New research from carbon analytics firm RepuTex shows Australia’s greenhouse gas emissions are expected to slow during 2013, with emissions to grow by just 0.4 per cent, or 1.3 million tonnes (Mt) from 2012 levels on the back of reduced output from the metals sector and an increase in renewable power generation.
Australia’s emissions are forecast to be more than 10 Mt, or 3 per cent, lower than projected under a business as usual scenario without a carbon price, indicating that the government’s Carbon Price Mechanism (CPM) will play a key role in reducing Australia's carbon footprint.
RepuTex forecasts greenhouse gas emissions across the CPM via the facility level modelling of over 750 of the country’s largest carbon-emitting plants/sites. The research shows emissions growth in 2013 to be driven by the power, energy, and mining sectors – with power emissions forecast to grow 1.2 per cent, but muted by increased renewable and gas generation capacity.
The power sector will remain the largest source of carbon emissions in 2013 – accounting for 59 per cent of all CPM emissions, followed by mining at 17 per cent.
One of the key issues facing the power sector is that of rising gas prices, which are set to hamper gas generation’s ability to compete with coal medium-term.
The research forecasts coal maintaining its share of Australia’s generation mix through 2016, when government assistance to brown coal generators expires. From that point the floating carbon price is expected to influence brown coal generation, leading to a real decline in power emissions from 2017-18.
RepuTex predicts black coal generation to grow by around 20 per cent through 2020, whereas brown coal is forecast to decline nearly 17 per cent over the same period. Total coal generation is set to increase 8 per cent by 2020, but with a resultant rise in emissions of only 4 per cent, reflecting increased usage of less carbon-intensive black coal.
Emissions from petroleum refining and gas processing – both of which face significant regional competition – will decline in 2013, by 3 per cent and almost 9 per cent respectively as domestic output slows.
Notably, emissions from the metals sector are forecast to drop 6 per cent over 2013, driven by a downturn in Australia’s steel and aluminium industries, with steel emissions forecast to contract over 20 per cent from 2012 levels, in line with reduced production.
Thus, the combined impact of both carbon pricing and major sectoral changes within the Australian economy are steadily shifting the country’s emissions profile.
The effect of closures such as Kurri Kurri Aluminium and Caltex’s Kurnell refinery will be counteracted by the number of massive new projects within the oil and gas sector.
The five largest such developments, Browse (Woodside, 2018), Wheatstone (Chevron, 2016), Gorgon (Chevron, 2015), Australia Pacific LNG (ConocoPhillips, 2016) and Icthys (INPEX, 2017) once online will be the largest emitting facilities in Australia’s energy sector. Between them, they are forecast to account for just under 29 Mt, or around 40 per cent of the entire sector’s emissions by 2020.
Bret Harper is Associate Director of Research at RepuTex Carbon and Clean Energy Analytics.