not including exactly the same categories. However this level of difference is very minor and will not alter the outcomes of this co-benefit analysis significantly.

A greater level of discrepancy can be found in the estimates of CO2 emissions from wood burners used for home heating. In one sense these can be listed as zero, since there is judged no net release of CO2 from biofuels, but the emissions are included in the analysis here since they have a major impact of local air pollution and health effects. The Ministry of Economic Development figures are substantially lower than those used by the Ministry for the Environment (as well as those used by Regional Councils in various regional emissions inventories). The reasons for this have not been fully investigated – they may include factors such as the large fraction of unreported, self-collected wood that is known to be used for home heating. The analysis here has adopted to follow the emissions figures from the Ministry for the Environment inventory, which are consistent with the Regional Council data. These data are judged to be more reliable since they are based on much more detailed and specific survey data than that used by the Ministry of Economic Development.

6.2 Domestic heating

The source of data on fuel used (and hence emissions) in New Zealand is the Household Energy Efficiency Programme (HEEP) (BRANZ, 2006). Having run for 10 years, this gives a comprehensive view of energy use in this sector, summarised in Table 6.1.

This shows that for heating, 57% of households use electricity, 52% use wood (many households will have multiple fuel sources), 34% gas, 7% coal, and a negligible amount of other fuels (such as oil). The total domestic heating consumption on an average winter’s day in July is 15,490 tonnes of wood, 1,442 tonnes of coal, and 375 tonnes of gas. These ‘average day’ figures are derived by tracking the consumption through the winter months (defined as June, July and August) and taking an average daily figure.

Table 6.1: Domestic home heating methods and fuels used, New Zealand

  Households Winter fuel use (July)

%

Number

Tonnes per day

%

Electricity

57%

816,907

Total gas

Flued gas

Unflued gas

34%

9%

24%

487,278

134,939

352,339

375

2%

Oil

2%

28,663

0

0.0%

Open fire

Open fire: wood

Open fire: coal

6%

6%

2%

85,990

85,990

28,663

2,080

295

12%

2%

Total wood burner

Pre-1994 wood burner

1994–1999 wood burner

Post-1999 wood burner

38%

16%

12%

9%

544,605

235,724

178,825

130,055

11,412

5,915

4,077

1,420

66%

34%

24%

8%

Multi-fuel burners

Multi-fuel burners: wood

Multi-fuel burners: coal

8%

8%

5%

114,654

114,654

78,824

1998

1,149

12%

7%

Pellet burners

0%

0

0

0%

Total wood

Total coal

52%

7%

745,249

107,488

15,490

1,443

89%

8%

Total

100%

1,440,336

17,308

100%

Source: Reproduced from the Warm Homes Technical Report (MfE, 2005).

The greenhouse gas emissions from these sources are calculated using the emissions factors in Table 6.2, with the overall result shown in Table 6.3. The data in this table is given in terms of CO2 emissions per winter day. In most of the country, these emissions will be close to zero on summer days. The resulting total emission for home heating, at 25.3 kilotonnes per day, is broadly consistent with the ‘other sectors’ greenhouse gas inventory total of 3,437 kt/year, if it assumed there are 136 days in winter, and wood is used evenly throughout these days (25.4 kt/day). This is not unreasonable, since ‘winter’ is often defined in the South Island as lasting up to 180 days, but in the warmer North Island might be only 90 days or less. For the purposes of this study, a figure of 140 days has been used for the length of ‘winter’. It is assumed that amounts of wood used outside of the winter period, whilst not zero, are very small relative to the winter amounts

Table 6.2: Home heating CO2 emissions factors, gross calorific values (2005)

Fuel type

kt CO2 /PJ

kt CO2 /PJ

MJ/kg

Emission rate used2

Wood

104.2

108.5

12.8

1,350 g/kg

Bituminous coal1

88.8

92.7

22.6

2,000 g/kg

Sub-bituminous coal1

91.2

94.1

29.9

2,600 g/kg

Oil

68.7

73.3

46.0

3,000 g/L

Gas/LPG

60.4

62.8

49.7

2,700 g/kg

Data sources: Energy GHG Emissions for NZ (MED), IPCC, Energy Data File (MED).

Notes:

1 Assume that 58% coal is sub-bituminous – therefore average emission rate of 2,350 g/kg used.

2 The emissions rates used in this analysis are calculated using the MED figures, and rounded. The analysis is not greatly sensitive to these figures, since the uncertainties in other parts of the analysis are larger than the emission rate uncertainties.

Table 6.3: Home heating CO2 emissions totals, day in winter (2005)

Fuel

Amount used (tonnes)

Emission factor (kg/tonne)

Total emission CO2 (kilotonnes)

Wood

15,490

1,350

20.9

Coal

1,443

2,350

3.4

Gas

375

2,700

1.0

Oil

<1

3,000

<0.001

So far it has been assumed that emissions of non-CO2 greenhouse gases are negligible from this sector. The data in Table 6.3 define the baseline emissions of CO2 for the domestic heating sector. However the emissions of other greenhouse gases, whilst small in relative terms, are not negligible and need to be included as they are not judged greenhouse neutral. Table 6.4 shows the CO2 equivalent emissions from home heating due to methane (CH4). The emissions of nitrous oxide (N2O) are much smaller, and less than 1%.

Table 6.4: Home heating methane emissions totals, day in winter (2005)

Fuel

Amount used (tonnes)

Emission factor CH4 (kg/tonne)1

Total emission CO2-e (kilotonnes)

Wood

15,490

77.5

1.2

Coal

1,443

156

0.2

Gas

375

0.9

<0.001

Oil

<1

0.9

<0.001

1 Takes account of the greenhouse warming potential factor of 21. The emissions factors are taken from the MED 2007 NZ Energy Greenhouse Gas Emissions data.

GHG emissions and air pollution resulting from residential heating can be reduced by a variety of technical, political and social initiatives. In general, the emissions can be reduced by the following:

  • reducing the demand for heating:

    • improved building envelope
    • insulation
    • improved building design (passive solar)
    • smaller homes
  • improving the efficiency of the heating:

    • heat pumps
    • reduce the number of open fires
  • switching to less pollution methods of heating:

    • low-emissions wood burners
    • pellet burners
    • heat pumps.

6.3 Transport

Only land transport is assessed here. Marine and aviation do not generally contribute anything significant to air quality effects. Similarly off-road vehicle emissions (including farm vehicles) are insignificant contributors. The basic land transport fleet emissions profile is given in Table 6.5, reproduced from the greenhouse gas inventory (MfE, 2007b).

Table 6.5: Annual greenhouse gas emissions from the land transport fleet (2005)

View annual greenhouse gas emissions from the land transport fleet (2005) (large table).

Table 6.5 shows that the largest source of transport emissions is petrol cars (68%), followed by heavy-duty diesel trucks (17%), and then diesel cars and light commercial vehicles (10%). Because of their prevalence on the road network, and their air pollution emissions, diesels are also the vehicles responsible for the greatest air quality health effects (diesel vehicles have on average 25 times higher emission rates of PM10 than petrol vehicles).

There are two types of petroleum used in New Zealand – locally refined and imported. All New Zealand petroleum refining takes place at the NZ Refining Company Ltd plant at Marsden Point. All of the fuel processed there is consumed in New Zealand, and all associated emissions are assumed covered above. The refinery itself produces air pollution and greenhouse gas emissions, but these are a relatively small fraction of the total. Imported fuel is a small portion of the total and is included in the figures in Table 6.5.

As with the domestic heating emissions, there are a number of options available for reducing emissions from the transport fleet:

  • reducing total vehicle-kilometres of travel by:

    • improving sustainable transport, including through encouraging high occupancy vehicle use and promoting walking, cycling and public transport
    • promoting rail as an alterative method for transporting freight
  • reducing fuel consumption per kilometre by:

    • encouraging or mandating fuel-efficient and environmentally friendly vehicles and technologies
  • reducing pollution/GHGs emitted per unit of fuel consumption by:

    • implementing wide-scale biofuel use
    • improving fuel quality
    • improving engine performance (ie, encouraging all vehicles to be properly tuned).

Some progress on the initiatives discussed can be made through driver education and public awareness campaigns. However, it is likely that regulations, or economic incentives, will need to be implemented at the national, regional, and local levels to make significant headway in reducing the environmental impacts of road transport.

6.3.1 Biofuels

In principle, the burning of biofuels represents an approximately carbon neutral process. However, factoring in the energy required to plant, tend, harvest, process and transport the finished product can make the equation less favourable. There is currently a debate within the scientific community regarding just how much input energy is required to produce, process, and transport biofuels. Given the wide range of feedstocks available (such as tallow, cereals, soybean, rape seed oil, sugar cane and palm oil) and the variety of growing conditions, as well as the various fuels that can be used to process and transport, there is no clear cut answer. Much of the research on ethanol has been conducted in the USA and is based on corn-based ethanol. Appendices B and C provide data on the major studies exploring the net energy balance for corn-based ethanol in the USA and Canada. Studies located above the ‘zero line’ found that ethanol had a positive net fossil energy value (ie, less fossil energy is used to produce ethanol than the energy that is available in ethanol). Studies below the ‘zero line’ found that ethanol had a negative fossil energy value. This may not be directly transferable to the New Zealand situation, since the assessment is sensitive to:

  1. the biofuel feedstock used
  2. the process employed to produce the biofuel
  3. indirect effects such as transport and land use.

The conclusions of a US EPA study which examined the results of 80 studies related to the tailpipe emissions from biodiesel (US EPA, 2002) indicate that a blend containing 20% biodiesel and 80% conventional diesel by volume would have an approximate 10.1% reduction in tailpipe PM10 emissions. Since biodiesel burns hotter, nitrogen oxide (NOx) emissions are actually higher than conventional diesel. However not all studies agree with this conclusions. In Australia, one study concluded there was no benefit at all (Beer et al, 2004). Most studies recommend further research before any strong conclusions can be drawn.

American and European studies on biofuels can not easily be adapted to New Zealand conditions, hence life-cycle GHG emissions of biofuels in New Zealand are still very much unknown. In addition, the impact that biofuels will have on air pollution is still uncertain, including its potential negative impacts on new pollutant emissions such as acetaldehyde. Before large-scale biofuels targets are implemented, a full analysis on the costs and benefits should be conducted. It is also suggested that research is conducted to determine which of the available energy crops (and waste streams) are able to produce the biofuels most efficiently and with minimal environmental impact in New Zealand. While imported biofuel will not require a large amount of input energy from a New Zealand perspective, an understanding of the embodied GHG emissions should still be required to ensure sustainability.

Ethanol-burning cars will emit fewer carcinogens such as benzene and butadiene, but they can emit 20 times as much acetaldehyde as those using conventional fuel. Acetaldehyde can react with sunlight to form ozone, one of the main constituents of smog (Jacobson, 2006). A further problem, indicated by many of the emissions studies, is that while emissions of some pollutants (such as PM10 and CO) can go down, others (such as NOx) can go up because the fuel is burning hotter. This makes a health effects analysis difficult, since the gains from reduced PM10 may be offset by the losses from increased NOx.

For the purposes of this study, it is assumed that:

  1. all biofuel is carbon neutral, resulting in a greenhouse gas emissions saving
  2. the government target 3.4% blend results in a PM10 emissions reduction of 5%
  3. E10 ethanol blends in petrol result in a PM10 emissions reduction of 10%
  4. B20 biodiesel blends result in a PM10 emissions reduction of 20%.

These figures are very preliminary, indicative only, and should not be regarded as having a great deal of scientific rigour (see summary in Appendix B).

6.4 Industry

The energy industries sub-sector comprises public electricity and heat production, petroleum refining, and the manufacture of solid fuels and other energy using industries. The air pollution resulting from these operations is generally localised, for the most part, affecting only the communities within the immediate vicinity of the plant.

6.4.1 Electricity generation

All of the major thermal electricity producers in New Zealand are listed in Appendix D. Assessing the greenhouse emissions accurately from these sources is difficult since they run on different fuels, with widely different capacity factors.

For the purposes of this study, the following estimates have been made:

  1. Thermal stations with a total theoretical maximum generation capacity of 2,621 MW run with an overall average capacity factor of 50% (some like Southdown are base load and operate close to 100%, others like Whirinaki are emergency and operate close to 0%).
  2. The fuels used are a mixture of gas, oil and coal. Electricity generated from these fuels has different emissions factors, with coal-fired electricity ranging from 6.8 to 7.6 kt/MW-year depending on the calorific value, electricity from natural gas being 5.0 kt/MW-year and electricity from oil 7.1 kt/MW-year. In this analysis an overall average factor of 6 kt/MW-year has been used for the annual emissions, based on the approximate current balance of fuel use – about 2/3 gas, 1/3 coal and negligible oil.

This gives a total CO2 emission from the sector of 6.5 Mt/year.

6.4.2 Manufacturing and construction

Estimating these emissions independently requires a great deal of detailed work. Even in the air pollution effects study (HAPiNZ) this was done by making area-based estimates. This is a valid approach, provided there is reasonable confidence that the sector is fully covered both in the air pollution exposure methodology, and in the greenhouse gas emissions methodology.

Thus the total CO2 emissions from this sector including an allowance for medium to small dischargers are 5.1 Mt/year, as per the greenhouse gas inventory (MfE, 2007b).

6.4.3 Other

The major emissions categories covered already – domestic heating, transport, manufacturing, thermal electricity generation, – account for large fraction of the air pollution associated with health effects. As discussed previously, this analysis has focused on these sources.

There are other sources of both air pollution and greenhouse gases that can have air quality effects. These are mainly medium to small industrial sources, principally those using some combustion process such as boilers. Also included here are a reasonably large number of small emitters (fish and chip shops, panelbeaters, etc). These have not been explicitly included as there is very little specific data on either their air pollution emissions or greenhouse gas emissions. However they are largely included in the major manufacturing and construction category above – being the balance of emissions unidentified by specific analysis.

6.5 Greenhouse emissions summary

All of the calculations above are summarised in Table 6.6 and compared with the emissions assessment detailed in Table 2.1. This is done to ensure consistency, given that most of the two sets of figures have been derived independently.

Table 6.6: Summary of annual greenhouse emissions from the key sectors

Sector

Emissions estimate (from Table 2.1) (Mt/yr)

Estimate calculated here (Mt/yr)

Comment

Domestic heating

3.5

3.5

Assuming an average winter period of 140 days

Transport

12.8

12.7

Excludes marine and aviation

Industry

Electricity

Other

6.1

5.1

6.5

5.1

The ‘other’ sector is assumed to be fully covered (ie, has not been independently calculated)

The level of agreement, whilst not perfect, is encouragingly good. Not included in this comparison are the increased methane emissions from domestic heating, at 1.4 kt/day, or 0.2 Mt/year. These are not included in Table 2.1, but do need to be accounted for in the analysis.

6.6 Economics

Having made an assessment of the quantities of greenhouse gases emitted by each of the sectors being considered, these are now ‘priced’ in order to make a comparison with the health effects costs.

It is difficult to put a sensible price of CO2. International free market trading has existed for several years, with current trading in range of $12–$15 per tonne. Under various Kyoto target reduction schemes, it has traded in the past for over $200 for high quality European credits, to below $0.50 for Russian ‘hot air’ credits.

The NZ government, in their Preferred Climate Change Policy Package (2004), set a cap on the price of CO2 at $25 per tonne. This is the price used for the comparative analysis. It is slightly higher than the NZ$21 per tonne CO2-e used by the Treasury in its December 2007 valuation of New Zealand’s Kyoto liability.