Energy Scenarios, Outlooks and Climate Policies

ContactProfessor Chris Greig Director UQ Energy Initiative

The University of Queensland St Lucia QLD 4072 | Australia

Office: +61 (0) 7 3346 0656Email: uqenergy@uq.edu.au

ACKNOWLEDGEMENTSThe authors would like to thank the Steering Committee, Funders and Feedback Contributors who supported, contributed to, and provided feedback on this report. The robust review, challenge, diverse opinions and honest engagement we have received has strengthened this report.

We would particularly like to acknowledge and thank CO2CRC, CSIRO, ANLEC R&D, ACALET, Coal Innovation NSW and the Federal Department of Industry, Innovation and Science for their considerable enabling support of this project.

We would also like to acknowledge the advice and feedback from various industry leaders and subject matter experts from Government, Oil & Gas, Coal and Power industries.

Report Authors > Professor Chris Greig

The University of Queensland

> Dr Geoffrey Bongers Gamma Energy Technology

> Ms Caroline Stott The University of Queensland

> Ms Stephanie Byrom Gamma Energy Technology

Who should read this report This working paper was developed as a companion document to the Energy Security and Prosperity in Australia: A Roadmap for CCS report. The roadmap provides a framework to assure Carbon Capture and Storage (CCS) as an option for achieving emissions reductions in a timely manner in Australia.

This working paper provides an overview of global energy scenarios developed by the International Energy Agency, Shell and BP; an Australian outlook, including the electricity sector, natural gas processing operations and other industrial CO2 sources; and an overview of climate change polices and targets.

Greig, C., Bongers, G., Stott, C. and Byrom, S. (2016) Energy Scenarios, Outlooks and Climate Policies, The University of Queensland, Brisbane. ISBN 978-1-74272-176-7

Steering Committee

Contents

1. GlobalEnergyScenarios.......................................................................................................1 InternationalEnergyAgencyWorldEnergyOutlook.................................................................21.1 ShellEnergyScenarios................................................................................................................61.2 BPEnergyOutlook......................................................................................................................71.3

2 AustralianEnergyOutlook..................................................................................................9 Australianelectricitysectoroutlook........................................................................................102.1 Increasingintermittentrenewablegeneration........................................................................122.2 Scheduledpowerstationretirements......................................................................................142.3 Australianoutlookfornaturalgasprocessingoperations.......................................................152.4 AustralianoutlookforotherindustrialCO2sources................................................................152.5

3 ClimateChangePoliciesandTargets............................................................................17 SelectedINDCsforthepost2020period.................................................................................183.1

ListofFigures

Figure1:Primaryenergydemandbyfuelandregion,NewPoliciesScenario.......................................3

Figure2:Electricitygenerationbysourceandregion,NewPoliciesScenario.......................................4

Figure3:Worldelectricitygenerationbyfuelanddemand,NewPoliciesScenario(TWh)...................4

Figure4:Carboncapture,useandstorageappliedinvarioussectorsinthe2DS,2015-2050..............5

Figure5:Primaryenergypercapita,ShellEnergyScenariosto2050....................................................6

Figure6:Primaryenergybysource,ShellNewLensScenario...............................................................6

Figure7:Electricitygenerationbysource,ShellEnergyScenariosto2050...........................................7

Figure8:Energyconsumptionbyregion,BPEnergyOutlook................................................................7

Figure9:Primaryinputstopowergeneration,BPEnergyOutlook.......................................................8

Figure10:Australia'snetenergyconsumption,byindustry..................................................................9

Figure11:Australia’sprimaryenergyproduction,byfueltype.............................................................9

Figure12:Electricityconsumption2008–09to2035–36,allNEMregions.........................................10

Figure13:TotalinstalledbatterystoragecapacityintheNEM...........................................................11

Figure14:Capacityofexistingorwithdrawngeneration,andcommittedorproposedgenerationprojectsfortheNEM....................................................................................................................12

Figure15:Australiangasmarketflows,2013-14.................................................................................15

Figure16:Annualemissionsbysector,Australia,yeartoMarch2005–2015...................................16

Figure17:Percentagechangeinemissionsbysectorsince1990,Australia,1989-90to2013-14.....16

ListofTables

Table1:Powerstationcapacity,generationtypeandannouncedretirementyear,NEM..................14

Table2INDCsforselectedregions......................................................................................................18

Table3INDCsandCCSsummary........................................................................................................19

Table4:Climatepolicyoverviewforselectedregions.........................................................................21

1

1. GlobalEnergyScenarios

Governmentsaroundtheworldareattemptingtoresolvethetrilemmaofprovidingreliable,affordableandsustainableenergywhilecombatingthethreatofglobaltemperatureriseandbroaderimpactsofclimatechange.Thisrequiresdifferentdecision-makingprocessesandshortandlong-terminitiativestomanagerisk.Criticaltotheglobalresponseisrecognitionoftheremainingcarbonbudgetandpathwaystoachievenetzeroemissions.

Theshiftintheweightofworldenergydemandtowardsemergingeconomiesmasksstrongdemandgrowthinsomemarketsanddemandreductionsinothers.Fossilfuelsarepoweringprogressinsomecountries,whileothersarereducingtheirreliance.Renewablesaregrowinginmostmarkets,butsomerelyonwoodandcharcoal,whileothersusesolarpanelsandwindturbines.Somehavediscardedthenuclearoption,whileotherspursueanuclearpolicyor,atleast,keeptheiroptionsopen.Per-capitaenergyusealsodiffershugely,with,forexample,eachpersonconsumingmorethantenbarrelsofoilperyearinsomepartsoftheworld(onaverage),andtenpeopleconsuminglessthanonebarrelinsomeothers.1Despitedifferencesinenergydemandaroundtheworld,allglobalenergyscenariosforecastanincreaseinfossilfuelsdemand,withCCSbeingessentialtoreducingemissions.

InParislastyeartheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)21stsessionoftheConferenceoftheParties(COP)agreedtolimittheincreaseintheglobalaveragetemperaturetobelow2°Cabovepre-industriallevelsandtopursueeffortstolimittheincreaseto1.5°C.2Everyglobalenergyscenariopointstorisingenergydemand.Accesstoreliableandaffordableenergyfreessocietyfromsubsistenceliving,powersindustryandtechnology,andsupportsessentialhealthservices.

Thecontinueduseoffossilfuelsbeyond2030isadefiningfeatureofallscenarios.CCScouldplayakeyroleinachievingsignificantreductionsinemissionspost2030.ModellingfromtheInternationalEnergyAgency(IEA)indicatesthatCCScoulddeliver13percentofthecumulativeemissionsreductionsneededby2050(tolimittheglobalincreaseintemperatureto2°C).3TheUNIntergovernmentalPanelonClimateChange(IPCC)suggeststhatwithoutCCS(bioenergy,orthecombinationofbioenergywithCCS)manymodelscouldnotlimitlikelywarmingtobelow2°C.4Italsosuggestedthatnegativenetemissionswillberequiredlaterthiscentury,whichmayfurtherprioritiseCCS.5

1IEA(InternationalEnergyAgency)2015,WorldEnergyOutlook2015,IEA/OECD,Paris2UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2016,ClimateGettheBigPicture,http://bigpicture.unfccc.int/#content-the-paris-agreemen3IEA(InternationalEnergyAgency)2015,CarbonCaptureandStorage:Thesolutionfordeepemissionsreductions,https://www.iea.org/publications/freepublications/publication/CarbonCaptureandStorageThesolutionfordeepemissionsreductions.pdf4IPCC(IntergovernmentalPanelonClimateChange)2014,ClimateChange2014:MitigationofClimateChange,http://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_full.pdf5IPCC(IntergovernmentalPanelonClimateChange)2014,ClimateChange2014:MitigationofClimateChange,http://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_summary-for-policymakers.pdf

2

InternationalEnergyAgencyWorldEnergyOutlook1.1TheIEAusesthreescenariosintheWorldEnergyOutlook(WEO)6:

• NewPoliciesScenariobroadlyservesastheIEA’scentralscenario.Ittakesaccountofbroadpolicycommitmentsandplansthathavebeenannouncedbycountries,includingnationalpledgestoreducegreenhouse-gasemissions,evenifthemeasurestoimplementthesecommitmentshaveyettobeidentifiedorannounced.

• CurrentPoliciesScenarioassumesnochangesinpoliciesfromthemid-pointoftheyearofpublication.

• 450Scenariosetsoutanenergypathwayconsistentwiththegoaloflimitingtheglobalincreaseintemperatureto2°Cbylimitingconcentrationofgreenhousegasesintheatmospheretoaround450partspermillionofCO2.

Energyuseworldwideisforecastedtogrowbyone-thirdby2040intheIEAWEOcentralscenario(NewPoliciesScenario),drivenprimarilybyIndia,China,Africa,theMiddleEastandSoutheastAsia.

Thehighstandardoflivingthatmanyofustakeforgrantedisbasedonourabilitytoaccesslowcost,reliableandsecuresuppliesofenergypredominantlyprovidedbyfossilfuels.TheIEAdefinesenergysecurityastheuninterruptedavailabilityofenergysourcesatanaffordableprice.Energysecurityhastwomainaspects:

• Long-termenergysecurity–timelyinvestmentstosupplyenergyinlinewitheconomicdevelopmentsandenvironmentalneeds;and

• Short-termenergysecurity–abilityoftheenergysystemtoreactpromptlytosuddenchangesinthesupply-demandbalance.7

UndertheNewPoliciesScenario,accordingtotheIEA,fossilfuelscurrentlyaccountforthebulkofworldprimaryenergydemandandwillcontinuetodosoin2040(seeFigure1).

6IEA(InternationalEnergyAgency)2016,ScenariosandProjections,https://www.iea.org/publications/scenariosandprojections/7IEA(InternationalEnergyAgency)2016,EnergySecurity,http://www.iea.org/topics/energysecurity/

3

Figure1:Primaryenergydemandbyfuelandregion,NewPoliciesScenarioSource:IEA(InternationalEnergyAgency)2016,WorldEnergyOutlook2016,IEA/OECD,Paris

CountriesoutsidetheOECDaccountformorethan80percentofelectricitydemandgrowthto2040inallscenarios(seeFigure2).

4

Figure2:Electricitygenerationbysourceandregion,NewPoliciesScenarioSource:IEA(InternationalEnergyAgency)2016,WorldEnergyOutlook2016,IEA/OECD,Paris

Fossilfuelsareforecasttocontinuetodominatetheelectricitymixin2040,accountingformorethanhalfofgenerationglobally.By2040,almost25,000TWhofelectricitysupplycomesfromnewpowerplants,while14,000TWh(36%oftotalgeneration)comesfromplantinexistencetoday(seeFigure3).

Figure3:Worldelectricitygenerationbyfuelanddemand,NewPoliciesScenario(TWh)Source:IEA(InternationalEnergyAgency)2016,WorldEnergyOutlook2016,IEA/OECD,Paris

5

The2°CScenario(2DS)isascenariofromtheIEA’sEnergyTechnologyPerspectives.The2DSlaysoutanenergysystemdeploymentroadmapandemissionstrajectoryinlinewithatleasta50percentchanceoflimitingtheaverageglobaltemperatureincreaseto2°C.The2DSlimitsthetotalremainingcumulativeenergy-relatedCO2emissionsbetween2015and2100to1,000GtCO2e.The2DSreducesCO2emissionsbyalmost60percentby2050(comparedwith2013),withcarbonemissionsbeingprojectedtodeclineafter2050untilcarbonneutralityisreached.6Takingintoaccountcurrentglobalenergyscenarios,achieving2DSwouldbereliantonCCS,bothforpowergenerationandindustrialapplications(seeFigure4).

Figure4:Carboncapture,useandstorageappliedinvarioussectorsinthe2DS,2015-2050Source:IEA(InternationalEnergyAgency)2013,TechnologyRoadmapCarbonCaptureandStorage,IEA/OECD,Paris

6

ShellEnergyScenarios1.2Shellpublishvariousscenariosbasedonglobalenergyforecasting,eachfocusingonmarketmechanisms,energypovertyalleviation,energysecurityandenvironmentalpollutionreduction.AcrossShellscenarios,developingnationsareenteringtheirmostenergy-intensivephaseofeconomicgrowthastheyindustrialise,buildinfrastructure,andincreasetheiruseoftransportation,asshowninFigure5.Thisisaconstantthreadamongstglobalenergyscenarios.

Figure5:Primaryenergypercapita,ShellEnergyScenariosto2050Source:Shell2008,ShellEnergyScenariosto2050

Theprimaryenergyconsumptionbysourceisconsistentacrossallglobalenergyoutlookscenarios–fossilfuelswillcontinuetodriveprimaryenergyfordecadestocomeasshowninFigure6.

Figure6:Primaryenergybysource,ShellNewLensScenario

Source:Shell2015,NewLensScenarios

7

Figure7:Electricitygenerationbysource,ShellEnergyScenariosto2050

Source:Shell2008,ShellEnergyScenariosto2050

Shell’sscenarioechoestheIEAintheirrepresentationofelectricitygeneration.Coalcontinuestogrow,butdoesnotcontinueasthemajorityoftheelectricitymix.By2040,coalrepresentsapproximatelyonethirdofelectricitygeneration,asshowninFigure7.

BPEnergyOutlook1.3TheBPEnergyOutlookechoesthecentralmessageoftheIEA’sWEO:astheworldeconomyexpands,moreenergywillbeneededtofuelthehigherlevelsofactivityandlivingstandards.BPreiteratestheIEAintheirgrowthforecast:energyconsumptionincreasesby34percentbetween2014and2035.Morethanhalfoftheincreaseinglobalenergyconsumptionisusedforpowergenerationasthelong-runtrendtowardsglobalelectrificationcontinues.8

AsdemonstratedinFigure8themajorityofadditionalenergyisconsumedinfast-growingemergingeconomies,withenergydemandwithintheOECDremainingsteady.Justoveronethirdofthegrowthinpowergenerationtakesplaceindevelopingregions–India,otherdevelopingAsia(excludingChina),andAfrica.

Figure8:Energyconsumptionbyregion,BPEnergyOutlookSource:BP2016,BPEnergyOutlook2016

8BP2016,BPEnergyOutlook2016

8

Fossilfuelsremainthedominantformofenergypoweringtheglobalexpansion:providingaround60percentoftheadditionalenergyin2035,asshowninFigure9.

Figure9:Primaryinputstopowergeneration,BPEnergyOutlookSource:BP2016,BPEnergyOutlook2016

9

2 AustralianEnergyOutlookAustraliahasabundantenergyreservesandisoneoftheworld’slargestprimaryenergyproducers.Australia’sproximitytoAsiameansitiswellplacedtofueltherisingprosperityofbillionsofpeople.Fossilfuelsarealsoprojectedtounderpinourdomesticenergysecurityforseveraldecades.9

Australiaisalargeproducerofprimaryenergy,producingalmost19,000PJin2014.Withlessthan6,000PJuseddomesticallyinvariousindustries(seeFigure10);themajorityoftheenergyproducedisexported,includingcoal,uraniumoxideandnaturalgas(seeFigure11).

Figure10:Australia'snetenergyconsumption,byindustry

Source:AustralianGovernmentDepartmentofIndustryandScience2015,AustralianEnergyUpdate,Canberra,August

Figure11:Australia’sprimaryenergyproduction,byfueltype

Source:AustralianGovernmentDepartmentofIndustryandScience2015,AustralianEnergyUpdate,Canberra,August

9AustralianGovernment,EnergyWhitePaper2012,CommonwealthofAustralia,Canberra

10

ForthepurposesofthisreportandtheemphasisonopportunitiesforthedeploymentofCCSwithinAustralia,therewillbeaheavyemphasisontheelectricitysector,whichalongwithremovalofCO2fromreservoirgasrepresentsthemajorpotentialforCCStomitigatestationaryemissionssources.

Australianelectricitysectoroutlook2.1TheAustralianEnergyMarketOperator(AEMO)publishesaNationalElectricityForecastingReport(NEFR)annually.AEMO’sforecastsexplorearangeofsensitivitiesthatrepresenttheprobablepathwayforAustraliaacrossweak,neutral(consideredthemostlikely),andstrongeconomicandconsumeroutlooks.10

Smallgrowthisforecastuntil2020,duemostlytoconsumptionofelectricityinQueensland’sLNGplants,thenareductionisforecastuntil2030.

AEMOincludestheassumptionthatAustraliawillmeetits2030emissionsreductionstargets,whichflattenstheforecastedconsumption.Thisisassumedtoentailstrongimprovementsinenergyefficiency,energypriceeffectsfromtheclosureofcoal-firedgeneratorsandotherpolicymeasures(seeFigure12).

Figure12:Electricityconsumption2008–09to2035–36,allNEMregionsSource:AEMO(AustralianEnergyMarketOperator)2016,NationalElectricityForecastReport2016,Melbourne,June

Consumptionhasincreasedin2015/16forthefirsttimesince2008/09duetoexceptionalweather(coldwinterfollowedbyhotsummer),andthestartofproductionofLNGexportsfromQueensland,whichuseselectricityforgascompression.

10AEMO(AustralianEnergyMarketOperator)2016,NationalElectricityForecastReport2016,Melbourne,June

11

StronggrowthisforecasttocontinuefortheuptakeofresidentialrooftopsolarPV,with20GWofinstalledcapacityforecastby2035–36(currently<5GWinstalled).AEMOforecastthatapproximately3.8GWofthisinstalledcapacityisexpectedtohaveintegratedbatterystorage.Asteadyuptakeinbatterystorageisforecastafter2021inboththeresidentialandthecommercialsectors(seeFigure13).

Figure13:TotalinstalledbatterystoragecapacityintheNEMSource:AEMO(AustralianEnergyMarketOperator)2016,NationalElectricityForecastReport2016,Melbourne,June

AEMOhaveforecastthatby2030someareasofSouthAustraliaandQueenslandareexpectedtoreachsaturationlevelsforresidentialrooftopsolarPV.PartsofVictoriaareprojectedtofollowthreeyearslater,withTasmaniafollowingin2035–36.

CoalcurrentlyrepresentsthemajorityoftheprimaryenergysourceforelectricitygenerationinAustralia.WhiletheAEMONEFR2016doesnotaddressthegenerationmix,assumptionscanbemadethatmajoritywillnotsignificantlychangeawayfromcoalbasedonthecommittedandproposedgenerationprojects(seeFigure14).

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Figure14:Capacityofexistingorwithdrawngeneration,andcommittedorproposedgenerationprojectsfortheNEM

Source:AEMO(AustralianEnergyMarketOperator)2016,NationalElectricityForecastReport2016,Melbourne,June

Increasingintermittentrenewablegeneration2.2Asimpleelectricitygridisanetworkthatconnectsenergygenerationsourceswithconsumers:

• Itsupportselectricitygeneration,transmissionanddistributioninfrastructureaswellasgridcontrolservices;

• Moderngridsincludedemandresponse,highlevelsofdistributedgenerationandsmartgridtechnologies;

• Conventionalutilitiestypicallyconsistofoneormorelargepowerplantsservicing‘distant’domesticandcommercialcustomers;

• Distributedutilitiesconsistofsmallergenerationsources,typicallyclosertothecustomers;• Electricitygenerationoutputandcharacteristicsvarysignificantlybetweengeneration

sources;and• Thegridcontrolsystemsmustbeabletoaccommodatethesesafelyandeconomically.

13

Thecomplexityofrenewableenergyintegrationdependsonthelocation,technology,andpenetrationlevelthattheexistinggridcansupport:

• Renewablegenerationvariabilitymainlydependsontheweather-theamountofwaterflow,cloudcoverorstrengthandconsistencyofwindvelocity;

• Penetrationratesofvariablerenewableenergyaretypicallyconstrainedbytheabilityoftheexistinggridandmarkettobalancethevariabilityofdemandandsupply;

• Thereisno‘onesizefitsall’approachtointegration,powersystemsvarysignificantly;and• Forecastingtoolsarecontinuallyimprovingtoaidtheintegrationofvariablerenewable

energyintogrids,maximisingtheenergyfromrenewablesourcesaswellasimprovinggridstability.11

GiventhechangesintheAustraliangenerationmix,thechangingnatureofpowersystemsneedstobecarefullyconsidered.Powersystemshavefundamentalneeds,includingloadfollowing,flexibilityanddynamicresponseaswellasstabilitycontrol.Increasingintermittentrenewablegenerationinapowersystemcanincreaseintegrationcosts.Everypowersystemisdifferentbut,inmostsystems,thepracticalupperlimitforrenewablesisaround40percentoftotalelectricitygenerated.Thismaybeexceededbutitislikelytorequireagreaterlevelofinterconnectionwithadjoiningpowersystems,moreenergystorage,increasedrecoursetodemand-sidemanagementandregulatorychanges.12

11GammaEnergyTechnology,PowerFactbook,www.powerfactbook.com(accessedNovember2016)12Bartlett,S.(2016)The“pressurecooker”effectofintermittentrenewablegenerationinpowersystems,PublicPolicyPaper6/2016,EnergyPolicyInstituteofAustralia.

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Scheduledpowerstationretirements2.3TheNationalElectricityMarket(NEM)isstronglysupportedbyfossilfuel-basedpowergeneration.Table1displaysthecapacity,locationandannouncedretirementyearof24-7powergenerationintheNEM.

Table1:Powerstationcapacity,generationtypeandannouncedretirementyear,NEM13

Station State GenerationType

Capacity(MW)

EmissionsIntensity

(tonnesCO2-e/MWhasgenerated)

ApproximateYear

Commissioned

ApproximateYear

Retirement

TorrensIslandA SA OCGT 480 0.709 1967 2017Hazelwood VIC BrownCoal 1,600 1.402 1968 2018Anglesea VIC BrownCoal 155 1.095 1969 2019Liddell NSW BlackCoal 2,000 0.981 1972 2022DryCreek SA OCGT 156 1.343 1973 2023Mackay QLD OCGT 34 1.046 1975 2025TorrensIslandB SA OCGT 800 0.681 1977 2027Newport VIC OCGT 500 0.570 1977 2027ValesPointB NSW BlackCoal 1,320 0.908 1978 2028WallerawangC NSW BlackCoal 1,000 0.915 1978 2028JeeralangA VIC OCGT 232 0.879 1979 2029Gladstone QLD BlackCoal 1,680 0.972 1980 2030JeeralangB VIC OCGT 200 0.879 1980 2030Yallourn VIC BrownCoal 1,480 1.316 1980 2030Bayswater NSW BlackCoal 2,640 0.913 1983 2033Eraring NSW BlackCoal 2,880 0.910 1983 2033Mintaro SA OCGT 90 0.952 1984 2034Tarong QLD BlackCoal 1,400 0.871 1985 2035LoyYangA VIC BrownCoal 2,200 1.155 1986 2036CallideB QLD BlackCoal 700 0.931 1989 2039MtPiper NSW BlackCoal 1,400 0.909 1993 2043Stanwell QLD BlackCoal 1,445 0.872 1995 2045LoyYangB VIC BrownCoal 1,050 1.141 1995 2045Barcaldine QLD CCGT 55 1.099 1996 2046Osborne SA CCGT 180 0.545 1998 2048Roma QLD OCGT 74 0.757 1999 2049Oakey QLD OCGT 332 0.845 2000 2050LadbrokeGrove SA OCGT 80 0.654 2000 2050PelicanPoint SA CCGT 487 0.474 2000 2050

13Powerstationretirementsarebasedoneitherannouncedretirementsorapproximateretirementyearsbasedonageandtechnicallifespan.

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Australianoutlookfornaturalgasprocessingoperations2.4Australiaisbothanimporterandexporterofnaturalgas.ThedomesticnaturalgasflowscanbeseeninFigure15.Australiannaturalgasisconvertedtoliquefiednaturalgas(LNG)beforebeingexported.

Figure15:Australiangasmarketflows,2013-14

Source:AustralianGovernmentDepartmentofIndustryandScience2015,EnergyinAustralia,Canberra,August

In2014,Australiawastheworld’sthirdlargestLNGexporter,withanexportcapacityof41.2milliontonnes,andaccountedfor10percentofworldLNGtrade.Attheendof2015,therewerearound45milliontonnesofLNGcapacityunderconstructioninAustralia.Oncebuilt,thisisexpectedtomakeAustraliatheworld’slargestexporterofLNGbytheendofthedecade.ThisexpansionincapacitywillincludenewconventionalgasprojectsinwesternandnorthernAustralia,floatingLNGprojects,andcoalseamgasbasedLNGprojectsontheeastcoast14.

AustralianoutlookforotherindustrialCO2sources2.5TheAustralianannualemissionsbysectorarepresentedinFigure16.Since1990,theNationalGreenhouseGasInventory,excludinglanduse,landusechangeandforestry(LULUCF),hasgrownby24.7percent,reaching533.9MtCO2-eintheyeartoMarch2015.

14AustralianGovernmentDepartmentofIndustryandScience2015,EnergyinAustralia,Canberra,August

16

Figure16:Annualemissionsbysector,Australia,yeartoMarch2005–2015

Source:AustralianGovernmentDepartmentofEnvironment2015,QuarterlyUpdateofAustralia’sNationalGreenhouseGasInventory:March2015,Canberra,March

Theelectricitysectorhasexperiencedthelargestgrowth,increasingby51.8MtCO2-ebetween1990and2015.Inpercentageterms,electricityandstationaryenergyexcludingelectricitygrew39.6percentand41.4percentrespectively.Emissionsfromtransportgrew50.7percent,fugitiveemissionsincreasedby13.2percent,andindustrialprocessesandproductusegrew18.1percent.Incontrast,emissionsfromthewasteandagriculturesectorshavedecreasedby35.7percentand5.0percentrespectivelysince1990.15ThepercentagechangeinemissionsbysourceisshowninFigure17.

Figure17:Percentagechangeinemissionsbysectorsince1990,Australia,1989-90to2013-14

Source:AustralianGovernmentDepartmentofEnvironment2015,QuarterlyUpdateofAustralia’sNationalGreenhouseGasInventory:March2015,Canberra,March

15AustralianGovernmentDepartmentofEnvironment2015,QuarterlyUpdateofAustralia’sNationalGreenhouseGasInventory:March2015,Canberra,March

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3 ClimateChangePoliciesandTargetsInternationaleffortstoaddressclimatechangeundertheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)haveprincipallyfocusedongreenhousegasemissionsreductiontargetsastheprimarymechanismbywhichtolimittheriseinglobaltemperaturecomparedwithpre-industriallevels.InternationallybindingemissionsreductiontargetsunderpinnedtheKyotoProtocol,16featuringtheprincipleof“commonbutdifferentiatedresponsibilities”andemphasisingtheroleandresponsibilityofdevelopedcountries.TheclimatenegotiationsthattookplaceleadingtotheCopenhagenAccord(2009)17andtheCancunAgreements(2010)18resultedinthesubmissionofquantitativeeconomy-wideemissionsreductionpledgesby42AnnexIparties(developedcountries),andthesubmissionofnationallyappropriatemitigationactionsby45non-AnnexIparties(developedcountries).

TheCopenhagen“pledgeandreview”frameworkwasbeencriticised19foralackofcoherencebetweentargetsandimpedingtheabilityoftheinternationalcommunitytogaugeprogressonemissionsreductionscommitments.Moreover,underpinningthedevelopmentoftheinternationalclimateregimetheprincipleof“commonbutdifferentiatedresponsibilities”resultedindevelopedstatesleadingeffortstoachieveemissionreductions(whichwasreflectedbytheKyotoProtocolinthatonlydevelopedstateswereassignedemissionstargets).

Overthepastfewyearstherehasbeenanattempttoaddresstheissueofhowtoprogressmitigationtargetsandresponsibilities.Thebreakthroughcamein2011atCOP17inDurban20,inwhichtheparticipatingnationsagreed“todevelopaprotocol,anotherlegalinstrumentoranagreedoutcomewithlegalforce”bynolaterthan2015,applicabletobothdevelopedanddevelopingstates.Followingthisin2012,atCOP18inDoha,21itwasagreedthat“elementsforadraftnegotiatingtext”wouldbeconsideredinDecember2014,“withaviewtomakingavailableanegotiatingtextbeforeMay2015”foragreementbytheendof2015,tobeimplementedin2020.Morerecently,atCOP19inWarsaw,22stateswereinvitedtoconsiderandcommunicatetheirintendednationallydeterminedcontributions(INDC)bythefirstquarterof2015,inpreparationforthesigningofaninternationalagreementatCOP21inParis.23Notably,attherequestofadevelopingstate,thenewagreementfeatures“contributions”asopposedto“commitments”.

16UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2014a,KyotoProtocolhttp://unfccc.int/kyoto_protocol/items/2830.php17UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2014b,CopenhagenAccord,http://unfccc.int/meetings/copenhagen_dec_2009/items/5262.php18UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2014c,CancunAgreementhttp://unfccc.int/meetings/cancun_nov_2010/items/6005.php19IETA(InternationalEmissionsTradingAssociation),2013,IETAGreenhouseGasMarket2013,Geneva20UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2014d,DurbanClimateChangeConference-November/December2011,http://unfccc.int/meetings/durban_nov_2011/meeting/6245.php21UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2014e,AdvancingtheDurbanPlatform,http://unfccc.int/resource/docs/2012/cop18/eng/l13.pdf22UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2014f,COP19Decisions,http://unfccc.int/meetings/warsaw_nov_2013/session/7767/php/view/decisions.php23UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2015,ParisClimateChangeConference-November2015,http://unfccc.int/meetings/paris_nov_2015/meeting/8926.php

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SelectedINDCsforthepost2020period3.1TherecentCOP21meetingsresultedinabroadconsensusthatglobaltemperatureriseasaresultofhumaninducedclimatechangeshouldbelimitedto2°Cabovepre-industriallevels,withanaspirationaltargetof1.5°C;requiringdeepcutsinglobalCO2emissions.Theagreementalsospecifiesthatanthropogenicgreenhousegasemissionsandremovalshaveto“balance”inthe2ndhalfofthecentury.Effectivelyanetzeroemissionstargetbeyond2050hasbeenagreedby175countries,includingAustralia.24

SelectedINDCs25forthepost2020periodofselectedcountriesarehighlightedinTable2,andtheinclusionofCCSinINDCsisnotedinTable3.

Theprogressivedevelopmentofselectedregions’climatetargetsisprovidedinTable4.AspartoftheprocessofachievingtheINDCs,governmentsarebeginningtoconsiderthepathwaystoachievethelong-termemissionsreductiongoalsagreedtoatCOP21.

Table2INDCsforselectedregions

Australia • Aneconomy-widetargettoreduceGHGby26to28percentbelow2005levelsby2030includingLULUCF.

Canada • Aneconomy-widetargettoreduceGHGby30percentbelow2005levelsin2030includingLULUCFandpossibleuseofinternationalemissionscredits.

China • PeakCO2emissionsby2030,orearlierifpossible;• Increasetheshareofnon-fossilenergysourcesinthetotalprimaryenergy

supplytoaround20percentby2030;• LowerthecarbonintensityofGDPby60percentto65percentbelow2005

levelsby2030;• Increasetheforeststockvolumebyaround4.5billioncubicmetres,

comparedto2005levels;and• Proposedmeasurestolimitorreduceemissionsofnon-CO2greenhouse

gases.China’sINDCalsoincludesacomprehensivelistofactionstoachieveits2020and2030targets,asignificantnumberofwhichhavealreadybeenimplemented.

EU • Abinding,economy-widetargetofatleast40percentreductionindomesticGHGbelow1990levelsby2030.

India • ReducetheemissionsintensityofGDPby33to35percentbelow2005levelsby2030;

• Increasetheshareofnon-fossilbasedenergyresourcesto40percentofinstalledelectricpowercapacityby2030,withhelpoftransferoftechnologyandlowcostinternationalfinanceincludingfromGreenClimateFund;and

• Createanadditional(cumulative)carbonsinkof2.5to3GtCO2ethroughadditionalforestandtreecoverby2030.

Indiaintendstocoverthe$2.5trillioncostofitspledgewithbothdomesticandinternationalfunds.

Netherlands N/A–refertoEUUK N/A–refertoEUUSA • ReducedomesticGHGemissionsby26to28percentbelow2005levelsby

2025includingLULUCF,excludinginternationalemissionscredit.24UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2016,Listof175SignatoriestoParisAgreement,http://newsroom.unfccc.int/paris-agreement/175-states-sign-paris-agreement/25Asagreedatthe21stConferenceoftheParties,aUnitedNationsClimateChangeConferenceheldinParisfrom30Novemberto12December2015.

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Table3INDCsandCCSsummaryCountry INDCExcerpts26Bahrain CarbonCaptureandStorage

BAPCOCarbonRecoveryPlanutilizesWasteCO₂richoffgasstreamwhichistobeusedforindustrialapplications.GulfPetrochemicalIndustriesCompany(GPIC)CarbonRecoveryProjectisabletocaptureCO₂inthefluegasesoftheGPICMethanolPlant.

Canada Canadaisaleaderincleanenergytechnologies,andhasmademultipleinvestmentsinsuchtechnologiestopromotefurtherinnovation.Examplesincludetheworld’sfirstlargescalepowersectorcarboncaptureandstorageprojectinSaskatchewan,aswellasthefirstcarboncaptureandstorageprojectatanoilsandsoperation[…]•ElectricitysectorregulationsmakeCanadathefirstmajorcoalusertobantheconstructionoftraditionalcoal-firedelectricitygeneratingunits.Theseregulationswillalsoleadtothephase-outofexistingcoal-firedelectricityunitswithoutcarboncaptureandstorage.

China Tostrengthenresearchanddevelopmentandcommercializationdemonstrationforlow-carbontechnologies,suchasenergyconservation,renewableenergy,advancednuclearpowertechnologiesandcarboncapture,utilizationandstorageandtopromotethetechnologiesofutilizingcarbondioxidetoenhanceoilrecoveryandcoal-bedmethanerecovery;

Egypt Therearefourkeytechnology-relatedrequirementsessentialfortransformation:[...](ii)carboncaptureandstorage“CCS”asatechnologyalternativethatcanbeusedinthefutureifproveneconomicallyfeasible,[...]

Iran FinancialandTechnologicalNeedsDuetothesignificantshareofenergysectorinemissions(morethan90percent)andconsequentlythehighpotentialofthissectorinemissionsmitigation,itsmajortechnologicalrequirementsareasfollows:[...]•Useofrenewableandalternativeenergyresources(likenuclearpower)aswellasbiofuels,biogas,wastetoenergyproductionandCCS

Malawi Supportindustriesengagedincarboncaptureandstorage[Conditionalonexternalsupportincapacitybuilding,technologydevelopmentandtransfer,andfinancialresources]

Norway WithreferencetotheWhitePaper,thepriorityareasforenhancednationalclimatepolicyeffortsare:[...]•CO₂captureandstorage

SaudiArabia CarbonCaptureandUtilization/Storage:promoteandencourageactionsinthisarea.Aspartofitssustainabilityprogramme,theKingdomofSaudiArabiaplanstobuildtheworld’slargestcarboncaptureanduseplant.Thisinitiativeaimstocaptureandpurifyabout1,500tonsofCO₂adayforuseinotherpetrochemicalplants.SaudiArabiawilloperateonpilottestingbasis,aCarbonDioxide–EnhancedOilRecovery(CO2-EOR)demonstrationprojecttoassesstheviabilityofCO₂sequestrationinoilreservoirsandanyotherusefulapplications.FortymillionstandardcubicfeetadayofCO₂thatwillbecaptured,processedandinjectedintotheOthmaniyaoilreservoir.Thispilotprojecthascomprehensivemonitoringandsurveillanceplans.ThesuccessofthispilotwilldeterminetheextentthisprogramwillcontributetotheKingdom'sambitioninaddressingclimatechange.

26PotsdamInstituteforClimateImpactResearch2016,IntendedNationallyDeterminedContributions(INDCs)&CarbonCaptureandStorage,https://www.pik-potsdam.de/primap-live/indcs-carbon-capture-and-storage/

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Country INDCExcerpts26[...]Technologycooperation[...]willallowfortheidentificationofappropriatetechnologicaloptions,whichareconsistentwithnationalpriorities,anddomestichumanandfinancialresourcesinordertopromoteenablingenvironmentforeconomicdiversificationandtechnologicaldevelopment(e.g.carboncaptureutilizationandstorage).

SouthAfrica SupportcomponentofINDC[...]Analysisoftheincrementalcostsofmitigationactionsindicatesthatsignificantfinanceandinvestmentwillberequiredinthelong-term.Thefollowingestimatesareoftotalincrementalcostsrequired:[...]3.CCS:23MtCO2fromthecoal-to-liquidplant-US$0.45billion.[...]SometechnologiesthatcouldhelpSouthAfricatofurtherreduceemissionsthathavebeenidentifiedinclude:Energyefficientlighting;variablespeeddrivesandefficientmotors;energyefficientappliances;solarwaterheaters;electricandhybridelectricvehicles;solarPV;windpower;carboncaptureandsequestration;andadvancedbio-energy.

UnitedArabEmirates

TheUAEisalsodevelopingtheregion’sfirstcommercial-scalenetworkforcarboncapture,usageandstorage.Theprojectnotablycapturesandcompressesemissionsatasteelmanufacturingfacility,whichwillbecompressedandtransportedtooilfields,whereitwillbeusedtoenhanceoilrecoveryandultimatelybestoredundergroundprovidingoneofthefirstviablemechanismstodecarbonizeessentialenergyintensiveindustries.

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Table4:Climatepolicyoverviewforselectedregions

Australia Canada China EU India USAKyotoProtocol27

KP1 +8% N/A N/A 8% N/A N/AKP2 0.05% N/A N/A 20% N/A N/A

CopenhagenAccord28,29

2020Target

5(unconditional)to15-25%(conditional)by2020

17%by2020 40to45%carbonintensityofGDPby2020Non-fossilshareofenergysupply15%by2020

20(unconditional)to30%(conditional)by2020

20to25%emissionintensityofGDPby2020

17%by2020

Baseyear 2000 2005 2005 1990 2005 2005Coverage/conditions

N/A Forestcoverandforeststocktargetstoo

Developedcountriescommittocomparableeffortsanddevelopingcountriescommitaccordingtocapabilities

Excludingagriculturesector N/A

INDC30 2030Target

26to28%by2030

30%by2030 PeakCO2emissionsby2030Non-fossilshareofenergysupply20%by203060%to65%carbonintensityofGDPby2030

40%by2030 33to35%emissionsintensityofGDPby2030Non-fossilshareofcumulativepowergenerationcapacity40%by2030

26to28%by2025

Baseyear 2005 2005 2005(forcarbonintensityofGDP)

1990 2005 2005

Coverage/conditions

Economy-wideincl.LULUCF

Economy-wideincl.LULUCFandcredits

Economy-wideForestcoverandforeststocktargetstoo

Economy-wide Carbonsinkof2.5to3GtCO2eviaforestandtreecoverby2030

Incl.LULUCF,excl.credits

27UNFCCC(UnitedNationsFrameworkConventiononClimateChange)1998,KyotoProtocoltotheUnitedNationsFrameworkConventiononClimateChange,http://unfccc.int/resource/docs/convkp/kpeng.pdf28UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2010,AppendixI-Quantifiedeconomy-wideemissionstargetsfor2020,http://unfccc.int/meetings/copenhagen_dec_2009/items/5264.php29UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2010,AppendixII-NationallyappropriatemitigationactionsofdevelopingcountryParties,http://unfccc.int/meetings/cop_15/copenhagen_accord/items/5265.php30UNFCCC(UnitedNationsFrameworkConventiononClimateChange)2016,INDCsascommunicatedbyParties,http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx

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