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Denmark's Third National Communication on Climate Change

5 Projections and the total effect of policies and measures

5.1 Introduction and overall effect of policies and measures

According to the EU's burdenssharing agreement, Denmark must reduce greenhouse gas emissions by 21% in the period 2008-2012 in relation to the base year 1990/95 under the Kyoto Protocol.

In connection with the agreement, Denmark took reservation in a declaration for the effects of a large import of electricity from Norway and Sweden in the base year 1990, which resulted in Denmark emitting 6.3 million tonnes CO₂ less than would have been the case if the electricity had been produced in Denmark. The Danish position was, and is, that a fortuitous event such as a large electricity import in a single year should not mean that Denmark's reduction obligation in relation to the EU should be calculated on the basis of the random low emissions in 1990. In March 2002 Denmark had to accept a Council decision that binds Denmark legally to a reduction of 21% in relation to the emissions in the base year, which has not been adjusted for the electricity import.

Denmark was, however, assured in a political declaration from the EU Council of Ministers and the European Commission that the assumptions relating to base year emissions will be taken into account in connection with fixing the permitted amount of emissions in 2006, measured in tonnes of CO₂ equivalents. The government will therefore work to ensure that Denmark's reduction burden in 2008-2012 corresponds to 21% of the 1990 level adjusted for electricity import, corresponding to 5 million tonnes CO₂ equivalents per year.

The shortfall in respect of fulfilling Denmark's obligations with the existing policies and measures has been calculated partly for a situation in which account is taken of the electricity import in 1990 and partly for a situation in which account is not taken of this.

The projections are based on a number of sector-specific projections of the domestic emissions for this period. These emissions depend on the scope of economic activity in all sectors of society, energy prices, technological development and the legislation regulating the various activities with respect to environment, energy efficiency, etc. The main assumptions include the Ministry of Finance's estimate concerning economic development1 and the IEA's expectations concerning future energy prices2. In addition, the projections are based on already adopted regulation of various sectors, including the environmental regulation of agriculture and the energy sector.

According to the latest inventories of greenhouse gas emissions, Denmark's reduction obligation of 21% means that the emissions must be reduced from 69.5 million tonnes CO₂ equivalents in the base year 1990/95 to 54.9 million in the period 2008- 2012.

The latest projections from February 2003 cover the period 2001-2017 and are reproduced in Appendix B. However, the calculations for the period 2013 - 2017 must be described as somewhat less certain than the projections up to 2013, in part because of the uncertainty concerning the policies and measures and their expected effect increases with time. In addition, new projections have not been carried out for the agricultural sector after 2012. The projection is a "with measures" projection that includes initiatives that can be expected with reasonable certainty to be implemented without further political action in the form of legislation, political agreements or similar. The projection must therefore not be confused with the most probable development because it does not take account of new political initiatives that could be taken according to the government's climate strategy, February 2003, which was adopted by the Folketing on 13 March 2003. It should be noted that the latest historical inventory of greenhouse gas emissions covers the period 1990- 2001, for which reason the projection for 2001 in this report has been replaced by the historical inventory for 2001.

Since this new inventory also includes an update of the 1990 figures as a consequence of new knowledge, the base year - and thus also the shortfall - has been changed slightly in relation to the inventory in the climate strategy.

Denmark's expected annual emissions in the period 2008-2012 have been calculated to be 80.1 million tonnes CO₂ equivalents. As will be seen from table 5.1, the size of the total greenhouse gas emissions depend greatly on CO₂ emissions associated with electricity export, which is estimated to be 9.9 million tonnes CO₂ equivalents per year in the period 2008-2012.

Table 5.1.
Denmark’s expected greenhouse gas emissions

5.2. Energy, including transport and the domestic sector

In this section the projection of the emissions of CO₂, CH₄ and N₂O from combustion of fuels and from gaseous emissions from fuels is described. The projection includes all fuel-consuming sectors, including the transport sector and industry. The projection is based on a projection of the development in energy consumption in the period 2002-2017. The emissions of CO₂, CH₄ and N₂O have been calculated by multiplying the energy consumption by emission factors.

The projection of energy consumption is based on the initiatives described in sections 4.2.1 - 4.2.3 and 4.2.5 being implemented and on no further initiatives being implemented. It should therefore be seen as a "with measures" projection. Figure 5.1 and table 5.2 show the development of total energy consumption (excl. fuels for non-energy purposes) with this assumption, broken down by sector.

Figure 5.1
Gross energy consumption 1990-2017, 1990-2001 observed

Source: Danish Energy Authority

In years with ample precipitation Denmark is a net importer of electricity produced at Norwegian and Swedish hydropower stations, while in years with scanty precipitation, it is a net exporter of electricity to Norway and Sweden. This has resulted in large fluctuations in the observed Danish gross energy consumption in the period 1990-2001.

Table 5.2
Gross energy consumption 1990-2017, 1990 and 2001 are observed

Source: Danish Energy Authority
   

Figure 5.2
Gross energy consumption 1990-2017, 1990 and 2001 are observed

Energy consumption is expected to grow within most business sectors and transport in the next 15 years, but to fall slightly in the domestic sector. The energy sector's consumption has been calculated excluding fuels for production of electricity for export because this consumption figures separately, but the calculation includes flaring. Domestic electricity consumption is expected to grow, which is also reflected in the gross energy consumption in the energy sector up to 2013. Thereafter, the sector's energy consumption falls because a number of primary coalfired stations are expected to be replaced by new, more efficient CHP plants, about half of which are expected to use natural gas as fuel.

As will be seen, the big increase in total energy consumption in the first part of the projection period is due to a big increase in electricity exports. This increase is expected partly because the price of electricity on the Nordic electricity market is expected to rise and partly because the existing national CO₂ Quota Act for the electricity sector only has an effect up to and including 2003. With that, it will be more attractive for the electricity sector to export electricity.

Figure 5.2 shows the development of total energy consumption, broken down by fuels, which determine the size of CO₂ emissions because the fuels have very different emission factors.

The increase in the quantity of renewable energy up to the year 2004 is due primarily to expansion of wind turbines, while the increase in oil consumption can be attributed mainly to growth in the transport sector. With the new power stations, natural gas consumption increases from 2014 at the expense of coal consumption. This change means a reduction in CO₂ emissions because natural gas has far lower emission factors than coal.

As will be seen later, with the expected development of energy consumption the CO₂ emissions from Danish territory will exceed the Kyoto objective for 2008-2012. An EU Directive on trading with CO₂ emissions from electricity and heat production, together with fuel consumption in certain sectors of industry, is expected to play a vital role in costeffective achievement of Denmark's Kyoto target. Table 5.3 shows the resulting emissions of CO₂, CH₄ and N₂O from the energy sector in the "with measures" projection. The emissions of CH₄ and N₂O calculated as 1000 tonnes are CO₂ equivalents. Appendix B contains detailed tables showing the results of the projections.

Table 5.3
"With measures" projection, 1990-2001 observed

Source: 1990-2001: National Emission Report (NIR), National Environmental Research Institute, April 2003, 2002-2017: Environmental Project No. 764, Danish Environmental Protection Agency, February 2003 and Danish Energy Agency

5.3. Business sector

Besides the greenhouse gas emissions mentioned in section 5.2, industrial processes include a number of activities that emit greenhouse gases. This section covers emissions connected with production of cement, chalk and bricks, together with emissions of the industrial gases HFCs, PFCs and SF₆.

The projection of the emissions is based on implemented and adopted policies and measures, described in chapter 4, including a statutory order on phasing out certain industrial gases. This statutory order will result in a reduction in greenhouse gas emissions of, on average, 1.1 million CO₂ equivalents per year in the period 2008-2012. It is covered by a ban on the use of HFC as a coolant in the retail trade and stationary A/C systems from 1 January 2007, except for refilling of existing systems, and as a foaming agent in PUR foam from 1 January 2006.

5.4 Agriculture

16% of Denmark's greenhouse gas emissions in 2001 consists of methane and nitrous oxide, which are primarily emitted by agriculture. The methane and nitrous oxide emissions are not taxed and are only regulated indirectly via the regulation of the effect on the aquatic environment of nitrogen losses from agriculture, e.g. in the Action Plan for the Aquatic Environment II. Further possibilities for reduction of the methane and nitrous oxide emissions in the agricultural sector have not been sufficiently identified at present. More knowledge is needed on both technical possibilities for reduction and the associated costs.

Owing to the EU's milk quotas and the increasing productivity within dairy farming, the cattle population is expected to fall by 1.8% per year to 524,000 dairy cows in 2010. In pig farming, on the other hand, production is expected to rise by 1.5 % per year. This will result in increased production of fatteners to just over 26 million in 2010. In total, the fall in cattle population and the rise in pig population are expected to result in a small increase in the total quantity of manure.

Total agricultural land is expected to fall by 0.3% per year. In addition, the planned afforestation area has been deducted. It is also assumed that agricultural land used for organic farming will reach 220,000 ha in 2010. The area with set-aside crops according to the EU's subsidy schemes is estimated to be 7% of the total agricultural area in the entire projection period.

Increasing productivity of individual cows means a rise in the emissions coefficient for methane from dairy cows from 102 kg methane/cow/year in 1990 to 117 kg methane/cow/year in 2010. However, this is more than balanced by the fall in the population of dairy cows, and the result is a fall in methane emissions (table 5.6).

5.4.2 Nitrous oxide

The fall in nitrous gas emissions shown in table 5.7 can be attributed particularly to reduced use of nitrogen fertilisers and a fall in nitrogen leaching and ammonia evaporation, which are effects of the action plans for the aquatic environment area. It is assumed that the aquatic environment action plans (Action Plans for the Aquatic Environment I and II) will be fully implemented in 2003.

Table 5.4
Industrial greenhouse gas emissions (HFCs, PFCs and SF₆), 1990-2001 observed.

Table 5.5
Emissions from cement, chalk and brick production, 1990-2001 observed

Table 5.6
Methane emissions from agriculture in the period 1990 to 2015, 1990-2000 observed

Table 5.7
Nitrous oxide emissions from agriculture in the period 1990 to 2015

5.5 Forestry

The projections for CO₂ sequestration in forests are based on an assumption that the present subsidy structure and financing are maintained until the end of 2012. So far, financing has been made available until the end of 2003, and political commitment for public financing and/or access to alternative sources of financing for private afforestation may be available even beyond 2003. Table 5.8 shows the expected rate of afforestation in selected years up to 2020. Indeed, the rate of private afforestation will depend on the economic conditions in the agricultural sector, and, as the marginal agricultural localities are planted over time, a saturation point may be reached where the existing subsidies no longer provide an incentive for further afforestation.

5.6 Waste

The objective of the waste plan - Waste 21 - is to reduce the proportion of waste going to landfill sites from 2.1 million tonnes (16%) in 1997 to 1.5 million tonnes (12%) in 2004. As mentioned earlier, this target was already achieved in 2000. The net methane emissions (produced methane less recovered methane) from Danish landfill sites is calculated to be 62,400 tonnes in 1990, rising to 65,500 tonnes in 1994 and then steadily falling to 38,900 tonnes in 2012. The average annual net methane emissions from landfill sites in 2008-2012 correspond to about 0.9 million tonnes CO₂ equivalents. There are no emissions of methane from wastewater in Denmark because wastewater is treated with aerobic processes.

Table 5.8
Afforestation area and CO₂ sequestration since 1990 and forecasts for selected years over the next 20 years³

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Table 5.9
Methane emissions from landfill sites in the period 1990 to 2012, 1990-2001 observed.

5.7 Total emissions

5.7.1 Total carbon dioxide (CO₂) emissions

Table 5.9 shows the expected development of CO₂ emissions, while Appendix B gives a more detailed projection. The biggest source of CO₂ emissions in Denmark is combustion of fossil fuels, including electricity and heat production and transport. The transport sector has had the biggest increase in CO₂ emissions since 1990, and the emissions are expected to continue rising for the whole of the projection period. The CO₂ emissions from the transport sector were 10,404 Gg in 1990 and rose to 12,077 Gg in 2001, while in the period 2008-2012 it has been calculated that the average annual CO₂ emissions will be 13,727 Gg. The emissions from energy production, including conversion and distribution, fluctuated in the period 1990- 2001 due to greatly varying electricity export/import. The CO₂ emissions from energy production were 26,202 Gg in 1990 and 26,375 Gg in 2001, while for the period 2008-2012 it has been calculated that the average annual CO₂ emissions will be 35,405 Gg, of which 9,900 Gg can be attributed to electricity production for export.

Table 5.10
Projection of Denmark’s CO₂ emission 2000-2017 and observed emission in 1990, 2000 and 2001

The total CO₂ emissions without land-use change and forestry (LUCF) was 52,659 Gg in 1990 and 54,355 Gg in 2001, while for the period 2008-2012 it has been calculated that the average annual CO₂ emissions will be 65,921 Gg.

5.7.2 Methane, CH₄

Most of the methane emissions come from farm animals' digestive systems. The reduced emissions from 1990 to 2001 and continued reduction in the projection period can be attributed mainly to a smaller cattle population. The second-largest source of methane emissions are landfill sites, where emissions also decreased from 1990 to 2001. However, the energy sector's methane emissions increased considerably in the same period due to increased use of gas engines. Total methane emissions were 5,672 Gg CO₂ equivalents in 1990 and 5,606 CO₂ equivalents in 2001, while in the period 2008-2012, is has been calculated that the average annual emissions will be 4,979 CO₂ equivalents.

Table 5.11
Projection of Denmark’s methane emissions 2002-2017, 1990-2001 observed

5.7.3 Nitrous oxide, N₂O

Agriculture is by far the biggest source of emissions of nitrous oxide because this can form in soil through bacterial conversion of nitrogen in fertiliser and manure spread on fields. The main reason for the reduction in total nitrous oxide emissions from 10,843 Gg CO₂ equivalents in 1990 to 8,749 Gg CO₂ equivalents in 2001 is a combination of the Action Plans for the Aquatic Environment I and II and the Action Plan for Sustainable Agriculture. In the period 2008-2012 calculations indicate average annual emissions of 8,738 CO₂ equivalents. The contribution from the transport sector and the energy sector to nitrous oxide emissions is expected to rise, while the contribution from agriculture is expected to fall slightly in relation to 2001.

5.7.4 Industrial gases HFCs, PFCs and SF₆

In accordance with the possibilities offered in the Kyoto Protocol, Denmark has chosen 1995 as the base year for emissions of the industrial gases HFCs, PFCs and SF₆. The total emissions of these gases were 344 Gg CO₂ equivalents in 1995 but double that - 793 Gg CO₂ equivalents - in 2000. In 2001 the emissions fell to 700 CO₂ equivalents.

Table 5.12
Projection of Denmark’s nitrous oxide emissions 2002-2017, 1990-2001 observed

Table 5.13
Projection of Denmark’s industrial gas emission 2002-2017, 1990, 2000 and 2001 observed

Table 5.14
Greenland’s actual CO₂ emissions from combustion of fossil fuels and expected CO₂ emissions from electricity and district heat production

Source: Nukissiorfiit.

The main reasons for this were the introduction of a tax and legislation on phasing out import, production, and use of these gases. For the period 2008-2012 calculations indicate total average annual industrial gas emissions of 706 CO₂ equivalents. Thereafter, a considerable reduction is expected in HFCs, which are the largest contributor to industrial gas emissions, and overall this will result in a considerable reduction of industrial gas emissions after the first commitment period.

5.8 Greenland and the Faroe Islands

With respect to the expectations concerning future greenhouse gas emissions in Greenland, the projections cover only electricity and district heat production.

The projections for CO₂ emissions from electricity and district heat production are based on a projected increase in energy consumption of 1% up to 2005 and then stagnation. The projections are also based on the fact that a hydropower station is under construction and expected to go into operation in 2004 and that a further hydropower station is planned, which will go into operation in 2006. There are not at the present time any estimates of future greenhouse gas emissions on the Faroe Islands.

5.9 Methods used in the projections

The projection of energy consumption in the business sector and the public service sector is based on an ADAM/EMMA projection, while the domestic sector is projected on the basis of the bottom-up principle.

EMMA is a macro model that describes the final energy consumption broken down into a number of sectors and seven types of energy. It is based on historical experience with the behaviour of businesses and households and is documented in satellite models for ADAM, NERI Technical Report No. 148, DMU 1995.

In EMMA, energy consumption in the business sector is determined by three factors: production, energy prices/taxes and energy efficiencies/ trends. Increased production will increase the demand for energy input, whereas increased energy prices and taxes will pull in the direction of a more limited demand for the fuels. Improved energy efficiency will mean that production can be maintained using less energy, and in EMMA this results in reduced energy consumption.

The projection of production is based on the ADAM projection in the Economic Report, January 2002, covering the period 2000-2010. For the period 2011-2017 figures from the Financial Report 2001 have been used.

The domestic sector's energy consumption has been determined using the bottom-up models: the Electricity model for households and the Heating model for households. The projection is based on, among other things, expectations concerning growth in the housing stock and expectations concerning the development in the number of electric appliances.

The projection of electricity and heat production is based on the Danish Energy Authority's RAMSES model, using as the basis the demand for electricity and district heat according to the projection of the consumption sectors. In the projection, electricity and heat production is divided between existing and possible new production plants on the basis of technical and economic parameters. Industrial and local mini-CHP production is not projected in the RAMSES model so a separate (bottomup) projection has been made of this production.

Table 5.15
Average annual rate of growth in real production value of business in % in relation to the previous year

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The projection of road transport, rail transport, domestic ferries and freighters, together with domestic air transport is documented in the report "The transport sector's energy consumption and emissions", Danish Road Directorate, 2002. The projection is based on, among other things, the same economic assumptions as the EMMA projection above.

The armed forces' consumption of transport energy is kept at a level corresponding to the average for 1998-2001. International shipping and border trade with diesel are kept at the 2001 level.

Tables 5.14, 5.15 and 5.16 show a number of key figures and key assumptions for the projection.

Additional information on the methods used in the projections is available in Environmantal Project No 764, published by the Danish Environmental Protection Agency in February 2003.

Table 5.16
Development of energy prices, excl. taxes, deflated

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Table 5.17
Index of growth in households and housing unit area in Denmark