Issued by authority of the Minister for Energy and Emissions Reduction
National Greenhouse and Energy Reporting Act 2007
National Greenhouse and Energy Reporting (Measurement) Amendment (2020 Update) Determination 2020
Background
The National Greenhouse and Energy Reporting Act 2007 (the Act) provides a framework for the reporting of emissions, energy production and consumption in Australia. It also provides for the Safeguard Mechanism to place limits on the net emissions of the largest facilities in Australia.
The National Greenhouse and Energy Reporting (Measurement) Determination 2008 (“the Determination”) was made under section 10 of the Act, which provides for the Minister to determine methods, or criteria for methods, for the measurement of (a) greenhouse gas emissions; (b) the production of energy; and (c) the consumption of energy. An overview of the Determination is provided below.
Overview of the National Greenhouse and Energy Reporting (Measurement) Determination 2008
The NGER (Measurement) Determination 2008 (“the Determination”) provides the methods for the estimation of greenhouse gas emissions and the production and consumption of energy. The scope of the Determination follows international classification systems and includes emissions from:
· the combustion of fuel for energy;
· the extraction, production, flaring, processing and distribution of fossil fuels and carbon capture and storage;
· industrial processes where a mineral, chemical or metal product is formed using a chemical reaction that generates greenhouse gases as a by-product as well as emissions of hydrofluorocarbons and sulphur hexafluoride resulting from their use by certain industries; and
· waste disposal – either in landfill, as management of wastewater or from waste incineration.
The most significant source of emissions in Australia is from fuel combustion, which accounts for over 70 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 Intergovernmental Panel on Climate Change (IPCC) categories ‘Agriculture’ and ‘Land Use, Land Use Change and Forestry’. Emissions from fuel combustion by land based industries are, nonetheless, covered by the 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, as adopted by the Parties to the UN Framework Convention on Climate Change, its Kyoto Protocol and Paris Agreement.
The Determination provides four different classes of methods for the estimation of emissions for most emissions sources.
· 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 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 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.
Purpose and operation
The purpose of the National Greenhouse and Energy Reporting (Measurement) Amendment (2020 Update) Determination 2020 (the Instrument) is to:
· Update emission factors based on updated Global Warming Potentials (GWPs), which are used to convert emissions values of non-carbon dioxide gases into carbon dioxide equivalent values, in order to align the NGER scheme with the Australian Government’s implementation of the Paris Agreement; and
· Update emission factors used to estimate emissions resulting from the consumption of electricity purchased or lost from the grid (‘scope 2 emissions’) based on the latest available data.
The Instrument will commence on 1 July 2020 and apply to the 2020-21 financial year. It will affect NGER reports to be submitted by corporations by 31 October 2021. Details of the amendments contained in the Instrument are provided below.
Further details of the Instrument are outlined in Attachment A.
The Instrument is a legislative instrument for the purposes of the Legislation Act 2003.
A statement of the Instrument’s compatibility with human rights is set out in Attachment B.
Consultation
The substance of the amendments made by the Instrument was released for public consultation from 29 May to 10 June 2020. Five submissions were received; no submissions raised substantive issues with the proposed amendments. Definitions in item 1 below (of terms relating to amendments to be made by the National Greenhouse and Energy Reporting Amendment (2020 Measures No.1) Regulations 2020 to matters to be identified under Part 2 of Schedule 3 of the NGER Regulations (Oil or gas)) were included following consideration of a submission from the Australian Petroleum Production & Exploration Association (APPEA).
Regulatory Impact
The regulatory impacts of these amendments have been assessed as minor and not requiring a Regulation Impact Statement by the Office of Best Practice Regulation (ref 26344).
ATTACHMENT A
National Greenhouse and Energy Reporting (Measurement) Amendment (2020 Update) Determination 2020
Section 1 – Name of Determination
This section provides that the title of the Instrument is the National Energy Reporting (Measurement) Amendment (2020 Update) Determination 2020.
Section 2 – Commencement
This section provides for the amendments to commence on 1 July 2020.
Section 3 – Authority
This section outlines that the Determination is made under subsection 10(3) of the National Greenhouse and Energy Reporting Act 2007. The power to make legislative instruments under this subsection includes the power to amend or revoke instruments that have already been made, with any doubt about this resolved by subsection 33(3) of the Acts Interpretation Act 1901.
Section 4 – Schedules
The amendments to the Determination are outlined at Schedule 1.
Schedule 1 – Amendments
Definitions
Item 1 inserts into section 1.8:
· a definition of GWPmethane that incorporates the existing definition of ‘Global Warming Potential’, referencing the National Greenhouse and Energy Reporting Regulations 2008 as in force from time to time. From 1 July 2020 this value will be 28 and the definition will continue to reflect the relevant value if the regulations are updated in the future; and
· definitions of the following terms relating to amendments to be made by the National Greenhouse and Energy Reporting Amendment (2020 Measures No.1) Regulations 2020 to matters to be identified under Part 2 of Schedule 3 of the NGER Regulations (Oil or gas):
· natural gas gathering and boosting;
· natural gas gathering and boosting pipeline;
· natural gas gathering and boosting station;
· natural gas processing station; and
· produced water.
Updated emission factors to reflect AR5 Global Warming Potentials
Items 2 to 42 and item 44 update emission factor values throughout the Measurement Determination to reflect updated Global Warming Potentials (GWPs), which are used to convert emissions values of non-carbon dioxide gases into carbon dioxide equivalent values.
These amendments align the NGER scheme with the Australian Government’s implementation of the UN Framework Convention on Climate Change Paris Agreement, the Parties to which adopted the GWPs provided by the Intergovernmental Panel on Climate Change’s (IPCC’s) Fifth Assessment Report (AR5) for the purpose of greenhouse gas inventory reporting.
Updates made by the following items represent improved emission estimation methodologies in light of most recent international guidelines in addition to revisions for updated GWP values:
· Item 38- Subsection 5.31(6)
· Item 39- Subsection 5.31(7) (Item 1- Enclosed waters)
Item 2 repeals a definition in section 3.5 to update coal mining emissions factors related to methane.
Item 3 includes a reference to the new term GWPmethane in subsection 3.6(1).
Item 4 updates an emissions factor related to post mining activities in subsection 3.17(2).
Item 5 updates emissions factors related to the extraction of coal in section 3.20.
Item 6 includes a reference to the new term GWPmethane in subsection 3.21(1).
Item 7 substitutes a table in subsection 3.44(2) to update values related to methane and nitrous oxide relevant to oil and gas extraction.
Item 8 includes a reference to the new term GWPmethane in subsections 3.46B(1) and (4).
Item 9 updates an emissions factor related to crude oil in subsection 3.49(1).
Item 10 substitutes a table in subsection 3.49(2) to update values related to crude oil production.
Item 11 substitutes a table in subsection 3.52(2) to update values related to crude oil production.
Item 12 updates an emissions factor related to the transport of crude oil in section 3.59.
Item 13 updates emissions factors related to crude oil refining in section 3.63.
Item 14 substitutes a table in subsection 3.67(2) to update values related to crude oil refining.
Item 15 updates an emissions factor related to natural gas production and processing in subsection 3.72(1).
Item 16 substitutes a table in subsection 3.72(2) to update values related to natural gas production and processing.
Item 17 updates an emissions factor related to natural gas transmission in section 3.76.
Item 18 substitutes a table in subsection 3.80(3) to update values related to natural gas distribution.
Item 19 substitutes a table in subsection 3.81A(3) to update values related to natural gas distribution.
Item 20 substitutes a table in subsection 3.85(2) to update values related to natural gas distribution.
Item 21 includes a reference to the new term GWPmethane in section 3.91.
Item 22 includes a reference to the new term GWPmethane in section 3.92.
Item 23 substitutes a table in subsection 4.47(2) to update values related to nitric acid production.
Item 24 updates an emissions factor related to aluminium production in section 4.85.
Item 25 updates an emissions factor related to aluminium production in section 4.89.
Item 26 includes a reference to the new term GWPmethane in subsections 5.4(1) and (3).
Item 27 substitutes an equation related to landfill emissions to reference the new term GWPmethane in subsection 5.4B(3).
Item 28 repeals a definition consequential upon the amendment in item 27.
Item 29 substitutes an equation related to landfill emissions to reference the new term GWPmethane in section 5.4D.
Item 28 repeals a definition consequential upon the amendment in item 29.
Item 31 includes a reference to the new term GWPmethane in subsections 5.15(1) and (4).
Item 32 substitutes an equation related to landfill emissions to reference the new term GWPmethane in subsection 5.15A(3).
Item 33 substitutes a table in subsection 5.22(2) to update values related to the biological treatment of solid waste.
Item 34 includes a reference to the new term GWPmethane in subsection 5.22B(1).
Item 35 includes a reference to the new term GWPmethane in subsections 5.25(1) and (3).
Item 36 includes a reference to the new term GWPmethane in subsection 5.26(1).
Item 37 updates an emissions factor related to waste water handling in subsection 5.26(2).
Item 38 updates an emissions factor related to waste water handling in subsection 5.31(6).
Item 39 substitutes a table in subsection 5.31(7) to update values related to waste water handling.
Item 40 includes a reference to the new term GWPmethane in subsections 5.42(1) and (3).
Item 41 updates an emissions factor related to waste water handling in subsection 5.42(6).
Item 42 updates an emissions factor related to waste water handling in subsection 5.42(7).
Item 44 substitutes Parts 1 to 4 of Schedule 1 to update fuel combustion values related to methane and nitrous oxide.
Update to scope 2 emission factors
Item 45 updates emission factors used to estimate emissions resulting from the consumption of electricity purchased or lost from the grid (‘scope 2 emissions’) in Part 6 of Schedule 1 of the Measurement Determination to reflect changes within the National Electricity Market, Northern Territory and South West Interconnected System in the last financial year.
Application of amendments
Item 43 provides that amendments made by the Instrument apply in relation to the financial year starting on 1 July 2020 and later financial years. Reports for the financial year starting 1 July 2020 are due by 31 October 2021. Reports for the financial year starting on 1 July 2019 are not impacted by these changes.