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Consultation Draft

National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No 1)

Departmental Commentary

December 2014

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© Commonwealth of Australia, 2014.

National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No 1) Departmental Commentary is licensed by the Commonwealth of Australia for use under a Creative Commons By Attribution 3.0 Australia licence with the exception of the Coat of Arms of the Commonwealth of Australia, the logo of the agency responsible for publishing the report, content supplied by third parties, and any images depicting people. For licence conditions see: http://creativecommons.org/ licenses/by/3.0/au/

This report should be attributed as ‘National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No 1) Departmental Commentary.

The Commonwealth of Australia has made all reasonable efforts to identify content supplied by third parties using the following format ‘© Copyright, [name of third party].

Disclaimer The views and opinions expressed in this publication are those of the authors and do not necessarily reflect those of the Australian Government or the Minister for the Environment.

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CONTENTS

Purpose.......................................................................................................................4

Information for respondents - NGER (Measurement) Amendment Determination 2015 (No.1) (Attachment A)........................................................................................5

Submissions..............................................................................................................5

Overview of the NGER (Measurement) Determination 2008..................................6

Attachment A: Explanation of the NGER (Measurement) Amendment Determination 2015 (No. 1)........................................................................................8

Schedule 1— Amendments relating to adoption of IPCC 2006 Global Warming Potential Values and Oxidation Factors...................................................................9

Chapter 1: General................................................................................................10

Part 1.1A Potential greenhouse gas emission embodied in an amount of natural gas.........................................................................................................10

Part 1.1B Potential greenhouse gas emission embodied in an amount of gaseous designated fuel..................................................................................10

Part 1.1A Potential greenhouse gas emission embodied in an amount of liquid designated fuel.......................................................................................10

Part 2.2 Emissions released from the combustion of solid fuels.................10

Part 2.3 Emissions released from the combustion of gaseous fuels..........10

Part 2.4 Emissions released from the combustion of liquid fuels...............11

Chapter 3: Fugitive Emissions............................................................................11

Part 3.2 Coal mining – fugitive emissions......................................................11

Part 3.3 Oil and natural gas – fugitive emissions..........................................12

Chapter 4: Industrial Processes emissions.......................................................13

Part 4.3 Industrial processes – chemical industry.........................................13

Part 4.4 Industrial processes – metal industry...............................................13

Chapter 5: Waste...................................................................................................14

Part 5.2 Solid waste disposal in land..............................................................14

Part 5.3 Wastewater handling (domestic and commercial)...........................14

Part 5.4 Wastewater handling (Industrial).......................................................15

Schedule 2 Energy content factors and emission factors............................16

Schedule 3 Carbon conent factors..................................................................16

Schedule 2— Amendments relating to carbon capture and storage..................17

Part 3.4 – Carbon Capture and Storage – Fugitive Emissions.....................17

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PURPOSE

The National Greenhouse and Energy Reporting (NGER) system is a national system for reporting greenhouse gas emissions, energy consumption and energy production by Australian corporations.

The NGER Measurement Determination 2008 was made under subsection 10(3) of the National Greenhouse and Energy Reporting Act 2007, which provides for the Minister to determine methods for the measurement and estimation of these data.

This document has been prepared by the Department of the Environment and outlines proposed amendments to the NGER Measurement Determination 2008.

They are designed to align NGERS reporting with Australia’s international reporting obligation, provide additional flexibility for reporters and to improve the consistency, cost effectiveness and accuracy of the methods available to estimate emissions.

The draft amendments contained in the NGER Measurement Amendment Determination 2015 (No.1) are restricted in scope.

Amendments are designed to improve the methods available for particular emission processes, with:

Updates to emissions factors for the combustion of fuel, by incorporating the updated Global Warming Potentials (GWPs) adopted by the Parties to the UN Framework Convention on Climate Change and its Kyoto Protocol, and reflecting GWP values contained in the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC);

Provision of additional methods for the estimation of emissions from Carbon Capture and Storage operations;

Removal of guidance for the estimation of potential emissions from natural gas, and legacy waste for landfills - reflecting the repeal of the Clean Energy Act 2011;

Support for the Government’s introduction of the Emissions Reduction Fund; and

Responses to feedback from stakeholders.

In addition, there have been some minor corrections of previous drafting errors.

Details of the proposed amendments to the Determination are set out in Attachment A .

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In making these draft amendments publicly available the Department seeks views on their practical operation and application.

This consultation will inform the finalisation of a National Greenhouse and Energy Reporting Measurement Amendment Determination 2015 (No.1) which will be a legislative instrument for the purposes of the Legislative Instruments Act 2003 (Cwlth).

Schedule 1 and 2 of this Amendment Determination are intended to commence on 1 July 2015 and apply to the 2015-2016 financial year. The amendments would affect NGER reports to be submitted by corporations in October 2016.

INFORMATION FOR RESPONDENTS - NGER (MEASUREMENT) AMENDMENT DETERMINATION 2015 (NO.1) (ATTACHMENT A)

17 December 2014Consultation draft available on the Department of the Environment’s website

30 January 2015 Submissions on the consultation draft close (Attachment A)

13 Febuary 2015NGER Measurement Amendment Determination 2015 (No.1) scheduled for lodgement

Submissions

Submissions are invited from all interested stakeholders. Where possible, submissions should be lodged electronically to the email address below.

Submissions will not be treated as confidential and may be made publicly available. If a stakeholder wishes their submission (or extracts of a submission) to be kept confidential, this should be indicated in the submission.

Submissions should be sent to:

Email: [email protected]

Copies of this paper are available on the Department’s website at: http://www.environment.gov.au/en/government/submissions.

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http://www.environment.gov.au/en/government/submissions

mailto:[email protected]

OVERVIEW OF THE NGER (MEASUREMENT) DETERMINATION 2008

The legislative framework for the National Greenhouse and Energy Reporting system is established by the National Greenhouse and Energy Reporting Act 2007.

The Act makes reporting mandatory for corporations whose energy production, energy use, or greenhouse gas emissions meet certain specified thresholds.

The NGER Measurement Determination 2008 provides the methods for the estimation of greenhouse gas emissions and for the production and consumption of energy.

The scope of the Determination follows international classification systems including:

fuel combustion – emissions from the combustion of fuel for energy (chapter 2);

fugitive emissions from the extraction, production, flaring, processing and distribution of fossil fuels and carbon capture and storage (chapter 3);

industrial process emissions where a mineral, chemical or metal product is formed using a chemical reaction that generates greenhouse gases as a by-product and emissions of hydrofluorocarbons and sulphur hexafluoride resulting from their use by certain industries (chapter 4); and

emissions from waste disposal – either in landfill, as management of wastewater or from waste incineration (chapter 5).

The most significant source of emissions in Australia is from fuel combustion, which accounts for over 60 per cent of the emissions reported in the national greenhouse gas inventory.

The scope of the Determination does not include land based emissions covered by the IPCC categories ‘Agriculture’ and ‘Land Use, Land Use Change and Forestry’. Emissions from fuel combustion by land based industries are, nonetheless, covered by this Determination.

Methods of measurement

The framework supporting the emissions estimation methods specified in the Determination reflects the approaches of the IPCC guidelines governing the estimation of national greenhouse gas inventories.

The Determination provides four different classes of methods for the estimation of emissions for most emissions sources.

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NGER Method 1: is the National Greenhouse Accounts default method and specifies the use of default emission factors in the estimation of emissions. This is the simplest method available and, in general, emissions may be estimated by reference to activity data such as fossil fuel consumption, evidenced by invoices, and the use of specified emission factors provided in the Determination.

NGER Method 2: is a facility-specific method using industry sampling and Australian or international standards to provide more accurate estimates of emissions at facility level. Method 2 enables corporations to undertake additional measurements – for example, the qualities of fuels consumed at a particular facility – in order to gain more accurate estimates for emissions for that particular facility.

NGER Method 3: is a facility-specific method using Australian or international standards for both sampling and analysis of fuels and raw materials. Method 3 is very similar to Method 2, except that reporters must use Australian or equivalent documentary standards for sampling (of fuels or raw materials) as well as for the analysis of fuels.

NGER Method 4: direct monitoring of emission systems, either on a continuous or periodic basis. Rather than providing for the analysis of the chemical properties of inputs (or in some case, products), Method 4 aims to directly monitor greenhouse gas emissions arising from an activity. This approach can provide a higher level of accuracy in certain circumstances, depending on the type of emissions process; however, it is more likely to be more data intensive than other approaches.

As for Methods 2 and 3, there is a substantial body of documented procedures on monitoring practices and state and territory government regulatory experience that provide the principal sources of guidance for the establishment of such systems.

More generally, the NGER Measurement Determination draws on existing estimation practices wherever possible, including the use of data collected for commercial, taxation or other regulatory purposes, with the aim of maximising the use of readily validated data and minimising administrative burdens on reporters.

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ATTACHMENT A: EXPLANATION OF THE NGER (MEASUREMENT) AMENDMENT DETERMINATION 2015 (NO. 1)

The draft National Greenhouse and Energy Reporting Measurement Amendment Determination 2015 (No.1) would amend the National Greenhouse and Energy Reporting Measurement Determination 2008.

The following pages set out the amendment items and provide additional information to assist stakeholders in understanding them and to provide their views.

Item 1 – Name of Determination

This item provides that the title of the Instrument is the National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No.1).

Item 2 – Commencement

This item provides for the amendments in Schedule 1 to commence on 1 July 2015.

Item 3 – Authority

This item outlines that the Determination falls under the National Greenhouse and Energy Reporting Act 2007.

Item 4 – Schedule(s)

The draft amendments to the Determination are outlined at Schedule 1.

Schedule 1 Amendments

The explanations of amendments provided below are grouped by division within the Determination. Individual amendment items are referenced to the amendment number as stated in the draft NGER (Measurement) Amendment Determination 2015 (No.1).

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SCHEDULE 1— AMENDMENTS RELATING TO ADOPTION OF IPCC 2006 GLOBAL WARMING POTENTIAL VALUES AND OXIDATION FACTORS

COMMENCING 1 JULY 2015

The explanations of amendments provided below are grouped by part and division within the Instrument. Individual amendment items are referenced to the amendment number as stated in the Instrument.

Schedule 1 provides amendments to update the National Greenhouse and Energy Reporting (Measurement) Amendment Determination to reflect the use of updated Global Warming Potentials (GWPs) from the IPCC Fourth Assessment Report, adopted by the Parties to the UN Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol.

Internationally, the Australian Government will report on emissions utilising the updated GWPs for the first time in the submission of the National Inventory Report due in April 2015. For that submission, the 2006 IPCC Guidelines for the preparation of national greenhouse gas inventories (IPCC 2006) will become mandatory for Annex 1 countries and, in accordance with these rules, updated GWPs will be used.

The GWPs used to convert raw gases into carbon dioxide equivalent values have been revised. The GWP for methane increases from 21 to 25, and the GWP for nitrous oxide decreases from 310 to 298.

Additionally, IPCC 2006 mandates the application of 100% Oxidation Factors. NGERS will be updated to reflect this requirement, which will result in minor increases in CO2 emission factors.

These updates ensure NGERS is consistent with the IPCC 2006 and will adequately support Australia’s international reporting obligations.

The proposed amendments will support the implementation of the Emissions Reduction Fund, providing the latest internationally agreed GWP for the calculation and verification of emissions reduction from different activities. The amendment will also support the Government’s deregulation agenda - reducing administrative burdens and enhancing flexibility for company reporters.

These amendments are intended to commence on 1 July 2015 and apply to the 2015-2016 financial year. The amendments would affect NGER reports to be submitted by corporations in October 2016.

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Chapter 1: General

Part 1.1A Potential greenhouse gas emission embodied in an amount of natural gas

Part 1.1B Potential greenhouse gas emission embodied in an amount of gaseous designated fuel

Part 1.1A Potential greenhouse gas emission embodied in an amount of liquid designated fuel

Item NGER (Measurement) Determination Reference

Commentary

1 1.4(3) 1.4(4) 1.4(5)

Removes guidance for determining the method of measurement for estimating potential emissions, complementing the repeal of the Clean Energy Act 2011.

2 Part 1.1A Part 1.1B Part 1.1C

Provisions for the derivation of potential emissions under the Clean Energy Act 2011 are repealed.

Part 2.2 Emissions released from the combustion of solid fuels

Part 2.2 updates Oxidation Factors provided as part of methodologies.


Commentary

3 2.5 (3) References to Oxidation Factor changed to 100% oxidation, in accordance with IPCC 2006 inventory guidelines.

Part 2.3 Emissions released from the combustion of gaseous fuels

Part 2.3 updates Global Warming Potential (GWP) values and adjusts non-CO2 emission factors provided as part of methodologies.

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Commentary


Part 2.4 Emissions released from the combustion of liquid fuels

Part 2.4 updates Oxidation Factors provided as part of methodologies.


Commentary


Chapter 3: Fugitive Emissions

Part 3.2 Coal mining – fugitive emissions

Part 3.2 updates GWP values and adjusts non-CO2 emission factors provided as part of methodologies.


Commentary

6, 7, 8 3.5 Methane emission factors for gassy and non-gassy mines updated for IPCC Fourth Assessment Report (AR4) GWPs.

9 3.6 (1) GWP for methane provided for equation updated from 21 to 25 for IPCC AR4 GWP.

10, 11 3.14 3.15 3.15A

Definition of OF changed from correction factor to a destruction efficiency. This reflects the change to 100% oxidation factors under IPCC 2006 inventory guidelines, and clarifies the use of the 0.98

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Commentary

destruction efficiency factor.

12 3.17(2) Methane emission factors for run-of-mine coal extracted from the mine updated for IPCC AR4 GWPs.

13 3.20 State based methane emission factors for run-of-mine coal extracted from the mine updated for IPCC AR4 GWPs.

14 3.21(1) GWP for methane provided for equation updated from 21 to 25 for IPCC AR4 GWP.

Part 3.3 Oil and natural gas – fugitive emissions

Part 3.3 updates GWPs and adjusts non-CO2 emission factors provided as part of methodologies.


Commentary

15, 16 3.44 (2) Methane emission factors for emission factor for gas type updated for IPCC AR4 GWPs.

17, 23, 27, 33

3.45 (1) 3.53 (1) 3.68 3.86

Definition of OF changed from correction factor to a destruction efficiency. This reflects the change to 100% oxidation factors under IPCC 2006 inventory guidelines, and clarifies the use of `the 0.98 destruction efficiency factor.

18 3.46B (1) 3.46B (4)

GWP for methane provided for equation updated from 21 to 25 for IPCC AR4 GWP.

19, 20, 21, 22, 24, 25, 28, 29, 30, 31

3.49 (1) 3.49 (2) 3.52 (2) 3.59 3.63

Methane emission factors for emission factors updated for IPCC AR4 GWPs.

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Commentary

3.72 (2) 3.76

32 3.80 (3) State based unaccounted for gas factors and natural gas composition factor updated for IPCC AR4 GWPs.

Chapter 4: Industrial Processes emissions

Part 4.3 Industrial processes – chemical industry



Commentary

34, 35, 36 4.47 (2) Nitrous oxide emission factor nitric acid production updated for IPCC AR4 GWPs.

Part 4.4 Industrial processes – metal industry



Commentary

37 4.85 Tetrafluoromethane emission factor updated for IPCC AR4 GWPs.

38 4.89 Hexafluoroethane emission factor updated for IPCC AR4 GWPs.

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Chapter 5: Waste

Part 5.2 Solid waste disposal in land



Commentary

39, 40, 41, 42, 43, 44, 45, 46

5.4(1) 5.4(3) 5.4B(3) 5.4D 5.13(2)(c) 5.15(1) 5.15(4) 5.15A(3)


47 5.15A (3) note (c)

Collection efficiency calculation reference updated.

50 5.22(2) Methane and nitrous oxide emission factors for biological treatment updated for IPCC AR4 GWPs.

48, 49, 51 5.17AA (note 3) 5.17L (note) 5.22A – 5.22L

Provisions supporting the estimation of legacy waste for supporting emissions estimation under the Clean Energy Act 2011 repealed.

Part 5.3 Wastewater handling (domestic and commercial)



Commentary

52, 54 5.25 (1) 5.25 (3) 5.26 (1)


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Commentary

53, 55 5.25 (5) 5.26 (2)

Default methane emission factors for wastewater and sludge provided for equation updated for IPCC AR4 GWP.

56 5.31(7) Default nitrous oxide emission factors for wastewater discharged into aquatic environments provided for equation updated for IPCC AR4 GWP.

Part 5.4 Wastewater handling (Industrial)



Commentary

57 5.42 (1) 5.42 (3)


58 5.42 (6) 5.42 (7)

Default methane emission factors for the treatment of sludge by the plant provided for equation updated for IPCC AR4 GWP.

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Schedule 2 Energy content factors and emission factors

Schedule 2 provides energy content factors and emission factors for the combustion of fuels.


Commentary

59 – 64 Part 1, 2, 3, and 4

Updates emissions factors for the combustion of fuel.

Updates incorporate updated IPCC AR4 GWPs, and updates based on most recent emissions estimates contained in the National Greenhouse Accounts.

Schedule 3 Carbon conent factors

Schedule 3 provides the carbon content factors of fuels.


Commentary

65 - 68 Part 2 and 3 Updates are based on most recent emissions estimates contained in the National Greenhouse Accounts.

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SCHEDULE 2— AMENDMENTS RELATING TO CARBON CAPTURE AND STORAGE

COMMENCING 1 JULY 2015

Schedule 2 provides amendments to complete NGERS guidance for the estimation of fugitive emissions from Carbon Capture and Storage (CCS) operations.

Part 3.4 – Carbon Capture and Storage – Fugitive Emissions

Part 3.4 provides high level principles based approaches for the estimation of fugitive emissions from CCS operations.

Due to the evolving nature of CCS in Australia, NGERS guidance for the estimation of fugitive emissions from CCS operations methods is high level and generic.

It is recognised that industry best practice should be applied to estimating fugitive emissions wherever possible, and that no additional regulatory burden be imposed. Existing data produced for monitoring, reporting and verification (MRV) regimes and approvals already in place under state and commonwealth CCS legislative instruments should be utilised wherever possible to meet NGERS reporting obligations, and applied to a high level “carbon accounting” approach. It is not, for example, proposed that MRV activities be used to directly measure fugitive emissions from storage formations.

Additional detailed guidance on the interpretation and application of CCS methods will also be provided in an updated Technical Guidelines. This will include examples and further assist reporters to understand how the NGERS methods are applied to their unique CCS operations.

Stakeholder feedback in response to proposed amendments released in May 2014 (as part of the Exposure Draft process for the NGER (Measurement) Amendment Determination 2014) has been incorporated where appropriate, with the department proposing minor refinements to existing methods for estimating fugitive emissions from the capture and transport components of CCS operations.

These include the adoption of the term “greenhouse gas substance”, aligning the determination with existing commonwealth and state legislative instruments for licensing CCS operations.

These amendments are intended to commence on 1 July 2015 and apply to the 2015-2016 financial year. The amendments would affect NGER reports to be submitted by corporations in October 2016.

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Commentary

1 1.8 Provides definition for “greenhouse gas substance”, aligning the definition with the Offshore Petroleum and Greenhouse Gas Storage Act 2006, and with state based CCS legislative instruments.

2 – 44, 46 – 49, 51 - 66

1.11 1.19A 1.19B 1.19B(1) 1.19B(1)(a) 1.19B(1)(b) 1.19B(2)(a) 1.19(2)(a)(i) 1.19B(2)(a)(ii) 1.19B(2)(a)(iii) 1.19B(2)(b) 1.19B(2)(b)(i) 1.19B(2)(b)(ii) 1.19B(2)(b)(iii) 1.19B(3) 1.19C 1.19C(a) 1.19C(b) 1.19D 1.19E 1.19E(1) 1.19E(2) 1.19E(2)(a) 1.19E(2)(b) 1.19E(3) 1.19E(4) 1.19E(5) 1.19E(6) 1.19E(6) 1.19F 1.19F(1) 1.19G 1.19H 1.19H(1) 1.19H(2) 1.19I 1.19I(2) 1.19I(3)

Adoption of term “greenhouse gas substance” in place of “carbon dioxide”. Recognises that the CCS stream will routinely include trace amounts of other greenhouse gases such as methane.

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Commentary

Division 3.4.2 (heading) 3.89 3.90(1) 3.90(2) 3.90(3), subdivision 3.4.2.2 (heading) 3.91 subdivision 3.4.2.2 (heading) 3.92

45, 50 1.19GA 1.19N

BBB provision for the use of industry best practice moved.

67 3.93 3.94

Provides methods for the injection of “greenhouse gas substances”.

3.95 Provides for the use of methods from Section 5.7.1 of the API Compendium for the estimation of fugitive emissions from deliberate releases associated during the injection component of CCS.

3.96 3.97

Provides methods based on for the estimation of fugitive emissions (other than deliberate releases from process vents, system upsets and accidents) associated during the injection component of CCS.

Mirrors existing provisions for natural gas production where carbon dioxide is often injected into reservoirs as part of the normal operational practice of gas extraction.

3.98 3.99 3.100

Provides additional high level principles based approaches for the estimation of fugitive emissions associated with the long term geological storage components of CCS.

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