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Tracking 2021 Q1 Report | or July, August and September 2020

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Under the Paris Agreement, the Australian Government has legally committed to reducing our emissions by 26-28% below 2005 levels by 2030. However, to ensure global warming remains under 2 degrees, independent body – the Climate Change Authority (CCA) – has proposed Australia set a national Science Based Target (SBT). This is a target calculated from Australia’s share of emissions for a 2◦C global outcome. Ndevr Environmental has used this target to model a quarterly emissions budget for Australia.

This report tracks Australia’s performance against our Paris target and the CCA’s carbon budget based on the latest available data, trends and industry movements for the months of July, August and September (Q1/FY2021). Our results are presented in tonnes of carbon dioxide equivalents (t CO₂-e). 1 t CO₂-e is roughly equal to the emissions of a standard 5-seat passenger vehicle driving around 5,400 km.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]

Headline Results

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• Emissions for Q1/FY2021 are projected to be 124.2 Mt CO2-e, a 1.5 Mt CO2-e increase on last quarter. This represents a reduction of 9.1 Mt CO2-e on the corresponding quarter the year prior (Q1/FY2020).
• Emissions for the 12-month period to 30 September 2020 declined by around 4.2% on the previous 12-month period.
• If emissions continue to decline at a rate of 4.2% per annum as they did in the year ending September 2020, the 2030 Paris target would be met around 2023. This is the second consecutive quarter where emissions have been below the quarterly Paris Agreement trajectory. However, emissions are expected to increase towards pre-COVID levels as the economy recovers.
• If emissions follow the historical trend (represented by the dashed olive line in the figure below), the upper Paris target would not be met until 2039, with the lower target being achieved in 2042.
• Electricity emissions for Q1/FY2021 are projected to be the second lowest on record (dating back to 2002), with renewable energy generation across the NEM states achieving the highest penetration rate on record.

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Road to Paris – Highlights So Far

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• Quarterly emissions fell below the Paris trajectory by an average of 2.2 Mt CO₂-e for the first seven quarters of the agreement (from Q2/FY2016 to Q4/FY2017).
• Throughout the next 11 quarters from Q1/FY2018 to Q3/FY2020, quarterly emissions averaged 2.7 Mt CO₂-e above the Paris trajectory, putting a significant dent in our carbon budget.
• Increases in stationary energy, transport, fugitive, industrial and waste emissions have all but nullified the progress made in the electricity, agriculture and LULUCF sectors.
• The Climate Change Performance Index ranks Australia 54^th in terms of greenhouse gas emissions, renewable energy, energy use and climate policy.

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Australia’s Quarterly Emissions Projections to a 2 Degree Target

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Figure 1: Australia’s Quarterly Emissions Projections to a 2 Degree Target, 2005 – 2050

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Figure 2: Australia’s Quarterly Emissions Projections to a 2 Degree Target, 2013 – 2020

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Detailed Findings

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Increased Renewable Generation Leads to Reduced Electricity Emissions, Partially Offset by Rising Stationary Energy

For the second consecutive quarter, the National Electricity Market (NEM) has achieved its highest ever quarterly renewable energy penetration in Q1/FY2021, achieving 26.4% and beating the previous all-time high by 0.7% (Q4 FY20). This contributed to a significant drop in electricity related emissions of 2.16 Mt CO₂-e nationwide.

While total energy generation in the NEM has remained reasonably stable since 2005, rising renewable energy penetration has continued to produce a downward trend in emissions from the Australian electricity sector. This trend in conjunction with the impact of COVID-19, has contributed to a gradual alinement with Australia’s Paris commitments compared to previous quarters. It has also been observed that as electricity related emissions have been reducing, stationary energy emissions have adopted the opposite trend, particularly in recent years.[/vc_column_text][vc_single_image image=”32632″ img_size=”full” alignment=”center”][vc_column_text]

Figure 3: Increasing Renewable Generation and Reducing Electricity Emissions

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Figure 4: Reduced Electricity Emissions Partially Offset by Rising Stationary Energy

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Electricity Analysis for the National Energy Market

Electricity emission projections for Q1/FY2021 were the lowest on record across the entire data set, dating back to 2001 (39.5 Mt CO₂-e).

With quarterly electricity demand relatively stable across the NEM, the decline has been driven by an increase in renewable energy generation from wind power, hydro power, utility-scale solar and rooftop solar, as well as the COVID-19 pandemic response including lockdowns.

Renewable energy generation across the NEM states for the period was 26.4% (including rooftop solar), the highest penetration rate on record for renewable energy.

Quarterly black coal generation has also risen by 1.2 TWh, contributing to a 73.8% fossil fuel powered grid.

Electricity generation in the NEM for the year to September 2020 reduced by 1% or 2.2 TWh below the previous year.

For Q1/FY2021, results for the NEM states are as follows:

• NSW generated 17.6 TWh of electricity with 88% from black coal, 1.1% from gas and 18.3% from renewable sources including wind, hydro, utility-scale solar and rooftop solar. NSW’s renewable energy percentage has fallen short by only 1% on its all-time high, which occurred in Q2 FY2020.
• QLD generated 15.2 TWh of electricity with 74% from black coal, 11% from gas and the balance from renewable sources including utility-scale solar, rooftop solar, wind and a small portion of hydro energy. QLD’s renewable energy percentage increased almost 2% on the previous quarter to achieve its highest ever rate of 15.8%.
• VIC generated 12.1 TWh of electricity with 70% from brown coal, 4% from gas and 26% from renewable sources including wind, hydro, rooftop solar and utility-scale solar. VIC’s renewable energy penetration is its highest on record, beating the previous high by 2% (Q1 FY2020).
• SA generated 3.9 TWh of electricity with 47% from gas and 53% from renewable sources such as wind, rooftop solar, utility-scale solar and battery (discharge). SA’s renewable energy percentage has dropped 2% on last quarter and 7% on its all-time high (Q3 FY2020) but is at its fourth highest on record.
• TAS generated 2.9 TWh of electricity with 98.2% from renewable sources such as hydro, wind and rooftop solar and the balance from gas. TAS’s renewable energy percentage for Q1 FY2021 is 1.3% lower than Q4 FY2020, but has still not dropped below 78% since records began in 2005.

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Australia’s Quarterly Emissions By Sector

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2 Degree Budget Expenditure to Date

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5^th Anniversary of the Paris Agreement – Looking Back on our Performance

It has been five years since the Australian Government entered into the Paris Agreement, pledging to reduce greenhouse gas emissions by 26 – 28% below 2005 levels by 2030. With 10 years left to honour this commitment, it is an important time to reflect on our progress to date and assess the ups and downs which will ultimately decide if the goal is met. Headline results of the journey so far are listed below along with some international highlights:

• We started well, with quarterly emissions landing below the Paris trajectory by an average of 2.2 Mt CO₂-e for the first seven quarters of the agreement (from Q2/FY2016 to Q4/FY2017).
• Throughout the next 11 quarters from Q1/FY2018 to Q3/FY2020, quarterly emissions averaged 2.7 Mt CO₂-e above the Paris trajectory, putting a significant dent in our carbon budget.
• Australia has not fallen below its quarterly Paris trajectory by more than 4.1 Mt CO₂-e, which occurred in Q4/FY2016. Q4/FY2020 reached 4.04 Mt CO₂-e below budget largely due to the COVID-19 pandemic response.
• Q1/FY2021 projections represent the second quarter since Q4/FY2017 where Australia has come in under budget.
• The NEM has consistently made up approximately 35% of Australia’s quarterly emissions since entering the Paris Agreement, with a maximum of 38% and minimum of 32%.
• Looking at the net changes in emission sources from December 2015 to December 2019 (pre-COVID levels), increases in stationary energy, transport, fugitive, industrial and waste emissions have all but nullified the progress made in the electricity, agriculture and LULUCF sectors. The former group of sources collectively increased by 6.8 Mt CO₂-e while the latter decreased by 6.9 Mt CO₂-e.
• The Climate Change Performance Index, which covers 90% of global emissions, ranks Australia 54^th in terms of greenhouse gas emissions, renewable energy, energy use and climate policy. This places us above Kazakhstan, Chinese Taipei, Canada, Iran, Saudi Arabia and USA only.
• Sweden, UK and Denmark are at the top of the rankings, with no country deemed to be doing enough to prevent dangerous climate change.

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Figure 9: Australia’s Quarterly Performance Against the Paris Agreement

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Figure 10: NEM Emissions as a Proportion of Total

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Figure 11: Emission Source Performance Since the Paris Agreement

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Figure 12: Net Change in Emission Sources Since the Paris Agreement

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Figure 13: Quarterly Emissions Compared to Upper and Lower Paris Targets

[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]This report has been compiled by Ndevr Environmental Pty Ltd, using the latest information available from: AEMO, Office of the Chief Economist, Australian Petroleum Statistics and the Department of the Environment and Energy’s National Greenhouse Gas Inventory (NGGI) reports. Detailed electricity generation data for the National Energy Market (NEM) are sourced from Open NEM.
GDP trends are sourced from Trading Economics, information about Australian car use is sourced from the National Transport Commission, 2018 and the Australian Bureau of Statistics. Emission factors are sourced from National Greenhouse and Energy Reporting (Measurement) Determination 2008.
Government and CCA target information is available at the following sources:
[1] – Australian Government (2015), Australia’s 2030 Climate change target, Commonwealth of Australia
[2] – CCA (2014), Reducing Australia’s Greenhouse Gas Emissions – Targets and Progress Review, Final Report (page 9)
This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process, nor may any other exclusive right be exercised, without the permission of Ndevr Environmental, L2 27-31 King Street, Melbourne VIC 3000; 2020[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text]

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