Representation of the UK Emissions Trading Scheme in Scottish TIMES
December 2023
DOI: http://dx.doi.org/10.7488/era/3889
Executive summary
Aims and findings
Scotland is part of the UK Emissions Trading Scheme (UK ETS), the United Kingdom’s carbon emissions trading scheme. The scheme places an overall limit on emissions from large industrial sites and airlines, and facilitates the trading of emissions allowances within this limit.
The Scottish Government would like to understand how emissions from sites subject to the UK ETS are likely to evolve over the transition to net zero greenhouse gas emissions and the implications of steadily reducing the number of permits in the emissions trading scheme.
This study introduced a UK ETS accounting mechanism to the Scottish TIMES model, which is a diagnostic tool to help understand the key inter-relationships across the energy system. This will enable the Scottish Government to investigate these questions.
The Scottish TIMES model is being used by the Government to produce a new net zero pathway for Scotland to support its new Climate Change Plan.
Scottish TIMES does not distinguish between ETS and non-ETS emissions. By adding this capability, ETS emissions can be constrained separately to the overall Scottish emissions target.
The proportion of emissions subject to ETS was estimated for each sub-sector of Scottish TIMES and used to calculate ETS emissions in the model. A flexible mechanism was created to try to enable future changes to the UK ETS to be easily implemented. We created example scenarios with emission constraints and taxes for ETS emissions. A series of tests demonstrated that the model was working correctly.
Recommendations
Based on our research, we recommend that the Scottish Government consider:
- reviewing the ETS sites against the Scottish Greenhouse Gas Statistics to ensure that the data in both are accurate and consistent.
- cross-referencing the ETS site emissions and energy consumption, the Scottish Greenhouse Gas Statistics and the Scottish energy balance, to ensure that all sites in Scotland that are required to participate in the ETS are registered.
- ensuring the representation of gas networks in Scottish TIMES is consistent across the model and that the emission coefficients reflect all gas system losses.
- reviewing modelled emissions against actual emissions for the year 2020 to identify sectors of the economy where unrealistic decarbonisation pathways might have been created, and constrain those pathways appropriately.
Abbreviations
| AR4 | Assessment Report 4 from the IPCC |
| AR5 | Assessment Report 5 from the IPCC |
| CCP | Climate Change Plan |
| CHP | Combined heat and power |
| EU ETS | European Union Emissions Trading Scheme |
| GHG | Greenhouse gas |
| IEA | International Energy Agency |
| IPCC | Intergovernmental Panel on Climate Change |
| MW | Megawatts |
| OPRED | Offshore Petroleum Regulator for Environment and Decommissioning |
| PFC | Perfluorocarbons |
| SEPA | Scottish Environment Protection Agency |
| TIMES | An energy system model generator developed by the Energy Technology Systems Analysis Program (ETSAP), which is an International Energy Agency technology collaboration programme. |
| UK ETS | United Kingdom Emissions Trading Scheme |
| UNFCCC | United Nations Framework Convention on Climate Change |
Introduction
Scotland is part of the UK Emissions Trading Scheme (UK ETS). The Scottish Government wishes to: (i) understand how emissions from sites subject to ETS are likely to evolve over the transition to net zero; and, (ii) understand the implications of steadily reducing the number of permits in the emissions trading scheme on the transition.
The Scottish TIMES model is being used as part of a suite of analyses to inform a new net zero pathway for Scotland to support a new Climate Change Plan. The Scottish TIMES energy system model is built using the TIMES platform, which is developed by an International Energy Agency (IEA) technology collaboration programme and used in 63 countries. It contains a detailed and up-to-date depiction of all Scottish energy flows and greenhouse gas (GHG) emissions. It explores the potential future benefits of a wide range of low-carbon fuels and technologies.
Scottish TIMES currently does not distinguish between ETS and non-ETS emissions. Adding this capability to Scottish TIMES would enable ETS emissions to be constrained separately to the overall Scottish emissions target, or for different targets to be used for ETS and non-ETS emissions.
UK emissions accounting
The United Kingdom (UK) uses a range of approaches to emissions accounting for different applications:
- The United Nations Framework Convention on Climate Change (UNFCCC) accounting follows UNFCCC guidelines (e.g. moving from Assessment Report 4 (AR4) to Assessment Report 5 (AR5) global warming potentials by the end of 2024; counting F-gases separately).
- UK Climate Change Act 2008: restricts emissions of 6 GHGs/groups of GHGs.[1] The Scottish emissions budget includes all international aviation and shipping, and the UK Government has agreed to include international aviation and shipping from Carbon Budget 6 (2033–2037).
- The UK ETS applies to regulated activities that result in greenhouse gas emissions, including combustion of fuels on a site where combustion units with a total rated thermal input exceeding 20 megawatts (MW) are operated (except in installations where the primary purpose is the incineration of hazardous or municipal waste) (UK Government, 2023). Sites in Northern Ireland are excluded as these are part of the EU ETS instead. The UK ETS also includes domestic aviation and flights to Gibraltar and the European Economic Area. Other international aviation and all shipping are not included but could be in the future. Scottish participants can trade with the rest of the UK and might be able to trade with other non-UK ETSs in future.
- Some other schemes include non-UK emissions, for example for biomass sustainability.
We aimed to develop an emissions aggregation structure in Scottish TIMES in which all of these applications could be accounted for easily and transparently. We designed the approach to be relatively flexible to changes in these schemes (e.g. for shipping to be added to the ETS in the future).
Scottish UK ETS emissions
The UK ETS replaced the UK’s participation in the European Union Emissions Trading Scheme (EU ETS) on 1 January 2021. It covers emissions from two broad parts of the economy (UK Government, 2023a):
- Large industrial sites and power stations.
- Domestic aviation and flights to Gibraltar and the European Economic Area.
Each static site in the UK is treated individually. Regulation is devolved, with the Scottish Environment Protection Agency (SEPA) regulating Scottish sites. There are 72 sites in total in Scotland. Table 1 shows that most emissions are from a small number of power stations and large industrial plants.
All UK offshore oil and gas sites are regulated by the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) rather than SEPA. Many of these sites will be in Scottish waters. As Scottish TIMES does not cover offshore emissions, these were not included in this study. Offshore emissions are not part of Scottish territorial emissions and therefore are not included in Scotland’s Climate Change Plan either.
Aviation emissions are regulated in the country in which the operator is registered. Only one airline (Loganair) is registered in Scotland but many more aviation emissions involve Scotland.
Structure of this report
The methodology we used is discussed in Section 4. Section 5 analyses Scottish emissions covered by the ETS and derives ETS fractions for each Scottish TIMES sub-sector. Section 6 describes how we implemented ETS emissions accounting in Scottish TIMES. Section 6 discusses our quality assurance approach.
Method
The analytical approach we used is summarised in Figure 1.
The key challenges were estimating the fraction of emissions from each Scottish TIMES sub-sector that are covered by the UK ETS, or might be covered in future, and then to implement an accounting system for these emissions in Scottish TIMES.
The fraction of emissions covered by the UK ETS was estimated using two approaches. First, all ETS emission stationary sites and each overall emission category was assigned to a Scottish TIMES sub-sector (Sections 5.1 and 5.2). The total emissions in each sub-sector were then compared to estimate the fraction of emissions in the sub-sector covered by the UK ETS. A separate analysis was carried out for international aviation emissions, as only international flights to the EU are included in the UK ETS and only UK-wide statistics on flights were available from ETS statistics. Instead, an analysis of flights from Scottish airports was used to estimate the fraction of fuel use for EU destinations (Section 5.3).
A detailed accounting system for ETS and non-ETS emissions was implemented in the “ets_ucl” branch of Scottish TIMES by sub-sector (Section Error! Reference source not found.). A number of wider model changes were required to implement this accounting system. New example scenarios were created to separately limit ETS emissions from total emissions (Section Error! Reference source not found.) and to apply a carbon tax on ETS emissions (Section Error! Reference source not found.). The revised model was checked carefully to ensure that all emissions were covered (Section Error! Reference source not found.).
Table 1: Summary of Scottish sites subject to the UK ETS and their associated GHG emissions
| Description | Number of sites | GHG emissions (ktCO2e) | |
|---|---|---|---|
| 2021 | 2022 | ||
| Production of electricity | 16 | 1973 | 2181 |
| Manufacture of other organic basic chemicals | 2 | 1289 | 1304 |
| Manufacture of refined petroleum products | 2 | 910 | 1149 |
| Extraction of natural gas | 5 | 552 | 574 |
| Steam and air conditioning supply | 1 | 564 | 530 |
| Manufacture of cement | 1 | 459 | 444 |
| Extraction of crude petroleum | 2 | 350 | 322 |
| Distilling, rectifying and blending of spirits | 10 | 246 | 267 |
| Distribution of gaseous fuels through mains | 6 | 203 | 215 |
| Manufacture of hollow glass | 2 | 189 | 199 |
| Manufacture of basic pharmaceutical products | 2 | 136 | 130 |
| Manufacture of veneer sheets and wood-based panels | 3 | 96 | 77 |
| Aluminium production | 1 | 61 | 51 |
| Manufacture of other rubber products | 1 | 57 | 45 |
| Manufacture of paper and paperboard | 2 | 57 | 39 |
| Tertiary education | 2 | 33 | 32 |
| Manufacture of other food products | 1 | 30 | 27 |
| Treatment and disposal of non-hazardous waste | 1 | 20 | 22 |
| Defence activities | 2 | 24 | 21 |
| Manufacture of plastics in primary forms | 1 | 18 | 16 |
| Operation of dairies and cheese making | 1 | 11 | 10 |
| Manufacture of other non-metallic mineral products | 2 | 8 | 8 |
| Manufacture of basic iron and steel and of ferro-alloys | 2 | 10 | 7 |
| Manufacture of bricks, tiles and construction products, in baked clay | 1 | 6 | 6 |
| Quarrying of ornamental and building stone, limestone, gypsum, chalk and slate | 1 | 7 | 6 |
| Forging, pressing, stamping and roll-forming of metal; powder metallurgy | 1 | 9 | 4 |
| Engineering activities and related technical consultancy | 1 | 2 | 1 |
Figure 1. Analytical approach taken by this project
Analysis of emissions covered by the UK ETS
In Scottish TIMES, emissions accounting could be implemented at the level of sectors (e.g. industry; transport), sub-sectors or individual technologies. Sectors can be quite broad in nature so applying the scheme across a whole sector would be inappropriate as emissions could be cut in areas not subject to the ETS. As individual technologies require a level of detail for the real-world economy that is not available in the model (e.g. categorising all food and drink industries in what is a very diverse sector), this was not a practical option. We therefore estimated fractions by sub-sector and where possible chose our sub-sectors to reflect sites that were likely or not to be part of the ETS.
Table 2 shows the Scottish TIMES sub-sectors that were used to categorise ETS activities and Scottish Greenhouse Gas Statistics data. Sites with larger emissions such as refineries, upstream oil and gas and chemical plants are in sub-sectors where most emissions are subject to the ETS.
Table 2: Scottish TIMES sectors, sub-sectors, and descriptions
| Sector | Description | Sub-sector | Description |
|---|---|---|---|
| AGR | Agriculture | Crops & livestock | Crops & livestock |
| Energy | Energy | ||
| Land use | Land use and forestry | ||
| All | Gas distribution | Gas distribution networks | |
| ELC | Electricity generation and power grids | EfW | Energy from waste plants |
| Other | All other generation | ||
| IND | Industry | ICH | Chemicals |
| ICM | Cement | ||
| IFD | Food, drink, and tobacco | ||
| IIS | Iron & steel | ||
| INF | Non-ferrous metals | ||
| INM | Non-metallic minerals | ||
| IPP | Paper | ||
| IOFFD | Off-road mobile machinery | ||
| IOI | Other industry | ||
| PRC | Processing and infrastructure | Bioenergy | All bioenergy processes |
| Uranium | Nuclear fuel production | ||
| Refineries | Oil refinery | ||
| Waste | Waste processes | ||
| Other fossil | e.g. coke manufacturing | ||
| RES | Residential | RH | All heating |
| Other | Other | ||
| RSR | Resources and trade | Mining | UK resource extraction |
| Upstream oil and gas | Upstream processing | ||
| SER | Services | SH | High-consumption heating |
| Other | Other | ||
| TRA | Transport | TAD | Domestic aviation |
| TAI | International aviation | ||
| TB | Buses | ||
| TC | Cars | ||
| TH | Heavy goods vehicles | ||
| TL | Light goods vehicles | ||
| TR, TF | Rail passengers and freight | ||
| TSD | Domestic shipping | ||
| TSI | International shipping | ||
| TW | Two-wheel vehicles | ||
| Other | Other |
Scottish Emissions Inventory
Scotland publishes Scottish Greenhouse Gas Statistics annually (hereafter “Emissions Inventory”). For each entry in the Emissions Inventory (Scottish Government, 2023), we added two fields representing the most appropriate Scottish TIMES sector and sub-sector from Table 2. Sectors and sub-sectors were allocated according to the following fields in the Emissions Inventory: Climate Change Plan (CCP) category, Intergovernmental Panel on Climate Change (IPCC) codes and source name.
Some emissions are not explicitly represented in Scottish TIMES and were categorised as “None”. The sources of these emissions are listed in Table 4 summarises the allocation of Scottish GHG emissions in 2021 to each of the Scottish TIMES sub-sectors. One of the challenges is that the IPCC codes used in the inventory do not map easily onto technologies in the energy system. In some cases, a technology produces emissions that map onto more than one IPCC code. For example, industrial plants with process emissions map to both combustion and process emissions codes. Another challenge is that some IPCC codes aggregate emissions from a diverse set of plants, particularly “Other industrial combustion” (IPCC code 1A2gviii) and “Miscellaneous industrial/commercial combustion” (1A4ai), which together accounted for almost 7% of Scottish emissions in 2021. These codes were both allocated to the “industrial other (IOI)” sub-sector.
It is likely that emissions from some of the other industrial sectors, and possibly also the service sector, are included in these two codes and hence allocated to the IOI sub-sector.
Scottish ETS emissions for stationary sites
The UK ETS publishes a compliance report containing emissions for each site and each airline. We used the 2023 publication (UK Government, 2023b).
We assigned each of the 72 sites in Scotland subject to the ETS individually to a Scottish TIMES sub-sector. One challenge was that the NACE description did not always accurately describe the plant operation. For example, the Sullom Voe Terminal description is extraction of natural gas, but it is primarily an oil terminal. The Shell UK Limited Fife NGL Plant description is manufacture of refined petroleum products, but plant best fits into the chemical industry rather than the oil refining sector.
Matching Scottish ETS emissions to Inventory emissions
We checked this designation and also assigned IPCC codes that were consistent with the Emissions Inventory where possible. This is challenging for oil and gas upstream and downstream sectors in particular as these are broad and complex in Scotland, so a good understanding of the sector is required to properly assign the plants to the Inventory. For example, Grangemouth combined heat and power (CHP) plant is counted under chemicals in the Inventory, while Grangemouth Infrastructure is counted under refineries, despite both being CHP plants at the same site.
One approach we used was to compare site emissions against the NAEI “Large Point Sources” emissions dataset for the year 2021 (UK Government, 2023c). However, there were notable errors and omissions in the version of the data source we consulted, with several sites having CO2 emissions missing and many sites having incorrect location data (e.g. Scottish sites categorised in other UK countries, and vice versa), so not all sites could be identified in the Inventory.
Table 3. In total, they comprised only 0.5% of Scottish emissions in 2021.
Table 4 summarises the allocation of Scottish GHG emissions in 2021 to each of the Scottish TIMES sub-sectors. One of the challenges is that the IPCC codes used in the inventory do not map easily onto technologies in the energy system. In some cases, a technology produces emissions that map onto more than one IPCC code. For example, industrial plants with process emissions map to both combustion and process emissions codes. Another challenge is that some IPCC codes aggregate emissions from a diverse set of plants, particularly “Other industrial combustion” (IPCC code 1A2gviii) and “Miscellaneous industrial/commercial combustion” (1A4ai), which together accounted for almost 7% of Scottish emissions in 2021. These codes were both allocated to the “industrial other (IOI)” sub-sector.
It is likely that emissions from some of the other industrial sectors, and possibly also the service sector, are included in these two codes and hence allocated to the IOI sub-sector.
Scottish ETS emissions for stationary sites
The UK ETS publishes a compliance report containing emissions for each site and each airline. We used the 2023 publication (UK Government, 2023b).
We assigned each of the 72 sites in Scotland subject to the ETS individually to a Scottish TIMES sub-sector. One challenge was that the NACE[2] description did not always accurately describe the plant operation. For example, the Sullom Voe Terminal description is extraction of natural gas, but it is primarily an oil terminal. The Shell UK Limited Fife NGL Plant description is manufacture of refined petroleum products, but plant best fits into the chemical industry rather than the oil refining sector.
Matching Scottish ETS emissions to Inventory emissions
We checked this designation and also assigned IPCC codes that were consistent with the Emissions Inventory where possible. This is challenging for oil and gas upstream and downstream sectors in particular as these are broad and complex in Scotland, so a good understanding of the sector is required to properly assign the plants to the Inventory. For example, Grangemouth combined heat and power (CHP) plant is counted under chemicals in the Inventory, while Grangemouth Infrastructure is counted under refineries, despite both being CHP plants at the same site.
One approach we used was to compare site emissions against the NAEI “Large Point Sources” emissions dataset for the year 2021 (UK Government, 2023c). However, there were notable errors and omissions in the version of the data source we consulted, with several sites having CO2 emissions missing and many sites having incorrect location data (e.g. Scottish sites categorised in other UK countries, and vice versa), so not all sites could be identified in the Inventory.
Table 3: Emission sources in the Scottish Inventory not represented in Scottish TIMES
| Source | Source (continued) |
| Abandoned oil wells (offshore) | Oil Terminal: Venting |
| Abandoned oil wells (onshore) | Oil transport fugitives: pipelines (onshore) |
| Accidental fires – dwellings | Oil transport fugitives: pipelines (to shore) |
| Accidental fires – other buildings | Oil transport fugitives: road tankers |
| Accidental fires – vehicles | Onshore natural gas gathering |
| Agricultural engines | Onshore natural gas production (conventional) |
| Anaerobic Digestion (other) | Onshore oil production (conventional) |
| Closed Coal Mines | Onshore oil production: gas flaring |
| Coal storage and transport | Onshore oil well exploration (conventional) |
| Composting (at household) | Open-cast coal |
| Deep-mined coal | Petroleum processes |
| Domestic Closed Stove – Basic | Recreational use of N2O |
| Domestic Closed Stove – EcoDesign | Road vehicle engines |
| Domestic Closed Stove – Upgraded | Sewage sludge decomposition |
| Domestic Fireplace – Standard | Sewage sludge decomposition in private systems |
| Domestic Outdoor | Small-scale waste burning |
| Gas Terminal: Gas Flaring | Total composting (non-household) |
| Gas Terminal: Other Fugitives | Upstream Gas Production – flaring |
| Gas Terminal: Venting | Upstream Gas Production – fugitive emissions |
| Incineration | Upstream Gas Production – Offshore Well Testing |
| Incineration – chemical waste | Upstream Gas Production – venting |
| Incineration – clinical waste | Upstream Gas Production: direct process emissions |
| Incineration – sewage sludge | Upstream Oil Production – flaring |
| Industrial engines | Upstream Oil Production – fugitive emissions |
| Industrial Waste Water Treatment | Upstream Oil Production – Offshore Oil Loading |
| Marine engines | Upstream Oil Production – Offshore Well Testing |
| Mechanical Biological Treatment – Anaerobic Digestion | Upstream Oil Production – Onshore Oil Loading |
| Mechanical Biological Treatment – Composting | Upstream Oil Production – venting |
| N2O use as an anaesthetic | Upstream Oil Production: direct process emissions |
| Oil Terminal: Gas Flaring | Well exploration (unconventional gas): all sources |
| Oil Terminal: Other Fugitives |
Table 4. Allocated Scottish GHG emissions in each Scottish TIMES sub-sector in the year 2021. Units: MtCO2e
| Sector | Sub-sector | GHG | Sector | Sub-sector | GHG | |
| AGR | Crops & livestock | 6.9 | RES | Other | 0.2 | |
| AGR | Energy | 0.9 | RES | RH | 5.8 | |
| AGR | Land use | 0.4 | RSR | Mining | 0.0 | |
| All | Gas distribution | 0.2 | RSR | Upstream oil and gas | 1.6 | |
| ELC | EfW | 0.3 | SER | Other | 0.4 | |
| ELC | Other | 1.3 | SER | SH | 1.1 | |
| IND | ICH | 2.3 | TRA | Other | 0.2 | |
| IND | ICM | 0.5 | TRA | TAD | 0.2 | |
| IND | IFD | 0.6 | TRA | TAI | 0.4 | |
| IND | IIS | 0.0 | TRA | TB | 0.3 | |
| IND | INF | 0.1 | TRA | TC | 4.7 | |
| IND | INM | 0.1 | TRA | TH | 1.9 | |
| IND | IOFFD | 0.5 | TRA | TL | 1.8 | |
| IND | IOI | 3.5 | TRA | TR, TF | 0.1 | |
| IND | IPP | 0.1 | TRA | TSD | 1.7 | |
| PRC | Bioenergy | 0.0 | TRA | TSI | 0.3 | |
| PRC | Other fossil | 0.1 | TRA | TW | 0.0 | |
| PRC | Uranium | 0.0 | None | 0.2 | ||
| PRC | Refineries | 1.3 | Total | 41.6 | ||
| PRC | Waste | 1.5 |
We encountered similar challenges as those for the Emissions Inventory described in Section 5.1. For example, glass manufacturers have process emissions (2A3: “glass production”) but most of their emissions are from combustion and are aggregated with many other industries in “Other industrial combustion” (1A2gviii). Some of these sites did not have CO2 emissions recorded in the NAEI “Large Point Sources” emissions dataset (UK Government, 2023c), perhaps because they are split across IPCC codes. We could not find some other Scottish industrial plants included in the ETS in the NAEI “Large Point Sources” emissions dataset at all.
Recommendation: review the ETS site emissions against the NAEI “Large Point Sources” emissions dataset to ensure that the data in both are accurate and consistent, and investigate causes of any discrepancies.
Only three of eighteen plants[3] generating electricity using waste as a feedstock in Scotland are included in the ETS. Installations where the primary purpose is the incineration of hazardous or municipal waste are currently excluded from the ETS.
ETS fractions by sub-sector for Scottish TIMES
We added GHG emissions by sub-sector and calculated the fraction of ETS emissions over the total emissions reported in the inventory. For this, we only considered the GHG emissions that are reported in the current ETS – CO2 and F-gases for aluminium production.[4]
Table 5 shows the fractions for each of the Scottish TIMES sectors/subsectors. In two sub-sectors, ETS emissions exceeded total emissions. For INM (non-metallic minerals), this resulted from combustion emissions from glass production being recorded in “Other industrial combustion”, as discussed above. The discrepancy for waste was for a single plant with negligible emissions.
The ETS fractions used in Scottish TIMES were mostly the same or similar to the fractions calculated from emissions statistics. No fractions exceeded 1 (i.e. total emissions). We reallocated IOI (industrial other) total emissions to other industrial sectors where the emission statistics fraction exceeded 1 as we assumed that the discrepancy was caused by emissions being erroneously recorded in IOI. The lower total emissions caused the IOI fraction to increase slightly. We assumed that all fossil fuel resource extraction is subject to the ETS. Offshore extraction is counted in a special category outside of Scotland in the ETS and is not included in Scottish TIMES.
It was necessary to choose ETS fractions for low-carbon technologies that have not been constructed in Scotland but might be in the future. We assumed:
- All plants with carbon capture and storage (CCS) will be subject to the ETS as we expect them to be large to benefit from economies of scale to capture and sequester CO2.
- All large hydrogen production plants will be subject to the ETS. Small electrolysers at refuelling stations were excluded.
- All negative emission technologies, including biomass with CCS and direct air capture, are counted using a separate negative emissions category. These could be included in the ETS in future.
Table 5: Fraction of Scottish ETS sites over total reported emissions by Scottish TIMES sector/sub-sector. All emission data have units MtCO2e. * See Section 5.4 for the calculation of the international aviation fraction
| Scottish TIMES code | ETS sites | Included in UK ETS? | Total Scottish emissions 2021 | ETS/Total Emissions | |||||
|---|---|---|---|---|---|---|---|---|---|
| Sector | Sub-sector | Number | Emissions | CO2 | PFC | CO2 | PFC | Stats | Model |
| AGR | Crops & livestock | 0 | Yes | 0.3 | 0 | 0.00 | |||
| AGR | Energy | 0 | Yes | 0.9 | 0 | 0.00 | |||
| AGR | Land use | 0 | Yes | -4.0 | 0 | 0.00 | |||
| All | Gas distribution | 0 | Yes | 0.0 | 0 | 0.00 | |||
| ELC | EfW | 3 | 0.0 | Yes | 0.3 | 0.06 | 0.06 | ||
| ELC | Other | 11 | 1.3 | Yes | 1.3 | 0.99 | 1.00 | ||
| IND | ICH | 6 | 2.1 | Yes | 2.3 | 0.90 | 0.90 | ||
| IND | ICM | 1 | 0.5 | Yes | 0.5 | 1.00 | 1.00 | ||
| IND | IFD | 12 | 0.3 | Yes | 0.5 | 0.52 | 0.52 | ||
| IND | IIS | 3 | 0.0 | Yes | 0.0 | 0.85 | 0.85 | ||
| IND | INF | 1 | 0.1 | Yes | Yes | 0.1 | 0.004 | 0.83 | 0.83 |
| IND | INM | 6 | 0.2 | Yes | 0.1 | 4.07 | 1.00 | ||
| IND | IPP | 2 | 0.1 | Yes | 0.1 | 0.74 | 0.74 | ||
| IND | IOFFD | 0 | Yes | 0.5 | 0 | 0.00 | |||
| IND | IOI | 6 | 0.2 | Yes | 3.2 | 0.05 | 0.06 | ||
| PRC | Refineries | 2 | 1.3 | Yes | 1.3 | 1.00 | 1.00 | ||
| PRC | Waste | 1 | 0.0 | Yes | 0.0 | 3.51 | 0.00 | ||
| PRC | Other | 0 | Yes | 0.0 | 1.00 | ||||
| PRC | DAC | 0 | Yes | 0.0 | 1.00 | ||||
| RES | Other | 0 | Yes | 0.2 | 0 | 0.00 | |||
| RES | RH | 0 | Yes | 5.8 | 0 | 0.00 | |||
| RSR | Fossil supply | 0 | Yes | 0.0 | 0 | 1.00 | |||
| RSR | Upstream oil and gas | 14 | 1.3 | Yes | 1.5 | 0.84 | 0.84 | ||
| SER | Other | 0 | Yes | 0.0 | 0 | 0.00 | |||
| SER | SH | 4 | 0.1 | Yes | 0.9 | 0.06 | 0.06 | ||
| TRA | TAD | 0 | Yes | 0.2 | 0 | 1.00 | |||
| TRA | TAI | 0 | Yes | 0.4 | 0 | 0.68* | |||
| TRA | TB | 0 | Yes | 0.3 | 0 | 0.00 | |||
| TRA | TC | 0 | Yes | 4.7 | 0 | 0.00 | |||
| TRA | Other | 0 | Yes | 0.2 | 0 | 0.00 | |||
| TRA | TH | 0 | Yes | 1.8 | 0 | 0.00 | |||
| TRA | TL | 0 | Yes | 1.8 | 0 | 0.00 | |||
| TRA | TR, TF | 0 | Yes | 0.1 | 0 | 0.00 | |||
| TRA | TSD | 0 | Yes | 1.7 | 0 | 0.00 | |||
| TRA | TSI | 0 | Yes | 0.3 | 0 | 0.00 | |||
| TRA | TW | 0 | Yes | 0.0 | 0 | 0.00 | |||
| Total | 72 | 7.3 | 41.3 | 0.004 | 0.18 | 0.18 | |||
Scottish ETS aviation emissions
Aviation ETS emissions are regulated in the UK country in which the operator is registered. Only one operator is registered in Scotland – Loganair – but many operators registered elsewhere operate in Scotland.
All domestic flights are included in the ETS. International flights to EU destinations are also included but flights to other destinations are currently excluded. It was therefore necessary to estimate the proportion of international flight emissions to EU destinations.
Bunker fuel consumption is an appropriate proxy for emissions, but no data are available on fuel use to EU and non-EU destinations. Instead, we used airport passenger statistics from the Civil Aviation Authority (CAA), Table 12.1, which contains the number of passengers flying from each UK airport to each overseas airport (CAA, 2023). One flight from a Scottish airport had destination “Unknown”. It was removed from the statistics as the small number of passengers would have negligible impact on the analysis.
Since non-EU destinations are generally more distant than EU destinations, we used the number of passengers multiplied by the distance to each overseas airport as a proxy for fuel use. This approach implicitly assumed that aeroplanes to EU and non-EU destinations have similar fuel use efficiencies. We calculated each flight distance from the coordinates of the Scottish and overseas airports using the Haversine formula (assuming the Earth is a perfect sphere) with airport location data from openflights.[5]
We carried out the analysis for the years 2015-2022. Figure 2 shows the fraction of passengers and the fraction of passengers multiplied by distance (proxy fuel use) travelling from Scotland to EU destinations. Prior to the COVID-19 pandemic, around 68% of proxy fuel use was for EU destinations, with a small upward trend over time. In 2021, when there were many international travel restrictions, EU fuel use increased to more than 80% of the total, but this reduced towards the long-term average in 2022. We therefore assumed a fraction of 68% in Scottish TIMES in line with the average excluding the year 2022.
Figure 2. Fraction of international passengers and fraction of (international passengers x distance) to EU destinations from Scotland. Only EU flights are included in the UK ETS. The graph shows the proportion of passengers flying to the EU each year from 2015–2022, and also the distance-weighted proportion as this is likely a better proxy for fuel consumption and hence emissions.
Scottish TIMES UK ETS implementation
We implemented a new ETS emission accounting scheme in Scottish TIMES. This was designed to count all emissions, including those subject and not subject to the ETS, as a quality assurance step to ensure that all emissions were counted appropriately.
We added nine new emission counters categories to Scottish TIMES to account for the ETS and non-ETS emissions. These are described in Table 6. Five categories cover aviation and shipping, with domestic and international travel counted separately and EU and non-EU aviation counted separately. Emissions from stationary sites covered by the ETS or likely to be covered in the future are in SITE-ETS, while those not covered by the ETS are in NON-ETS. SITE-NEG-EMIS is used for future technology-based negative emissions (i.e. excluding nature-based solutions). Finally, LULUCF counts land-use and forestry emissions, including nature-based negative emissions.
For each of these categories, we defined separate emissions counters for CO2, CH4 and N2O. For example, for AIR-UK, we defined AIR-UK-CO2, AIR-UK-CH4 and AIR-UK-N2O. For SITE-ETS and NON-ETS, we additionally defined counters for HFCs. Defining separate counters enables future changes to the UK ETS in which GHGs other than CO2 are added to the scheme to be easily represented in Scottish TIMES.
We created two new model scenarios:
- “GHG_Targets_ETS_non-ETS” demonstrates how emissions subject to the ETS could be limited separately from other emissions. The inclusion and role of negative emissions should be considered carefully when setting fixed or upper limits on ETS emissions and choosing the level of those emissions each year.
- “GHG_ETS_tax” demonstrates how a tax could be applied to emissions subject to the ETS. This would be the equivalent of a minimum traded carbon price for the market.
The revised model produces no errors. Our testing concluded that all ETS and non-ETS emissions are accounted for correctly.
Table 6. ETS emission counters added to Scottish TIMES
| Name | Description |
|---|---|
| SHIP-UK | Domestic shipping (always outside the UK ETS) |
| SHIP-INT | International shipping (always outside the UK ETS) |
| AIR-INT-NON-EU | International aviation outside the UK and EU |
| AIR-INT-EU | International aviation in the EU that is currently included in the ETS |
| AIR-UK | Domestic aviation |
| SITE-ETS | Emissions from a site subject to the ETS |
| NON-ETS | Emissions not subject to the ETS |
| SITE-NEG-EMIS | A plant producing negative emissions (BECCS or DACCS); excludes plants in industry using biomass and any plants co-firing or using waste as a feedstock |
| LULUCF | Land use, land use change and forestry emissions |
Quality assurance
Emissions attribution to Scottish TIMES sub-sectors for the ETS and the Scottish Inventory was carried out by Francisca Jalil-Vega and reviewed by Paul Dodds. Issues were discussed with experts from the Scottish Government.
Our testing of the revised Scottish TIMES model identified no implementation issues.
The international aviation analysis and all model analysis spreadsheets were created by Paul Dodds and checked by Francisca Jalil-Vega.
Conclusions and recommendations
The Scottish Government wants to understand how emissions from sites subject to the UK ETS are likely to evolve over the transition to net zero. We added ETS accounting to the Scottish TIMES model and created example scenarios with emission constraints and taxes for ETS emissions. Scottish TIMES is being used to produce a new net zero pathway for Scotland to support its new Climate Change Plan, but did not previously distinguish between ETS and non-ETS emissions.
ETS emissions accounting required an estimate of the proportion of emissions subject to ETS for each sector and sub-sector of the model. We analysed ETS and overall emission data for the year 2021 to assess these proportions. We also estimated the proportion of international aviation fuel used for flights to EU destinations as these are included in the UK ETS while destinations outside the EU are not.
We noted some unusual trends in the statistics and so we recommend that the Scottish Government:
- reviews ETS sites against the Emissions Inventory to ensure that the data in both are accurate and consistent
- cross-references the ETS site emissions and energy consumption, the Scottish emissions inventory and the Scottish energy balance to ensure that all sites in Scotland that are required to participate in the ETS are registered.
We implemented a branched version of the Scottish TIMES model at a sub-sector resolution using a flexible mechanism to try to enable future changes to the UK ETS to be easily implemented. A number of model changes were required to enable ETS accounting to function correctly, particularly to the representation of gas networks, which would benefit from a review to ensure they are modelled consistently across Scottish TIMES and that the assumptions used are reflected in the gas emission intensities.
Our comparison of the outputs identified some unexpected discrepancies between modelled emissions in 2020 and actual emissions in 2021, so we recommend that these are compared to identify sectors of the economy where unrealistic decarbonisation pathways might have been projected, and to constrain those pathways appropriately.
References
CAA (2023) UK airport data. Civil Aviation Authority. https://www.caa.co.uk/data-and-analysis/uk-aviation-market/airports/uk-airport-data/. Accessed 23 August 2023.
Dodds, P. E. (2021) Review of the Scottish TIMES energy system model. http://dx.doi.org/10.7488/era/793
Scottish Government (2023) Scottish Greenhouse Gas Statistics 2021. https://www.gov.scot/publications/scottish-greenhouse-gas-statistics-2021. Accessed 13 August 2023.
UK Government (2023a) Guidance: Participating in the UK ETS. https://www.gov.uk/government/publications/participating-in-the-uk-ets/participating-in-the-uk-ets. Accessed 20 July 2023.
UK Government (2023b) UK ETS Recorded Emissions and Surrendered Allowances Data. https://reports.view-emissions-trading-registry.service.gov.uk/ets-reports/section5/20230601_Compliance_Report_Emissions_and_Surrenders.xlsx. Accessed 13 August 2023.
UK Government (2023c) Emissions from NAEI large point sources. https://naei.beis.gov.uk/data/map-large-source. Accessed 20 July 2023.
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- The Climate Change Act 2008 covers CO2, CH4, N2O, HFCs, PFCs, SF6 and NF3. NF3 was added in 2023. The base year for CO2, CH4 and N2O is 1990, and for the other gases it is 1995. ↑
- NACE is “Nomenclature of Economic Activities”, the European statistical classification of economic activities. ↑
- List of Scottish Energy from Waste plants from SEPA: https://www.sepa.org.uk/regulations/waste/energy-from-waste/energy-from-waste-sites/ ↑
- https://www.legislation.gov.uk/eudr/2003/87/annex/I ↑
- https://openflights.org/data.html ↑