National inventory by economic sector: data tables and methodology

About this inventory

The National Inventory by Economic Sector 2020 provides information on national emissions, disaggregated by the Australian and New Zealand Standard Industrial Classifications 2006 (ANZSIC; ABS cat. No. 1292.0).

The national emissions estimates are based on data published in the National Inventory Report 2020, submitted under the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol (KP). This framework classifies emissions according to Intergovernmental Panel on Climate Change (IPCC) process-based emission categories, which is prepared on a territorial basis.

The National Inventory by Economic Sector 2020 are prepared consistently with how the Australian Government will acquit its emission reduction commitments under the Paris Agreement. From this issue, we apply the 100-year time horizon GWP values from the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5) to estimate emissions. This is consistent with rules adopted under the UNFCCC Paris Agreement (Decision 18/CMA.1 Annex 2.D Paragraph 37).

The National Inventory by Economic Sector are part of Australia’s National Greenhouse Accounts. The accounts are comprised of the:

• Quarterly Update of Australia’s National Greenhouse Gas Inventory
• State and Territory Greenhouse Gas Inventories
• National Inventory by Economic Sector
• National Inventory Report prepared under the reporting provisions applicable to the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol (KP)

The emission estimates for these inventories are prepared in accordance with international guidelines and are subject to annual review by international experts. The methodologies for the estimation of emissions are in Australia’s National Inventory Report.

Applying economic classifications

The National Inventory by Economic Sector is prepared using standards and classifications maintained by the Australian Bureau of Statistics (ABS). This facilitates comparisons with other major sources of economic information in Australia.

In accordance with the Standard Economic Sector Classifications of Australia 2008 (SESCA; ABS Cat. No. 1218.0), the residential sector is defined as being consistent with the concept of ‘Households’. Corporations, government units and non-profit institutions are further disaggregated by industry using ABS Input-Output Industry Groups, which concord with the Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC; ABS Cat. No. 1292.0).

An emissions mapping methodology was developed in collaboration with the Department of the Treasury with technical advice from the Bureau of Infrastructure, Transport and Regional Economics and the Australian Bureau of Statistics.  Emissions are allocated wherever possible based on the primary activity of an emitting organisation. In most cases, an emissions activity under IPCC methods and classifications can be directly tied to an industry. For example, all agricultural emissions are allocated to the ‘Agriculture’ industry. Where this link is not apparent, for example for the use of transport fuels and refrigerants, an allocation is made to all industries and the residential sector using either information from the National Greenhouse and Energy Reporting (NGER) scheme, or economic modelling utilising the most recent version of the Supply-Use Tables (ABS Cat. No. 5217.0), their corresponding Input-Output Tables for product details (ABS Cat. No. 5215.0.55.001) and the Energy Account (ABS Cat. No. 4604.0) published by the Australian Bureau of Statistics, unless otherwise identified in Table 1 below.

Changes in Inventories in ‘Forest and Wood Product Stocks’ are also separately identified for forestry-related emissions and sinks, where the change in that reporting year is not related to economic activity. Carbon stock changes in forestry operations and harvested wood products are allocated based on the nearest analogue under the Australian System of National Accounts (ABS Cat. No. 5216.0) for growing stock in plantations. This disaggregation from emissions directly related to economic activity in the year improves the use of estimates in environmental-economic accounting. It also improves transparency for analysts seeking to separately identify the emission removals attributable to the forest estate that is or has been available to forestry activities.

Table 1: Mapping UNFCCC sectors to economic sectors

UNFCCC sector	Economic sector
Agriculture – Cultivation of Histosols	05 – Agriculture Support Services
Agriculture – All other emissions	01 – Agriculture
Stationary Energy – Public Electricity (fuel: landfill gas)	29 – Waste Collection, Treatment and Disposal Services
Stationary Energy – Public Electricity (fuel: bagasse)	11-12 – Food Product, Beverage and Tobacco Product Manufacturing
Stationary Energy – Public Electricity (fuel: wood and wood waste)	14-16 – Wood, Pulp, Paper and Printing
Stationary Energy – Public Electricity (fuel: fossil fuels)	Allocations are made to industries based on Scope 1 NGERS facility reporting.  The vast majority is to 26 – Electricity Supply.
Stationary Energy – Residential	NA – NT Residential (non-transport)
Stationary Energy – All other emissions	Allocated to the industry associated with the described activity, with economic modelling to further disaggregate where necessary.
Transport – Domestic Aviation	49 – Air and Space Transport
Transport – Domestic Navigation	48 – Water Transport
Transport – Off-road vehicles	NA – RT Residential (transport)
Transport – Pipeline Transport	48 – Water Transport*
Transport – Railways	47 – Rail Transport
Transport – Road Transport	Allocated across all sectors using economic modelling with ABS data.
Transport – Military Transport	N,O – Administration, Public Administration and Services
Fugitive emissions – Natural Gas, Distribution	27 – Gas Supply
Fugitive emissions – Natural Gas, Exploration	10 – Exploration and Other Mining Support Services
Fugitive emissions – Natural Gas, Post meter emissions	NA – NT Residential (non-transport)
Fugitive emissions – Natural Gas, Transmission and storage	48 – Water Transport*
Fugitive emissions – Oil, Crude Oil Transport	48 – Water Transport*
Fugitive emissions – Oil, Crude Oil Exploration	10 – Exploration and Other Mining Support Services
Fugitive emissions – Oil, Refining / Storage	17 – Petroleum and Coal Product Manufacturing
Fugitive emissions – Solid Fuels	06 – Coal Mining
Fugitive emissions – All other emissions	07 – Oil and Gas Extraction
Industrial Processes – Other uses of soda ash	Allocated between basic chemical and non-metallic mineral product manufacturing based on US Minerals data.
Industrial Processes – Lubricant use	Allocated across all sectors using economic modelling with ABS data.
Industrial Processes – CO₂ from wells	07 – Oil and Gas Extraction
Industrial Processes – Electrical Equipment	26 – Electricity Supply
Industrial Processes – Aerosols	NA – NT Residential (non-transport)
Industrial Processes – Fire Protection	N,O – Administration, Public Administration and Services
Industrial Processes – Commercial refrigeration	Allocated across all services industries using economic modelling with ABS data.
Industrial Processes – Domestic refrigeration	NA – NT Residential (non-transport)
Industrial Processes – Mobile air-conditioning	Allocated across all sectors using economic modelling with ABS data.
Industrial Processes – Commercial air conditioning	Allocated across all services industries using economic modelling with ABS data.
Industrial Processes – Domestic stationary air conditioning	NA – NT Residential (non-transport)
Industrial Processes – Transport refrigeration	46 – Road Transport
Industrial Processes – All other emissions	Allocated to the manufacturing industry associated with primary production of the industrial process concerned.
LULUCF – Forest Land remaining Forest Land: Slash burning	03 – Forestry and Logging
LULUCF – Forest Land remaining Forest Land: Carbon Stock Change, Direct N2O Emissions from N Mineralisation, and Nitrogen leaching and Run-Off.	INV – Changes in Inventories in Forest and Wood Product Stocks
LULUCF – Forest Land remaining Forest Land: Temperate Hazard Reduction Burning and Wildfire	N,O – Administration, Public Administration and Services
LULUCF – Grassland converted to Forest Land: Conversion burning and Wildfire	03 – Forestry and Logging
LULUCF – Grassland converted to Forest Land: Carbon Stock Change, Environmental Plantings	R – Arts and Recreation Services
LULUCF – Grassland converted to Forest Land: Carbon Stock Change, Hardwood Plantations and Softwood Plantations	INV – Changes in Inventories in Forest and Wood Product Stocks
LULUCF – Settlements converted to Forest Land	NA – NT Residential (non-transport)
LULUCF – Settlements	E – Construction
LULUCF – Land converted to Wetland	28 – Water Supply, Sewerage and Drainage Services
LULUCF – Wetland remaining Wetland: Non-temperate fire management, and Sparse Woody Vegetation	R – Arts and Recreation Services
LULUCF – Wetland remaining Wetland: N2O from Aquaculture Use	02 – Aquaculture
LULUCF – Wetland remaining Wetland: Seagrass	50-53 – Other Transport, Services, Postal and Storage
LULUCF – Harvested Wood Products	INV – Changes in Inventories in Forest and Wood Product Stocks
LULUCF – All other emissions	01 – Agriculture
Waste – Biological treatment of solid waste	18-19 – Basic Chemical, Polymer and Rubber Product Manufacturing
Waste – Waste incineration: Solvents	21 – Primary Metal and Metal Product Manufacturing
Waste – Domestic Wastewater: Sewered Population	28 – Water Supply, Sewerage and Drainage Services
Waste – Domestic Wastewater: Unsewered Population	NA – NT Residential (non-transport)
Waste – Industrial Wastewater: Food, Beverages and Tobacco	11-12 – Food Product, Beverage and Tobacco Product Manufacturing
Waste – Industrial Wastewater: Petroleum, coal, chemical and associated product	17 – Petroleum and Coal Product Manufacturing
Waste – Industrial Wastewater: Wood and paper product	14-16 – Wood, Pulp, Paper and Printing
Waste – All other emissions	29 – Waste Collection, Treatment and Disposal Services

* for alignment with the ABS I-O Tables, pipeline transport is aggregated with water transport

The National Inventory by Economic Sector 2020 allocates emissions estimates from within Australia’s territorial boundaries, consistent with the rules agreed under the UNFCCC and Paris Agreement. To obtain estimates on the basis of a production boundary, as used in the System of Environmental-Economic Accounting (UN SEEA), memo items on emissions from international aviation and marine bunker fuels would be added to the Air and Water Transport industries. An adjustment could also be made to the residential (transport) sector to account for the balance of international tourists in Australia and Australian tourists abroad, however the Department has assessed such an adjustment as having a negligible impact on emissions estimates.

We estimate emissions at a level of detail consistent with Input-Output Industry Groups.  This level of detail is not published due to the confidentiality provisions for data supplied under the National Greenhouse and Energy Reporting (NGER) Act 2007.

International guidelines

The National Inventory by Economic Sector 2020 is based on the national greenhouse gas emission estimates submitted to the UNFCCC for the Australian territory in the National Inventory Report 2020 between industries and the residential sector.

The national emissions estimates have been prepared consistent with the Revision of the UNFCCC reporting guidelines on annual inventories for Parties included in Annex I to the Convention agreed by the Conference of Parties at its nineteenth session (decision 24/CP.19). This includes the Intergovernmental Panel on Climate Change (IPCC) 2006 Guidelines for National Greenhouse Gas Inventories (IPCC 2006).

The methodologies used to estimate national emissions have been improved over time. They will continue to be refined as new information emerges, and as international practice evolves. In that context, the national emission estimation methods were also informed by:

• 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories (IPCC 2019)
• 2013 Supplement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories: Wetlands (IPCC 2013 Wetlands Supplement)

The aim is to ensure that the estimates of national emissions are accurate, transparent, complete, consistent through time and comparable with those produced in the inventories of other countries.

Categories in this inventory and the National Greenhouse Accounts are consistent with the UNFCCC and IPCC reporting guidelines.

Energy

The ‘Energy’ sector is made up of many different sources, including:

• ‘Stationary energy’ is mainly greenhouse gas emissions from the production of electricity and other direct combustion of fossil fuels in industries such as manufacturing and construction.
• ‘Transport’ comprises greenhouse gas emissions from air, road, rail and shipping transportation.
• ‘Fugitive emissions’ comprises the greenhouse gas emissions from the extraction and distribution of coal, oil and natural gas.

Agriculture

The ‘Agriculture’ sector comprises the emissions from livestock, crops, and agricultural and forest soils.

Industrial processes

The ‘Industrial processes and product use’ sector comprises the direct greenhouse gas emissions from:

• chemical and or physical transformation of materials
• consumption of synthetic greenhouse gases.

Waste

The ‘Waste’ sector comprises the greenhouse gas emissions from:

• disposal of solid waste to land
• treatment of domestic and industrial wastewater
• incineration of municipal and clinical waste
• biological treatment of solid waste.

Land use, land use change and forestry (LULUCF)

The LULUCF sector is made up of several sources, including:

• ‘Forest land’ includes all lands with a tree height of at least 2 metres and crown canopy cover of 20% or more and lands with systems with a woody biomass vegetation structure that currently fall below but which, in situ, could potentially reach the threshold values of the definition of forest land. Young natural stands and all plantations which have yet to reach a crown density of 20% or tree height of 2 metres are included under forest. So are areas normally forming part of the forest area which are temporarily unstocked as a result of either human intervention, such as harvesting, or natural causes, but which are expected to revert to forest. Forest land does not include woody horticulture which meets the forest threshold parameters; this land is classified as croplands. Australia has adopted a minimum forest area of 0.2 ha.

• ‘Cropland’ includes all land that is used for continuous cropping and those lands managed as crop-pasture (grassland) rotations. Non-CO₂ emissions from ‘cropland remaining cropland’ are reported in the ‘Agriculture’ sector.
• The ‘grassland’ category represents a diverse range of climate, management and vegetation cover. The ‘grassland’ category also includes sub-forest forms of woody vegetation (shrubs).

• ‘Settlements’ include areas of residential and industrial infrastructure, including cities and towns, and transport networks. The area of the ‘settlements’ land use classification is based on information sourced from the ABARES catchments scale land use data. It includes additional land use classes such as manufacturing and industry, commercial services, transport and communications including airports etc. Land areas that meet the definition of forest land are reported under the ‘forest land’ category.
• ‘Wetlands’ include areas of perennial lakes, reservoirs, swamps and major water course areas derived from the Australian Hydrological Geospatial Fabric (AHGF) data published by the Australian Bureau of Meteorology. It also includes all existing wetlands as defined in the Directory of Important Wetlands in Australia (DIWA) dataset published by our department. Land areas that meet the definition of ‘forest land’, such as mangroves, are reported under the ‘forest land’ category.
• The ‘other land’ category includes bare soil, rock and other land areas that do not fall into any of the other five categories according to ABARES’ catchment scale land use map of Australia (version 5).

The allocation of forest conversion areas to ‘cropland’ or ‘grassland’ is designated by the relative frequency of the management practices within the particular ABS Statistical Local Areas and soil type in which it occurred.

Where there has been direct human-induced conversion from grass to forest, these lands are classified and reported as ‘land converted to forest’. This includes observed regrowth on previously cleared lands. The generation of woody vegetation on ‘grassland’ from natural seed sources is classified as ‘land converted to forest land’ or ‘grassland remaining grassland’, depending on whether the vegetation meets the criteria for ‘forest land’.

In cases where there is a temporary change in forest cover, due to a forest harvest or fire, the land remains in the ‘forest land’ category unless a subsequent land use change is identified.

The permanent conversion of ‘forest land’ to other land uses is distinguished from a temporary removal or loss of forest cover. Changes in forest cover due to natural events (e.g. fire, drought) or changes that occur within land tenures where it is expected that the land will revert to forest (e.g. harvested forest, national park) are monitored for a period of time, depending upon the type of forest land use. In the absence of land use change, areas without forest cover that have entered the monitoring system continue to be classified as ‘forest’ provided that the time since forest cover loss is shorter than the number of years within which tree establishment is expected. After that time period, lands that have lost forest cover due to direct human-induced actions, have undergone land use change, and failed to regenerate are classified as converted to the appropriate non-forest land use classification.

Gases reported in these estimates

This report covers sources of greenhouse gas emissions and removals by sinks resulting from human (anthropogenic) activities for the major greenhouse gases:

• carbon dioxide (CO₂)
• methane (CH₄)
• nitrous oxide (N₂O)
• perfluorocarbons (PFCs)
• hydrofluorocarbons (HFCs)
• sulphur hexafluoride (SF₆).

In accordance with IPCC guidelines, Australia’s emissions of the greenhouse gas nitrogen trifluoride (NF₃) are considered negligible and are not estimated.

GWPs have been used for each of the major greenhouse gases to convert them to carbon dioxide equivalents (CO₂-e). As greenhouse gases vary in their radiative activity and in their atmospheric residence time, converting emissions into CO₂-e allows the integrated effect of emissions of the various gases to be compared.

From the National Inventory by Economic Sector 2020, estimates are developed applying the 100-year time horizon GWP values from the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5) to estimate emissions. This is consistent with rules adopted under the UNFCCC Paris Agreement (Decision 18/CMA.1 Annex 2.D Paragraph 37).

Reporting on external territories

The geographical coverage of the National Inventory by Economic Sector also includes emissions from:

• Norfolk Island
• Christmas Island
• Cocos (Keeling) Islands
• Heard and McDonald Islands
• Australia’s Antarctic Program operations in the Antarctic.

The following external territories are covered but are included in the respective state statistical territories by the Australian Bureau of Statistics:

• Coral Sea Islands (Queensland)
• Ashmore and Cartier Islands (Northern Territory).

Uncertainty analysis

Uncertainty is inherent within any kind of estimation. Uncertainty assessments at a sectoral level are reported in the National Inventory Report. Overall, at the national inventory level including LULUCF, the uncertainty of the emissions estimates level has been assessed at 5.3%. While no quantitative estimates have been produced, our department assesses that the uncertainties for emission estimates for these inventories, particularly the smaller states and territories, will be somewhat higher than for the national inventory.

Recalculations since last report

Emissions processes are pervasive and complex and, consequently, emissions estimation techniques and data sources for the Australian inventory continue to be refined, updated and improved. More generally, the development effort behind recalculations is undertaken in line with the Inventory Improvement Plan for the Australian inventory. This plan is aimed at reducing existing emission estimate uncertainties as much as possible, with development focused on key source categories, sources with high uncertainties and where implementation of new methods is feasible (for example, as a result of new data becoming available). The Australian improvement plan also responds to international expert reviews and changes in international practice.

Recalculations to the 2020 NIBES were made in response to a number of factors, including:

• The incorporation of ABS Supply-Use Table information to ensure a better time series of emissions which reach beyond the period applicable to a single Input-Output Table,
• The reallocation of slash burning in forests remaining forests to the Forestry industry rather than to changes in inventories. 
• Extended use of NGERS unit record data to allocate Scope 1 emissions from public electricity generation.
• Updates to the most recent annual release of the ABS Energy Accounts, Supply-Use Tables and Input-Output Tables

Other sources of recalculations relate to method improvements applied to the National Inventory Report 2020, on which the National Inventory by Economic Sector is based. See Chapter 10 of Volume 2 of the National Inventory Report 2020 (May 2022) for further information on method development.

The impact of the recalculations on emission levels for economic sectors was a decrease in the estimate of total emissions for the year 2019 of 12.9 Mt CO₂-e or 2.4%. Increases in ‘Mining’ and ‘Residential’, were more than offset by decreases in ‘Agriculture, Forestry, and Fishing’, ‘Manufacturing’, ‘Electricity, Gas, Water and Waste Services’, and ‘Services, Construction and Transport’.

Sector	2020 NIBES (Mt CO₂-e)	2019 NIBES (>Mt CO₂-e)	Recalculation (Mt CO₂-e)	% Recalculation
Total of all economic sectors	516.4	529.3	-12.9	-2.4%
Agriculture, Forestry and Fishing	87.7	93.2	-5.6	-6.0%
Agriculture, Forestry and Fishing – Changes in Inventories in Forest and Wood Product Stocks*	-44.2	-36.4	-7.8	21.5%
Mining	104.4	99.7	4.7	4.7%
Manufacturing	58.0	58.2	-0.2	-0.3%
Electricity, Gas, Water and Waste Services	184.7	186.6	-1.9	-1.0%
Services, Construction and Transport	60.0	62.4	-2.5	-3.9%
Residential	65.8	65.5	0.3	0.4%

Changes in inventories in forest and wood product stocks were first disaggregated from the Agriculture, Forestry and Fishing and Manufacturing industries in the 2018 NIbES. 

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Read about the reporting requirements and access international reports on the UNFCCC website

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