Where will COVID-19 take the Australian GHG emissions? An overview of historical NGER data

Written by Simon Welchman,  Lisa Smith and Plistina Almeida

 

The coronavirus pandemic raises a tricky question for climate and environmental scientists: Will Australia emit more or less greenhouse gases into the atmosphere than we did last year?

We previously showed that the impact of COVID-19 on greenhouse gas emissions had been immediate in our review published in May/20. Whilst a reduction of the Global GHG emissions is expected for 2020, a closer look at the GHG emissions, energy production and consumption summary produced by the Clean Energy Regulator for the 2018-19 provides greater insights into Australia’s likely 2019-20 emissions.

In this article, we’ll review some of the highlights of the 2018-19 NGER scheme data. We’ll also discuss how companies can benefit from this energy data compilation process to help minimise their carbon emissions and mitigate the risk to the environment. We’ll finish with some predictions on what can be expected from the 2019-20 reports accounting for the impact of COVID-19.

The National Greenhouse and Energy Reporting (NGER) Scheme is a national framework for reporting and publishing company information about greenhouse gas emissions, energy production, energy consumption and other information specified under NGER legislation.

According to the Australian Clean Energy Regulator, the objectives of the NGER scheme are to:

  • inform government policy
  • inform the Australian public
  • help meet Australia’s international reporting obligations
  • assist Commonwealth, state and territory government programmes and activities, and
  • avoid duplication of similar reporting requirements in the states and territories.

Under the National Greenhouse and Energy Reporting (NGER) Scheme companies report their annual carbon emissions to assist in the management of Australia’s greenhouse gas emissions. Companies are required to compile corporate GHG emissions for the financial year and lodge the report before 31 October every year. The scheme covers approximately 60% of Australia’s total emissions. Some important sectors of the economy, including agricultural, forestry, private vehicle transport and residential sectors, are not collected under the NGER scheme and are, therefore, not included in this data.

Companies that trigger certain thresholds are required to report emissions, energy consumption and energy production according to the applicable two-scope-reporting method:

  • Scope 1 – referred to as direct emissions because it involves greenhouse gas emissions. These are the emissions released to the atmosphere as a direct result of an activity
  • Scope 2 – referred to as indirect emissions. These are greenhouse gas emissions released to the atmosphere from the indirect consumption of an energy commodity.

Overview of the 2018-19 Results

The NGER 2018-19 dataset includes reports from 418 corporations. These corporations reported a total of:

  • 338 million tonnes of scope 1 greenhouse gas emissions (carbon dioxide equivalent)
  • 88 million tonnes of scope 2 greenhouse gas emissions (carbon dioxide equivalent)
  • 3,931 petajoules net energy consumed.

These results show a slight (2 million tonnes or 0.6%) increase in scope 1 emissions compared to the 2017-18 results. According to the Clean Energy Regulator (2020), this increase is mainly due to:

“…increases in the liquified natural gas (LNG) and oil and gas production (8 million tonnes) and metal ore mining (0.9 million tonnes).

This increase can largely be attributed to an increase in production of LNG, primarily in Western Australia and Northern Territory.

Scope 1 emissions from electricity generation and coal mining decreased in 2018-19.”

Electricity Sector

The electricity sector remains the largest emitting industry in Australia, being responsible for 48.8% of scope 1 emissions.

Fortunately, emissions from the electricity sector have decreased consistently over the last 4 years as shown in the graph below. The Clean Energy Regulator attributes this reduction largely to a “…switch in fuel sources, with less generation from brown and black coal, and more generation from less emissions-intensive sources like natural gas and renewable energy”  (Clean Energy Regulator, 2020). The graph below displays a consistent reduction in scope 1 emissions from the electricity sector in the past 4 years.

 

Figure 1 – Scope 1 emissions within the Electricity Industry – 2015-16 to 2018-19

 

Another positive change is that in 2018-19 renewables became the second largest electricity generation fuel source (17%). Black coal continues to be the largest fuel source (53%) (Clean Energy Regulator, 2020).

There is a lot of activity in the renewable energy sector driven by both government incentives and perhaps more significantly by organisations due to future-proofing and corporate social responsibility. We can expect renewables to be a growth sector in the coming years, displacing more greenhouse gas-intensive fuels from the electricity grid.

States and territories

There has been little variation in the share of scope 1 emissions by state/territory over the past 5 years. A slight increase in Victoria’s share was offset by a similar reduction in Queensland’s emissions. The graph below shows the breakdown of each state/territory contribution to Australian emissions.

Figure 2 – Reported Scope 1 Emissions share in Australia

 

Scope 1 emissions are released into the atmosphere as a direct result of an activity, or series of activities at a facility. Modest reductions in scope 1 emissions have occurred over the past 10 years. In 2018-19 there was a 0.58% increase in scope 1 emissions compared to 2017-18.

In the last 10 years, the role of renewable generation has become more significant with a new record being set in 2018-19 when renewables were responsible for 21% of the total fuel generation in the country according to the Department of Industry, Science, Energy and Resources. This percentage is larger than the one presented in the NGER results as the latter only shows results of the 418 corporations required to lodge a report. The average annual growth of the renewable power generation over the past 10 years (to 2017-18) is of the order of 5.4% (Department of Industry, Science, Energy and Resources 2020).

Scope 2 emissions are indirect greenhouse gas emissions from consumption of purchased electricity, heat or steam. High levels of scope 2 emissions are directly related to the purchase of electricity from the grid of a state or territory or some other external network provider.

Australia’s scope 2 emissions have been slowly reducing over the past 10 years. Scope 2 emissions in 2018-19 are 10.91% less than 2009-10.

Figure 3 – GHG emissions from 2008/09 to 2018-19 based on NGERs reports

Primary Fuel

In terms of NGER reporting, GHG emissions associated with electricity use are recorded as scope 2 emissions. Scope 1 emissions reported by the electricity sector are reported as scope 2 emissions by electricity users. In 2018/19, scope 2 emissions accounted for approximately 25% of GHG emissions. Scope 2 emissions reported under the NGER scheme have increased by approximately 2% in the last year. Indicating that the decrease in emissions in the electricity sector has been offset by an increase in electricity use by NGERs reporting corporations.

Figure 4 – Accumulated top 10 primary fuel sources in energy production

 

The following graph shows the number of facilities that used each fuel over the past 5 years. In 2019, diesel was used by the greatest number of facilities, followed by gas, which had previously been the most popular source of energy.

Figure 5 – Number of reporting facilities using various Primary Fuels from 2015 to 2019

What to expect from the 2019-20 Reports?

For electricity usage, work from home arrangements will likely result in reduced electricity usage in workplaces and increased electricity usage by households. According to AEMO, the National Energy Market (NEM) observed a reduction in operational demand within Q2 2020 of the order of 2% when compared with the same period last year (AEMO 2020). AEMO attributes this difference to a reduction in consumption of 2.1% and to an increase in rooftop PV usage of 1.2%.

Another significant contributor to scope 1 emissions is the consumption of fuel in motor vehicles. As discussed before, road traffic has significantly reduced in Australia after mobility restrictions measures came into place to prevent the spread of COVID-19. Petrol sales volumes across Australia were 43 per cent lower in April 2020 compared with monthly average sales in calendar year 2019, according to the ACCC (Australian Competition and Consumer Commission, 2020).

How can your company benefit from NGERs energy data compilation to minimise the emissions of greenhouse gases and mitigate the risk to the environment?

Katestone helps its clients use the NGER reports to go beyond compliance: we know that companies can derive value from the data. We have seen our clients develop and implement strategies for process improvement and reap the benefits in subsequent years.

Katestone’s NGER scheme services range from regular annual and interim reporting to developing customised tools to enable facilities to fulfill their reporting obligations in-house with limited support.

Many of Katestone’s clients elect to receive a succinct reference report that specify the methodologies used to calculate emissions, the base input data and historical emissions.

Detailed analysis of the data helps you make better management decisions, in order to target cost-effective mitigation strategies. Clients have used their NGERs reporting to pinpoint unexpected surges in energy usage and track its origins. They have then used the data to improve processes to reduce energy and emissions in the long run.

Our staff are up-to-date with NGER guidelines and methodologies, ensuring your emissions inventory is accurate and in accordance with the current requirements. We will minimise the work required by you to fulfil your reporting obligations, through both timely advice and providing reliable emissions and energy use data. A reliable NGER assessment is crucial when developing and tracking KPIs targeting greenhouse emissions and energy use.

You can find one of our case studies showing how we can take annual reporting to the next level.

Click here to find our Annual Reporting Capability Statement in PDF.

Notes about this article

The NGER data is made available by the Australian Clean Energy Regulator and the original version of the data can be found here. While no modifications were made to the data, filters were applied in order to create graphs and tables to inform our interpretation of the NGER data.

Some of the references used in this article can be found below:

 

Contact us here to discuss data collection, independent auditing or the lodgement of your 2019/20 NGER report.

This article featured in the Katestone’s Clear Skies 2020 Winter edition. Click here to view other featured articles.

Share on Social Media

Leave a Comment