MATERIAL FLOW ACCOUNT IN MONGOLIA
Workshop on Environment Statistics for East and North-
East Asian Countries Incheon, Korea
13-15 March, 2017
Enkhzaya Dambiijantsan
Senior Statistician
Economic Statistics Department,
National Statistics Office, Mongolia
2 2
I. Overview
• MFA, significance
• Policy related issues
• Data source, definition
II. Results of experimental MFA, Mongolia, 2005-2015
III. Challenges/constraints
IV. Way forward
OUTLINE
What is MFA?
•Material flow account: the framework for compiling statistics involving flows of materials from natural resources to national economy.
• compiled in physical units (tons)
•The general purpose of material flow accounts is to describe the interaction of domestic economy with natural environment and the rest of the world economy in terms of material flows.
Why need to compile/significance? – MFA can be used to analyze interactions between environment and economy and estimate aggregate
economic indicators
– Comprehensive set of information on use of natural resources;
– Produce time series data on physical structure of the economy and its change
I. OVERVIEW
Why Mongolia started with working this topic?/Policy related issues
Green Development Policy of Mongolia, 2014
Monitoring and quantifying of the implementation of the green development policy
specific challenges: natural resource based economy, inefficient use of energy and resource and wasteful consumption, and vulnerability to climate change
National Program for Development of Official Statistics, 2016-2020
the Mongolia Parliament approved the National Program for Development of Official Statistics, which initiated data collection and analysis necessary to support environmentally sustainable growth
The program specifies that accounts for environmental-economic accounts will be constructed, data sources will be generated, and relevant estimates will be made
Therefore, the government decided to focus its initial efforts on the accounts most relevant to current issues
The material flow will focus on natural resources exploitation and usage, an important part of Mongolian economy
What is required to begin the work/step by step progress?
Study the handbook of SEEA, related manuals, guidelines, methodologies/ classifications
o SEEA Central Framework 2012
o SEEA Applications and Extensions
o Compilation guide of material flow accounts, Eurostat 2013
o National and international conversion factors
Identify priorities/ selection of accounts
Assess current data availability
Cooperation with stakeholders/ministries and agencies
o awareness raising within Government
o Technical training
Collect data
Piloting/compiling of accounts
Material Flow Account
Main categories: – Biomass
– Metal ores
– Non metallic minerals
– Fossil energy materials/ carriers
– Imports, Exports
Indicators based on Material Flow Account indicators Domestic Extraction Used (DEU) is the input from the natural environment to be used in
economy. DEU is the annual amount of raw materials (with the exception of water and air) extracted from the natural environment.
Physical Trade Balance (PTB) equals physical imports minus physical exports. The physical trade
balance is thus defined reverse to the monetary trade balance (which is exports minus imports)
Domestic Extraction
Used(DEU)
+
Imports
=
Direct Material Input (DMI)
-
Exports
=
Domestic Material
Consumption (DMC)
Direct Material Input (DMI) measures the direct input of materials for use in economy,
that is all materials that have economic value and are used in production and
consumption activities. DMI equals DEU plus imports.
Domestic Material Consumption (DMC) measures the annual amount of raw
materials extracted and used in national economy, plus all physical imports minus all
physical exports. DMC represents the part of all material inputs into economic system.
Material Intensity is defined as Domestic Material Consumption (DMC) to Gross
Domestic Product (GDP) ratio to indicate overall material efficiency of the economy.
Domestic Material Consumption per capita measures the total amount of materials
directly used by economy per capita.
Scope and definitions: •Used raw materials, materials: extracted raw materials, resources extracted for use of production and consumption in future
•Unused raw material, materials: extracted materials that are not, or, will not be used for economic activities.
•Biomass: biomass comprises organic non-fossil material of biological origin
•Metal ores and non-metallic minerals: comprise two main groups of mineral products and consists of materials are used in mining, construction and industrial sectors
•Trade balance in physical terms: determined by subtracting physical amount of materials exported exported from physical amount of materials imported.
Opposite of trade balance in monetary terms, which is determined by subtracting imports from exports
•Resource efficiency: determined as an inverse of the material intensity, or by dividing GDP by domestic material consumption.
Indicates how efficiency resources are used in production of goods and services to meet the market demand
Data sources:
– Agricultural, crop and forest statistics
– Environmental statistics
– Industrial statistics
– Construction statistics
– External trade statistics
– Agricultural census
– Household income and expenditure survey
– Administrative statistics
RESULTS OF EXPERIMENTAL MATERIAL FLOW ACCOUNTS, 2005-2015
Domestic Extraction Used, thousand tons Annual
average
growth, %
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total 49145 51160 60519 62858 68025 69701 83407 87419 100180 103458 104805 8.1
Biomass
35646 36554 43678 44425 47763 35897 40455 45537 49900 57785 62056 6.4
Metal Ores
2258 3609 4370 5263 5248 6494 8463 10389 9235 11305 10269 18.0
Non Metallic
minerals
2953 3050 3521 3170 1544 1706 3131 2337 11041 8741 6894 35.7
Fossil
energy
materials
8289 7947 8951 10000 13470 25604 31358 29156 30003 25627 25585 14.9
Table 1. Domestic Extraction Used (DEU) per category of materials, 2005-2015
In 2005, Mongolia extracted 49.1 million tons material from environment and used it
in economic activity. This number has increased twice or 55.7 million tons compared to
last decade.
72.5
71.5
72.2
70.7
70.5
51.5
48.7
52.1
49.6
55.9
59.2
4.6
7.1
7.2
8.4
7.7
9.3
10.1
11.6
9.2
10.9
9.3
6
6
5.8
5
2.3
2.4
3.6
2.7
11
6.4
6.6
16.9
15.5
14.8
15.9
19.5
36.7
37.6
33.4
29.9
24.5
24.4
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Biomass Metal ores Non metalic minerals Fossil energy materials
Figure 1. Structure of Domestic extraction used (DEU) per category of minerals, %, 2005-2015
Extraction of biomass’s share was 70.2-72.5% between 2005 and 2009. It reduced to 48.5-59.2% in 2010-2015, were mainly from
the increase of energy materials by 5.0-22.8 points in same years compared with previous years. The increase of extraction of
energy materials was related to the rise of coal extraction.
The share of extraction of non metallic minerals increased dramatically in 2013-2014. it is related due to increase of new road
kilometer, sand and gravel used for road construction was also increased.
Imports, thousand t. Annual
average
growth, %
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total 2650 3014 4935 6157 4737 5503 9405 10244 10949 9907 8410 15.7
Biomass
942 1080 2282 2600 1902 2226 3464 3726 4533 4158 3712 19.6
Metal Ores
238 268 401 615 335 487 1036 977 821 862 784 20.3
Non Metallic
minerals
779 895 1286 1892 1522 1691 2538 3267 3801 3097 1419 12.0
Fossil
energy
materials
599 678 843 901 804 890 2037 1924 1370 1266 1986 18.8
Other 92 93 122 149 175 210 329 349 424 524 509 19.7
Table 2. Imports per category of materials, thousand t, 2005-2015
In 2005, Mongolia imported 2.7 million tons of material. It reached 8.4 million tons in
2015 which increased by 3.1 times compared with 2005.
35.6
35.8
46.1
42.2
40.1
40.4
36.8
36.4
41.4
42
44.1
9
3.9
5.1
16
7.1
8.8
11
9.5
7.5
3.7
9.3
29.4
29.7
26.1
30.7
32.1
30.7
27
31.9
34.7
31.3
16.9
22.6
22.5
17.1
14.6
17
16.2
21.7
16.8
12.5
12.6
23.6
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Biomass Metal ores Non metalic minerals Fossil energy materials
Figure 2. Structure of imports per category of materials, %, 2005-2015
Biomass and non metallic minerals had the greatest share in the observed period by 35.6-
46.3% and 26.1-34.7%, respectively.
Exports, thousand t. Annual
average
growth, %
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total 3630 4157 5137 6757 10486 22050 29387 29533 27500 29124 23224 24.8
Biomass
187 321 346 287 292 317 599 367 392 303 400 13.9
Metal Ores
842 1046 1013 1753 2360 4288 6527 7144 7519 7863 6750 26.8
Non Metallic
minerals
330 356 364 354 314 410 407 429 339 314 291 -0.4
Fossil
energy
materials
2259 2424 3408 4357 7513 17035 21853 21592 19250 20644 15782 27.5
Other 13 9 7 5 6 1 1 1 1 1 1 -10.5
Table 3. Exports per category of materials, thousand t, 2005-2015
Mongolia exported 23.2 million tons materials, and it was 2.8 times more than
imports in 2015. Compared with 2005, exported materials increased by 6.4 times more in 2015,
was mainly due to increase of energy materials by 13.5 million tons or 6.9 times more. The increase
of energy materials are directly related to the increase of coal exports.
5.2
7.7
5.7
4.3
2.8
1.4
2.0
1.2
1.4
1.0
1.7
23.2
25.2
19.7
25.9
22.5
19.4
22.2
24.2
27.3
27.0
29.1
9.1
8.6
7.1
5.2
3
1.9
1.4
1.5
1.2
1.1
1.3
62.2
56.3
66.3
64.5
71.7
77.3
74.4
73.1
70.0
70.9
68.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Biomass Metal ores Non metalic minerals Fossil energy materials
Figure 3. Structure of exports per category of materials, %, 2005-2015
Energy material had the greatest share in exports in between 2005 and 2015. Its share in
total export was 68.8% on average.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Physical
trade
balance
-981 -1143 -202 -600 -5748 -16547 -19982 -19289 -16551 -19217 -14814 1511
Imports
2650 3014 4935 6157 4737 5503 9405 10244 10949 9907 8410 317.4
Exports (-) 3630 4157 5137 6757 10486 22050 29387 29533 27500 29124 23224 639.7
Table 4. Physical trade balance (PTB), 2005-2015
Table 5. Direct Material Input, thousand tons, 2005-2015
Direct material input, thousand tons
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Direct
material
input
51795 54174 65454 69015 72763 75203 92812 97663 111134 113370 113215 219
Domestic
Extraction
Used
49145 51160 60519 62858 68025 69701 83407 87419 100185 103464 104805 213
Imports 2650 3014 4935 6157 4737 5503 9405 10244 10949 9907 8410 317
Domestic material input reached 113.2 million tons in 2015 and increased by 61.4 million
tons or 2.2 times more compared with 2005.
Between 2005-2015,
trade balance had a deficit
throughout of all year. It
means that Mongolia
exported more materials
than imports and it shows
that non dependent or
resources.
Trade deficit increased
sharply from 2010 was
related to the export rise
of energy materials (coal
exports) and metal ores
(copper, iron, zinc)
Domestic material consumption, thousand tons
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Domestic material
consumption
48164 50017 60317 62257 62277 53153 63425 68130 83634 84246 89990 186.8
Direct material input 51795 54174 65454 69015 72763 75203 92812 97663 111134 113370 113215 218.6
Exports 3630 4157 5137 6757 10486 22050 29387 29533 27500 29124 23224 639.7
Table 6. Domestic Material Consumption (DMC), thousand tons, 2005-2015
Domestic material consumption equals Direct material input minus Exports. Material consumption in
national economy reached 90.0 million tons in 2015, increased by 41.8 million tons or 86.8 compared
with 2005.
Figure 4. Material intensity and Resource productivity, 2005-2015
0.0
50.0
100.0
150.0
200.0
250.0
300.0
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
14,000.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
material intensity, kg/mln.tug resource productivity, tug/kg
Mongolia produced 1 million tugrugs GDP using the 12.0 ton materials in 2005, whereas 1 million
tugrugs GDP were produced by 3.9 tons materials.
From the resource productivity perspectives, between 2005 and 2015, Mongolia used 1 kg material
to produce 83.0 and 257.1 tugrugs GDP, respectively.
18.9 19.4
23.0 23.4 22.9
19.3
22.6 23.8
28.5 28.1 29.4
10
20
30
40
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Figure 5. Domestic material consumption per capita, 2005-2015
Domestic material consumption per capita was 18.9-1934 tons between 2005-2010, 22.6 -23.8 tons
in 2007-2009, whereas in 2013-2015 it reached 28.1-29.4 tons and increased by 9.2-10.5 tons or
48.7-55.6% compared with 2005.
CHALLENGES/CONSTRAINTS
Need capacity building
• Lack of skills/human resources in the area
• Lack of practical experience to compile MFA
• Stakeholders lack of knowledge and practice in the framework on the SEEA
Develop national methodology for compilation of MFA
Hard to clearly understand the meaning of some terms and definitions and introduce
and apply to a country by reflecting local conditions
Develop national conversion factors
•Study international methodologies, guidelines on estimation of material flow accounts and
develop national methodology/guideline for the compilation of MFA (October 2017);
•Assess current data availability, define conversion factors and convert commodities to the
mass weights (October 2017);
•Conduct a survey to collect necessary data on metal ore and non metal minerals (August
2017);
•Compile MFA and estimate relevant flow indicators (October 2017);
•Develop glossary of material flow account (November 2017);
•Prepare the reports on material flow account (November 2017).
WAY FORWARD
Thank you for your attention
