The objective of this report (1) is to help improve the understanding of past greenhouse gas (GHG) emission trends in the energy sector from the demand or end.user side. To do this, the report develops a methodology to redistribute emissions from energy industries to the final users (by sector) of that energy. This reallocation is done on the basis of Eurostat's energy balances and GHG inventories for the energy sector as reported to the United Nations Framework Convention on Climate Change (UNFCCC) for the period 2005.2010.
The European Union (EU), as a party to the UNFCCC, reports annually on GHG inventories for the year t.2 (i.e. two years after the reference year) and within the area covered by its Member States. The European Environment Agency (EEA) is responsible for the compilation of the EU's GHG inventory to the UNFCCC. Trends in GHG emissions have traditionally been explained based on the sectoral classification used in UNFCCC reporting. This internationally.agreed reporting system requires Annex I Parties to estimate and report (territorial) GHG emissions using UNFCCC Guidelines and Intergovernmental Panel on Climate Change (IPCC) methods. Data are reviewed annually and are the basis for assessing progress towards GHG emission targets.
GHG emissions for the energy sector consist of two main blocks: energy combustion and fugitive emissions (2). For reporting purposes, the main combustion categories are: energy industries, manufacturing and construction, residential, commercial and agriculture/fishing/forestry. This means that, for example, emissions from the transformation of primary fuels in thermal stations to deliver heat and electricity to the residential sector are reported under energy industries, whereas emissions from the burning of coal in a stove by a household would be reported as part of emissions from the residential sector. The official sectoral breakdown based on UNFCCC provides no information on emissions from energy industries by end user.
This report develops a methodology to reallocate emissions from the energy transformation sector to the final users of energy. These end users are allocated a share of emissions from energy industries. For the purpose of this report, emissions from the energy transformation industries (and fugitives) which are reallocated to end users are termed 'indirect emissions'. This is different from the meaning of 'indirect emissions' in relation to GHG inventories covering carbon dioxide (CO2) from the oxidation of methane (CH4), carbon monoxide (CO) and non‑methane volatile organic compounds (NMVOCs) in the atmosphere. Emissions resulting from combustion activities as reported to UNFCCC are termed 'direct emissions'.
In essence, the end‑user methodology splits direct and indirect GHG emissions by reallocating all GHG emissions from energy transformation industries to end users using final energy flows. End‑use emissions allow a better understanding of the underpinning trends from the demand side by linking final energy use and GHG emissions. This is useful from a different policy perspective as, for example, policies to improve the insulation of residential buildings could reduce both direct and indirect emissions. Moreover, the method also highlights the relative importance and emission effects of trade in energy flows between EU Member States.