Even Abbott’s weak emissions target will be hard work to meet

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Regardless of who is in government, we are in for some big changes as we begin to respond to climate change. Here’s a look at what some of them might be.

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It seems that, even to achieve the weak 2030 emission target set by the government, some significant abatement action will be needed. And it will require significant policy intervention. In the G20 communique and the Energy White Paper, the major measures discussed (apart from the ERF) seem to have been vehicle performance standards, an energy productivity strategy, and vague references to appliance and building standards. And, of course, both the small and large RETs will be important.

australia-carbon-emissions-rising_244

The drivers of emission reductions seem likely to be:

– Ongoing industry restructuring, driven by increasing local gas prices, ageing industrial facilities that are progressively less competitive, especially as ‘free trade’ deals are done that open our economy up to imports, and in response to a lack of government support for emerging industries and innovation;

– Ongoing slow economic growth due to both external and internal factors;

– The Emission Reduction Fund;

– Other ‘direct action’ on vehicle fuel efficiency, appliance efficiency and possibly building energy efficiency. The vehicle measures may well encourage plug-in hybrid and electric vehicles: as the greenhouse intensity of grid electricity declines, these will reduce emissions. The challenge for the government on energy efficiency will be that the kinds of policies most likely to deliver cost-effective emission reductions are fairly interventionist, and are anathema to many coalition politicians and their supporters.

– Both the small and large RET: the small RET drives rooftop solar and low emission hot water, and is effectively not capped. The large RET will require a rapid ramp-up of activity, but may then fizzle after 2020 until a 2030 target is locked in.

– Closure (eventually) of some coal power stations, although the timing is difficult to predict: this is likely to depend on when individual power stations face plant failures or major maintenance of refurbishment costs. In the absence of a carbon price there is no pressure to close the worst of the coal power stations, as the brown coal ones have the lowest running costs, which means they generally bid into the market at a lower price than black coal plant.

Policy changes in the electricity industry will have a range of impacts. In particular, if regulators allow high fixed charges to be applied, the economics of energy efficiency, batteries and smart management as well as rooftop solar will be undermined. Response to increasing gas prices (including fixed charges) seem likely to accelerate efficiency improvement and switching away from gas. In many cases, this will lead to a net reduction in emissions, as efficient electric technologies such as heat pumps have lower emissions than gas.

The table below shows my estimate of greenhouse gas emissions by industry and sector (for 2011-12). This gives some insights into emissions, and emission intensity by industry.Screen Shot 2015-08-14 at 1.44.45 pm

The good news is that the services sector (60% of GDP) has very low emissions intensity, so growing that sector (especially if we drive energy efficiency, renewables and energy productivity) can deliver economic growth while reducing emissions.

The metals sector (dominated by aluminium smelting) is a key sector: as documented by the Australia institute, aluminium smelting is subsidised, so cutbacks there will help the economy and cut emissions.

We really need to cut road (freight and private travel) and air travel, so our PM will have to rethink his anti-public transport position and encourage urban restructuring to reduce the need for travel, while also accelerating roll-out (and smart utilisation) of the NBN so we can replace physical movement by virtual travel. NBN is really the highway of the 21st century, but it needs to be fast and high capacity.

Residential emissions also have to be a major focus: there is scope to link action on vulnerable households to abatement. A major focus on existing homes, as well as much stronger (and enforced) regulations and incentives for new buildings (especially apartments) will also be necessary: this will be interesting, as many in the building industry still seem reluctant to act in this area.

Low embodied emission building materials will also have to receive much more attention than in the past. There are exciting developments in this space, including advanced engineered timber, low emission concrete replacements, and optimised structural design.

The mining sector will also have to cut emissions: the growing LNG export sector will place increasing pressure on emissions, as this is a very greenhouse-intensive process. When the Queensland LNG plants come onstream in the next few years, emissions from the LNG industry alone could exceed 30 Mt, around three times the recent level. The Qld LNG industry is more greenhouse intensive, as it uses coal-fired grid electricity for much of its input energy, instead of gas. Around 40% of the mining industry’s present emissions are from electricity use, while (subsidised) diesel fuel is over a quarter. The industry will need to enthusiastically adopt energy efficiency and renewables to cut those emissions!

It seems that, regardless of who is in government, we are in for some big changes as we begin to respond to climate change. Many powerful business groups will have to face some very different realities. Unless those in government choose to allow them to use lots of cheap international carbon offsets so they can remain asleep at the wheel.

Alan Pears is one of Australia’s best regarded sustainable energy experts. He is a senior industry fellow at RMIT University and associate consultant at Buro North. This article was first published in Renew magazine, reprinted with permission of author.

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26 Comments
  1. juxx0r 4 years ago

    “The metals sector (dominated by aluminium smelting) is a key sector: as documented by the Australia institute, aluminium smelting is subsidised, so cutbacks there will help the economy and cut emissions.”

    I’d love to see the see the study where it says that by transporting the raw materials offshore and then smelting it offshore reduces total emissions?

    • Geoff James 4 years ago

      Well, more shipping would be needed for the raw materials compared to the processed metals, so that would increase the emissions. On the other hand, many countries have lower-emission electricity than Australia, notably including China (about 68% fossil fuels compared to us about 86%). That would reduce the emissions by, I suspect, a much greater amount. It isn’t easy to power a smelter by renewable energy because the output should be steady to avoid pots going solid. Best, then, to put the smelter in a place where the electricity is already as clean as possible. This was one reason for Tasmania’s expansion of hydro power 50 years ago.

      • juxx0r 4 years ago

        I’m familiar with the concepts, just can’t wait to read the study since it’s stated as a fact.

        • Geoff James 4 years ago

          Yes until someone does the numbers properly it’s just an educated guess. I think I’m right that smelting in China is better if the aluminium is destined for the Chinese market – do we send it there? For aluminium destined for Australia, it’s an interesting question, whether it’s better to smelt in China at present emission intensities of electricity. I’m doing a separate study that involves the emissions of shipping, so when I have those numbers I can have a go at it – but someone else feel free to jump in please.

          • juxx0r 4 years ago

            Well righto, are we shipping alumina or bauxite? Given that bauxite uses a metric shit-tin of caustic, and caustic comes from electricity, we should export the bauxite, but are we then going to have to Import hydrochloric acid?

            Also export grade Bauxite is roughly 38% Al2O3 plus, are we going to have to high grade the mines? Will this lead to more pollution as we have to open new mines to take up the shortfall, since we usually treat low 30’s grade in country?

            Like i said, can’t wait to read the study.

          • Geoff James 4 years ago

            Brilliant – you know the industry, I know electricity, let’s do the study! Just need a paying client because I’m not employed by any institute. If anyone with an interest is reading this please let us know… and convince me that there are new opportunities for Australians who would lose their jobs.

          • Alastair Leith 4 years ago

            Would make an excellent chapter in the BZE Zero Carbon Australia Industrial Processes Plan if that materialises. As would green concrete, green steel (several alternative processes in development that researches suggest could end up cheaper than smelting with coal if whole of industry took it up and volumes and learnings got it down the cost curve), and about a thousand other critical chemical/physical industrial processes going on in the modern world.

      • Smurf1976 4 years ago

        Considering China specifically, simply adding another smelter does nothing to increase renewable energy production so any increase in electricity generation thus comes from coal. And, of course, if China is going to ramp up renewables then they don’t need to boost their already huge energy consumption to do it, they could just use the renewables to replace existing coal. Same concept in Australia.

        As such, smelting aluminium in Qld or China would use the same amount of coal-fired power in practice assuming the smelter itself has comparable efficiency. Neither has a surplus of renewables with which to power a smelter and neither is likely to be in that position for quite some time.

        From a pure economic perspective the idea of closing smelters here and just selling the raw materials is crazy in my opinion. The last thing we need to do is to put more heavy industry in China either economically or environmentally.

        • Geoff James 4 years ago

          I agree it’s a pity to sell raw materials without adding any value. The 2012 RE article Alastair cites above is a good summary of why, sadly, we’re losing the fight with aluminium. I think you’re mistaken about coal-fired (or gas-fired) power used for smelting – moving to China would immediately reduce emissions due to today’s energy mix, and China has policy settings that can increase this gap. But I think Australia will be able to close the gap again. Just need to manage until then.

          • Smurf1976 4 years ago

            I’d be highly surprised if China wasn’t already fully utilising the hydro and other renewable energy sources they have built. Just about everywhere else does that, use the renewables (cheap to run) in preference to coal. Same with nuclear. As such, any increased load in China will be supplied from coal unless they decide to build more renewables or nuclear specifically to power a smelter (that is, they won’t build the renewables or nuclear if the smelter isn’t also built).

            The same applies within Australia by the way. Build a new smelter in Tasmania and, in practice, virtually all the power it uses would be from coal and much of that will be from power stations in NSW. Tassie hydro is fully utilised, and will remain fully utilised, regardless of what happens to local load (within the limits of Vic – Tas transmission).

      • Ronald Brakels 4 years ago

        Geoff, power has to be maintained to the smelter, but it is safe to cut power by about 80% and let them sit, which makes them quite flexible as far as industrial processes go. Of course, if smelters pay a flat rate for electricity they won’t have much of an incentive to do this.

        • Geoff James 4 years ago

          Thanks Ronald, that’s very helpful to know.

    • Alastair Leith 4 years ago

      Tony Woods is not what I’d call a Climate Activist but he had this to say on bauxite refining and alumina smelting:
      http://grattan.edu.au/news/less-cost-less-coal-why-global-rivals-are-killing-australian-aluminium/

      I imagine the energy costs of smelting and even refining would be far higher than transportation even if was half way around the world but the emissions I’m not so sure about, burning diesel is pretty intense GHG emissions for such a large mass of rock.

      plus locally:
      https://reneweconomy.com.au/2012/iceland-a-100-renewables-example-in-the-modern-era-56428

    • Ronald Brakels 4 years ago

      Juxx0r, the context is Australian emissions and reducing aluminium smelting here would definitely reduce Australian emissions. As for world emissions, that can get more compex as there are several ways to look at it and tally up the net effect, but I will point out that Australia’s aluminium is among the most CO2 intensive in the world and the energy costs of ocean transport are quite low compared to smelting. These days a bulk carrier might only use 4 liters of fuel oil to move one tonne one thousand kilometers. That’s less than $2 in fuel cost at today’s prices. It takes at least 13,000 kilowatt-hours to smelt one tonne of aluminium. At 4 cents a kilowatt-hour that comes to $520. (Of course, it takes more than one tonne of bauxite to produce one tonne of aluminium.) As smelters are located where they can get deals on cheap electricity, most bauxite production is transported by ship.

      • juxx0r 4 years ago

        I realise the context, but to say you’re going to cut emissions, thereby implying you’re helping the environment, when you’re not helping the environment is basically a lie, so to restrict the context to make it true i dont feel is helpful.

        Stating opinions as facts i dont think is helpful either.

        We need to look at the entire lifecycle of mine to metal to understand whether exporting Bauxite, Alumina or Aluminium has the lowest emissions intensity. There’s no point high grading a mine in Australia, so that we have to open two others in Indonesia to fill the gap, whilst we fill up on Smug, happy that we’ve reduced emissions when we’ve only exported them, or made them worse.

        Show me the study, or lets not pretend that this statement of fact is a fact. Alastair’s link below compares power intensity to the average power intensity (of carbon), where it’s not likely that additional capacity will get average, and more likely will get worst case.

        And on your last point, Bauxite isn’t smelter feed, it’s Alumina. Alumina comes from the treatment of bauxite with prodigious quantities of Caustic, which is chemical electricity itself. We need to look at this energy consumption too, and it’s byproduct use in a holistic energy balance of Aluminium production which would obviously vary by ore, grade, recovery, reagent consumption, location etc etc.

        • Ronald Brakels 4 years ago

          Juxx0r, so in your opinion, if Australia stopped all aluminium smelting right now, you think that might not reduce Australia’s greenhouse gas emissions?

          • juxx0r 4 years ago

            Of course i dont. Does that mean it’s a good thing to do? How much pollution should we export?

          • Ronald Brakels 4 years ago

            Okay. So are you upset with Alan for not expanding on his sentence, “The metals sector (dominated by aluminium smelting) is a key sector: as documented by the Australia institute, aluminium smelting is subsidised, so cutbacks there will help the economy and cut emissions.” or is this something you’d like to see investigated in a different article?

          • juxx0r 4 years ago

            I did say, repeatedly, that i’d love to see the study on this, because i just dont believe it.

          • Ronald Brakels 4 years ago

            So a link maybe?

          • juxx0r 4 years ago

            Pics or it didn’t happen.

            And I’m not upset, i just think that in this world where people (like Tony and Mr Hunt) can say whatever the hell they like with complete impunity, then we need to be better than them, deal only with facts and be able to back up our statements.

          • Ronald Brakels 4 years ago

            Tragically a lie can make its way around the world while the truth is still drafting its first footnote.

          • JonathanMaddox 4 years ago

            Well I don’t know if this is “the study” that you’re talking about, and it’s 13 years old, but I read it when it was new(ish) and it’s a model of clarity; I urge anyone interested to read it.

            http://www.tai.org.au/documents/dp_fulltext/DP44.pdf

            Of course many things have changed in the last 13 years, not least the expiry of subsidised power arrangements for several of Australia’s smelters, the subsequent closure of two of our older, more marginally viable smelters, the opening of numerous more efficient smelters elsewhere in the world, and an emerging awareness that aluminium smelters can provide very flexible power demand if required.

          • juxx0r 4 years ago

            That’s close.

            I want to know if by exporting bauxite or alumina whether that changes the grade profile of the mine and we end up with twice the number of mines because suddenly they’ve only got half the contained metal. Sometime minimising costs leads to minimising environmental impacts too.

            I also note that the carbon intensity of our electricity grid has changed for the better since that study and Asia has got worse. Brazil is still killing it.

            If we were to export, i hope it would be to Brazil.

            Thanks for the link.

  2. Paul Turnbull 4 years ago

    I agree Alan nothing easy about meeting this low ball target. Given the childish thinking associated with direct action, the removal of the best climate change thinkers from positions of influence and lack of clear thinking to help inform the community of what generates carbon and how to stop it – there is hopefully recognition that a monumental effort is required. Without it we are all doomed.

  3. Ian 4 years ago

    Aluminium smelting may be high in electricity usage but it can be a perfect load for the existing coal powered generators allowing them to bow out gracefully as the rest of the network becomes renewables powered. We as a country have huge solar resources, not far from the coastal areas where aluminium is produced and exported. We cannot export electricity like Germany or Norway, but we can export aluminium. If the Saudis and others are anything to go by in terms of solar installed at $50/MWH or 5c / KWH then solar and pumped storage and wind could supply aluminium industry with very cheap renewable power in the long run. So don’t chuck out the baby with the bath water.

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