Scottish greenhouse gas emissions annual target report: 2016

Part 3: Net Scottish Emissions Account (NSEA) for 2016

Requirements of the Act

Section 34 of the Act requires that the report:

• state the amount of the net Scottish emissions account for the target year (subsection (3)(a)^[17]).
• state the proportion of the reduction in the net Scottish emissions account which is accounted for by reductions in net Scottish emissions (subsection (3)(b)).
• state the total amount of carbon units:
  • that have been credited to or debited from the net Scottish emissions account for the target year (subsection (3)(c)(i));
  • that have been purchased in the target year (subsection (3)(c)(ii));
  • that have been held and not surrendered in the target year (subsection (3)(c)(iii)).
• give details of the number and type of those carbon units (subsection (3)(d)).
• for each year in the period 2011-2050^[18].
  • state the amount of the NSEA for each preceding target year (subsection (5)(a));
  • state the cumulative amount of the net Scottish emissions account for the target year and all preceding target years (subsection (5)(b)).

Amount of the Net Scottish Emissions Account for 2016

Achievement of Scotland's greenhouse gas emissions targets is measured against the level of the net Scottish emissions account (NSEA). The NSEA is defined in the Act as the aggregate amount of “net Scottish emissions” of greenhouse gases, reduced / increased by the amount of carbon units^[19] credited to / debited from it in accordance with the Carbon Accounting Scheme Regulations made under the Act^[20].

Table 4 provides the amount of the net Scottish emissions account in 2016, including the total amount of carbon units that have been credited to or debited from the NSEA as the result of the operation of the EU ETS in Scotland.

Table 4: Net Scottish Emissions Account for 2016 (tCO₂e)

Greenhouse Gas Inventory	Net Scottish emissions – see table 2 (C)	38,574,259
Carbon Units	Number of units to be credited to or debited from the NSEA - see table 6 (D)	2,906,763 debited to NSEA
NSEA	C + D	41,481,022

Based on the NSEA, Scotland's emissions increased by 2.5 per cent in 2016 on the previous year. The longer term trend to date shows a reduction of 45.2 per cent from the 1990/1995 baseline period.

Proportion of the reduction in the net Scottish emissions account which is accounted for by reductions in net Scottish emissions

Section 8 of the Act places a duty on the Scottish Ministers to ensure that reductions in net Scottish emissions of greenhouse gases account for at least 80 per cent of the reduction in the net Scottish emissions account in any target year – the “domestic effort target”. In effect, this ensures that the majority of the action to meet emission reduction targets is taken domestically, rather than by offsetting domestic emissions through the purchase of international credits.

There are two mechanisms by which carbon units can be credited to / debited from the NSEA.

i As the result of the operation of the EU Emissions Trading System (EU ETS) in Scotland. The details of this mechanism are set out in the Annex to this report.
ii. Ministers may credit to the NSEA any international carbon units purchased by them, thereby offsetting domestic emissions. The Climate Change (Limit on Carbon Units) (Scotland) Order 2011^[21] sets limits for the period 2013-2017 which allows Ministers the option to purchase (credit) up to 199,000 carbon units in 2016 in addition to credits or debits to the Scottish account through the operation of the EU ETS.

For the specific purpose of ascertaining whether the domestic effort target has been met, the Act stipulates that the use of carbon units through the operation of the EU ETS is treated as though it is a reduction in “net Scottish emissions”.

For the purposes of the domestic effort target, in 2015 and 2016 the net Scottish emissions and net Scottish emissions account are the same. This is because no units were credited to the NSEA in either of the years as a result of the purchase of international carbon units. This means that the change in net Scottish emissions of greenhouse gases accounts for 100 per cent of the change in the net Scottish emissions account in the 2016 target year (see Table 5).

Table 5: Change in net Scottish emissions (including the operation of the EU ETS) between 2015 and 2016 as a proportion of the change in the Net Scottish Emissions Account between 2015 and 2016

Target Year	Net Scottish Emissions[22]	Net Scottish Emissions Account	Proportion of the change in the NSEA which is accounted for by changes in Net Scottish emissions
2015	40,459,167	40,459,167	100%
2016	41,481,022	41,481,022
Change between 2015 and 2016	1,021,855	1,021,855

Carbon Units credited or debited to the NSEA

Table 6 sets out the effect of the EU ETS on the NSEA in 2016. Further detail on this mechanism are set out in the Annex to this report.

Table 6: The effect of the EU ETS on the Net Scottish Emissions Account in 2016 (tCO₂e)

Total amount of units surrendered from fixed installations[23]	10,262,263
Estimate of surrendered CO2 emissions from domestic aviation	478,157
Estimate of surrendered CO2 emissions from international aviation	1,425,305
Total estimate of surrendered emissions (E)	12,165,725
Fixed installations cap	13,707,475
Domestic aviation cap	443,255
International aviation cap	921,758
Total 2016 EU ETS cap (“Specified Amount”) for Scotland (F)	15,072,488
Number of units to be credited or debited from the Net Scottish Emissions Account (E - F) [24 25]	2,906,763 debited to NSEA

Table 7 sets out carbon units which have been purchased, and carbon units which have been held and not surrendered.

Table 7: Total amount of carbon units which have been purchased, and those that are held and not surrendered, 2016

	Number of Units	Type of Units
Number of carbon units purchased	0	Not applicable
Number of carbon units held and not surrendered	0	Not applicable
Amount of carbon units credited to the Net Scottish Emissions Account	0	Not applicable

Amount of the NSEA for each preceding target year and cumulative amount of the net Scottish emissions account for the target year

Table 8 sets out the amount of the net Scottish emissions account for the target year and each preceding target year based on the 1990-2016 greenhouse gas inventory. Table 8 also states the cumulative amount of the net Scottish emissions account for the target year.

Table 8: Amount of the Net Scottish Emissions Account for each target year and the cumulative amount of the Net Scottish Emissions Account for the target year (tCO₂e)

Target Year 2010	54,721,617
Target Year 2011	52,045,625
Target Year 2012	54,226,803
Target Year 2013	45,157,876
Target Year 2014	39,541,084
Target Year 2015	40,459,167
Target Year 2016	41,481,022
Cumulative 2010-2016	327,633,193

Adjustments to net Scottish emissions account for earlier target years and cumulative amount of the net Scottish emissions account for all preceding target years

Table 9 contains data on revisions to previously reported estimates of the NSEA for earlier target years, together with the revised amount and reason for any revision. These represent revisions to 1990-2015 inventory estimates published in the Annual Target Report for 2015. Revisions arising from previous inventory reports are available in previous annual target reports^[26].

Table 9: Revisions to Net Scottish Emissions Account for earlier target years (tCO₂e)

Target year	Net Scottish Emissions Account estimate reported in the 2015 Annual Target Report	Revision required	Revised Net Scottish Emissions Account estimate
For the 1990-2016 Inventory
2010	60,780,578	-6,058,961	54,721,617
2011	58,463,949	-6,418,324	52,045,625
2012	59,138,499	-4,911,696	54,226,803
2013	50,491,177	-5,333,301	45,157,876
2014	44,696,804	-5,155,720	39,541,084
2015	45,504,443	-5,045,276	40,459,167
Reason for Revision. This follows similar revisions to the net Scottish emissions as described in Part 2 of this report, and described in more detail in the Official Statistics Release Scottish Greenhouse Gas Emissions 2016.

Table 10 shows the revisions to the cumulative amounts of greenhouse gas emissions for preceding target years.

Table 10: Revisions to Cumulative Amounts in Preceding Target Years. All Values in tCO₂e

TARGET YEAR	Cumulative Amount previously reported	Revision required	Revised Cumulative Amount (G)	Net Scottish Emissions Account for the Target Year (H)	New Cumulative Amount (G + H)
2010	Not Applicable	Not Applicable	Not Applicable	54,713,907	54,713,907
2011	54,713,907	+1,178,969	55,892,876	54,251,910	110,144,787
2012	110,144,787	+2,441,212	112,585,998	55,665,180	168,251,178
2013	168,251,178	+7,845,364	176,096,542	49,724,807	225,821,349
2014	225,821,349	-9,171,741	216,649,608	41,885,736	258,535,344
2015	258,535,344	+15,035,663	273,571,007	45,504,443	319,075,450
2016	319,075,450	-32,923,279	286,152,171	41,481,022	327,633,193

Impact of inventory revisions on reductions required to meet annual emissions reduction targets

Statutory fixed annual targets for 2010-2027 were set on the basis of the 1990-2008 inventory, which was the latest inventory available at the time. This estimated baseline emissions to have been 70.201 MtCO₂e and the 2020 target was set at 40.717 MtCO₂e, which equated to a 42 per cent reduction in line with the level of the 2020 interim target set by the Act. Successive revisions mean that reductions required to meet each of the fixed annual targets are now significantly greater than was envisaged when the targets were set. For example, to reach the 2020 annual target now equates to a 46.2 per cent reduction in emissions (Table 11).

Table 11: Annual Targets for the period 2010-2027

Year	Targets (in tCO2e)	Percentage reduction against 1990 baseline when targets were set - using the 1990-2008 inventory	Percentage reduction against 1990 baseline – based on latest (1990-2016) inventory
2010	53,652,000	-23.6%	-29.1%
2011	53,404,000	-23.9%	-29.4%
2012	53,226,000	-24.2%	-29.7%
2013	47,976,000	-31.7%	-36.6%
2014	46,958,000	-33.1%	-38.0%
2015	45,928,000	-34.6%	-39.3%
2016	44,933,000	-36.0%	-40.6%
2017	43,946,000	-37.4%	-41.9%
2018	42,966,000	-38.8%	-43.2%
2019	41,976,000	-40.2%	-44.5%
2020 (year of interim target)	40,717,000	-42.0%	-46.2%
2021	39,495,000	-43.7%	-47.8%
2022	38,310,000	-45.4%	-49.4%
2023	37,161,000	-47.1%	-50.9%
2024	35,787,000	-49.0%	-52.7%
2025	34,117,000	-51.4%	-54.9%
2026	32,446,000	-53.8%	-57.1%
2027	30,777,000	-56.2%	-59.3%