Purpose · Web viewThese include the adoption of the term “greenhouse gas substance”, aligning the Determination with existing commonwealth and state legislative instruments for

Exposure Draft

National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No 2)

Departmental Commentary

May 2015

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© Commonwealth of Australia, 2015.

National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No 2) 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 2) 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.......................................................................................................................3

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

Overview of the NGER (Measurement) Determination 2008..................................5

Attachment A: Explanation of the NGER (Measurement) Amendment Determination 2015 (No. 2)........................................................................................8

Schedule 1— Fugitive emissions and scope 2 emissions COMMENCING 1 JULY 2015...................................................................................................................9

Chapter 1: General..................................................................................................9

Part 1.1 - Preliminary...........................................................................................9

Chapter 3: Fugitive Emissions..............................................................................9

Part 3.2 Coal mining – fugitive emissions........................................................9

Part 3.3 Oil and natural gas – fugitive emissions..........................................10

Chapter 7—Scope 2 emissions...........................................................................10

Schedule 2—carbon capture and storage.............................................................11

Part 3.4 – Carbon Capture and Storage – Fugitive Emissions.....................11

Schedule 3 — Biological treatment of solid waste...............................................15

Chapter 1: General................................................................................................15

Part 1.1 - Preliminary.........................................................................................15

Chapter 5: Waste...................................................................................................15

Part 5.2 Solid waste disposal in land..............................................................15

Schedule 4 — Application and transitional...........................................................16

Chapter 9...............................................................................................................16

Part 1.1 - Preliminary.........................................................................................16

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.

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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 NGER system 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.2) are restricted in scope.

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

Refined guidance on the application of methods for estimating fugitive emissions of coal mine waste gas,

Inclusion of additional Method 2 for estimating fugitive emissions from oil and gas operations,

Clarification of methods for the estimation of scope 2 emissions from the consumption of purchased electricity by network operators,

Improved consistency in the application of methods for estimating emissions from composting facilities,

Finalisation of additional methods to complete NGER system guidance for the estimation of emissions from carbon capture and storage (CCS) activities, and

Annual update of scope 2 emission factors reflecting changes within the National Electricity Market in the last financial year.

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.2) which will be a legislative instrument for the purposes of the Legislative Instruments Act 2003 (Cwlth).

Schedule 1 and 2 of this Amendment Determination is 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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Schedule 3 of this Amendment Determination is intended to commence on 1 July 2016 and apply to the 2016-2017 financial year. The amendments would affect NGER reports to be submitted by corporations in October 2017.

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Information for respondents - NGER (Measurement) Amendment Determination 2015 (No.2)

28 May 2015Consultation draft available on the Department of the Environment’s website

12 June 2015 Submissions on the consultation draft close

1 July 2015NGER Measurement Amendment Determination 2015 (No.2) scheduled for commencement.

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]

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);

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mailto:[email protected]

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 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 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.

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.

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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. 2)

The draft National Greenhouse and Energy Reporting Measurement Amendment Determination 2015 (No.2) 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.2).

Item 2 – Commencement

This item provides for the amendments in Schedule 1 and 2 to commence on 1 July 2015.

This item provides for the amendments in Schedule 3 to commence on 1 July 2016.

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, 2, 3 and 4

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.2).

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SCHEDULE 1— FUGITIVE EMISSIONS AND SCOPE 2 EMISSIONS

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.

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.

Chapter 1: General

Part 1.1 - Preliminary

Part 1.1 updates definitions.

Item NGER (Measurement) Determination Reference

Commentary

1 1.8 Refines the definition of applicable State or Territoy legislation to support amendments to Part 3.2

Chapter 3: Fugitive Emissions

Part 3.2 Coal mining – fugitive emissions

Part 3.2 updates technical guidance for the direct measurement of emissions from underground coal mines.


Commentary

2, 3, 4, 5 3.6(2)(b), 3.6(2), 3.13

Provides refined guidance on the calibration requirements for periodic continuous monitoring of emissions released from the extraction of coal from an underground mine.

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Part 3.3 Oil and natural gas – fugitive emissions

Part 3.3 provides additional Method 2 guidance for the estimation of fugitive emissions associated with flaring gas with hydrocarbon concentrations significantly different to that described for Method 1.


Commentary

6 3.43(1)(b) and (c)

Provides for Method 2 for estimating emissions of methane and nitrous oxide released associated with oil or gas exploration (flared) emissions.

7, 8, 9 3.45 3.45(2) 3.45

Includes the Method 2 for estimating emissions of methane and nitrous oxide emissions.

10, 11 3.51(1)(c) and (c)

3.55

Provides for Method 2 for estimating emissions of methane and nitrous oxide released associared with crude oil production (flared).

12 3.62(4)(b) and (c)

Provides for Method 2 for estimating emissions of methane and nitrous oxide released associared with crude oil refining.

13 3.83 (3)(b) and (c)

Provides for Method 2 for estimating emissions of methane and nitrous oxide released associared with natural gas production.

Chapter 7—Scope 2 emissions

Provides methods for the determination of scope 2 emissions from the consumption of purchased electricity.


Commentary

14, 15 7.1 (2), 7.2(3), 7.3(3)

Clarifies that the Chapter also applies to a facility the operation of which is constituted by an electricity

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Commentary

transmission network or distribution network that consumes electricity through electricity losses.

Part 6 Indirect (scope 2) emission factors from consumption of purchased electricity from grid

Item Commentary

16 Annual update of scope 2 emission factors reflecting changes within the National Electricity Market in the last financial year.

Note these are premilinary factors prepared for exposure ahead of source data finalisation, may be subject to minor refinements.

SCHEDULE 2—CARBON CAPTURE AND STORAGE


Schedule 2 provides amendments to complete NGER system (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.

It is recognised that industry best practice should be applied to estimating fugitive emissions wherever possible, and that no undue 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.

Additional detailed guidance on the interpretation and application of CCS methods will also be provided in an updated Technical Guidelines.

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) and December 2014 (as part of the Exposure Draft process for

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the NGER (Measurement) Amendment Determination 2015 (No 1)) 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.



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)

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

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) 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.

3.91 3.92

Provides an additional Method 2 for the estimation of fugitive emissions from the transport of supercritical CO2 captured for the purposes of permanent geological storage.

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

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Commentary

emissions from deliberate releases associated with the injection component of CCS.

3.96 3.97

Provides methods for the estimation of fugitive emissions (other than deliberate releases from process vents, system upsets and accidents) associated with 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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SCHEDULE 3 — BIOLOGICAL TREATMENT OF SOLID WASTE


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 3 provides for the inclusion of all composting facilties exceeding the reporting threshold of 10,000 tonnes CO2-e.


Chapter 1: General




Commentary

1, 2 1.8, 1.3(4)(d) Provides an additional definition for biological treatment, and refines the description of the catagories of scope 1 emissions to include other facilities that release emissions associated with waste.

Chapter 5: Waste

Part 5.2 Solid waste disposal in land

Part 5.2 aligns reporting obligations for composting facilities both within and outside of a landfill facility boundary.


Commentary

1 - 9 5.2, 5.3(1), 5.3(a) and (b), 5.3(1)(c) and (d), 5.22,

Extends the coverage of methods for estimating emissions from composting operations to include all composting facilities that exceed the reporting

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Commentary

5.22(1) and (2), 5.22AA5.22

threshold.

SCHEDULE 4 — APPLICATION AND TRANSITIONAL

Ensures that the amendments made by the National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No. 1) and amendments made by the National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No. 2) (which both commence on 1 July 2015) are only applied in relation to reporting for financial years from 1 July 2015 onwards.

Since the reporting requirements for the financial year 2014/15 only arise during the following financial year 2015/16, there might otherwise be an argument that the amendments have to be applied to measurements made in the financial year 2014/2015.

Chapter 9




Commentary

1 9.3, 9.4 Clarifies that amendments made by Schedules 1 to the National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No. 1) apply in relation to the financial year starting on 1 July 2015 and later financial years

Clarifies that amendments made by Schedules 1 and 2 to the National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No. 2) apply in relation to the financial year starting on 1 July 2015 and later financial years

2 9.5 Clarifies amendments made by Schedule 3 to the

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Commentary

National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2015 (No. 2) apply in relation to the financial year starting on 1 July 2016 and later financial years.

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Documents

Purpose · Web viewThese include the adoption of the term “greenhouse gas substance”, aligning the Determination with existing commonwealth and state legislative instruments for