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2 The aim of the EAA is to integrate data from different sources into a consolidated information set, making it possible to link physical data on energy to economic data in Australian System of National Accounts (SNA) (cat. no. 5204.0).
3 Environmental-economic accounts provide information and an improved understanding on a range of issues including:
THE ENVIRONMENTAL ACCOUNTING FRAMEWORK
4 The EAA is based on the SEEA Central Framework. The SEEA Central Framework is a conceptual framework designed to support an understanding and the measurement of the interactions between the economy and the environment, and the stocks and changes in stocks of environmental assets. The SEEA Central Framework was adopted by the United Nations (UN) Statistical Commission as an international statistical standard in 2012.
5 The SEEA Central Framework uses a systems approach to organise environmental and economic information, covering, as completely as possible, the stocks and flows that are relevant to the analysis of environmental and economic issues. In using this approach, the SEEA Central Framework applies the accounting concepts, structures, rules and principles of the SNA. Environmental-economic accounts ('environmental accounts') deliver important extensions to SNA accounts. In practice, these accounts may include physical supply and use tables, functional accounts (such as environmental expenditure accounts), and asset accounts for natural resources.
THE RELATIONSHIP BETWEEN THE EAA AND THE SNA
6 The EAA provides a framework for linking physical information to core components of the SNA. The production of physical supply and use tables, monetary supply and use tables, energy asset tables, as well as hybrid tables, are (to the extent that it is conceptually possible) consistent with the approaches used in the construction of the SNA. This allows for consistent analysis of the contribution of energy to the economy, the impact of the economy on non-renewable energy reserves, and the efficiency of the use of energy resources within the economy.
THE SUPPLY AND USE OF ENERGY
7 The supply table records the total supply of energy within the economy, including imports. The use table records the total use of energy within the economy and for export. The supply and use tables can be compiled in both physical and monetary terms.
8 The supply and use methodology is based on the fundamental economic identity that supply of products equals use of products.
9 Data on the physical supply and use of energy products are primarily derived from the Department of the Environment and Energy publication, Australian Energy Statistics - Energy Update 2018 (AES). The ABS translates this data into the SEEA framework, thereby enabling linkages between energy supply, energy use and the SNA.
10 To estimate monetary values associated with the supply and use of energy, the ABS used implicit unit prices and expenditure data drawn from a number of sources, including ABS surveys.
Gross energy flow accounts (including hybrid tables)
11 Gross energy flow accounts record total energy extracted from nature and energy processed from that energy. For example, a gross energy account includes electricity, in addition to fuels (e.g. coal) combusted to generate that electricity. The total gross energy use by industry is, therefore, not equal to total 'net' energy consumption, which is energy consumed for 'final purposes'. In this electricity generation example, only the electricity is considered as 'net' use by the industry, as it can no longer be used for any other energy purpose. The fuels used to generate electricity are treated separately as conversions and losses.
12 In any aggregation of physical gross data by industry, totals will exceed net totals as both primary and secondary energy flows are included in gross totals.
13 Gross energy flows are presented in the gross tables and hybrid tables. The hybrid tables combine valuations of various energy products with the associated physical use. The hybrid tables are consistent with national accounting principles and with relevant monetary measures from the SNA.
Net energy flow accounts
14 Net energy flow accounts record only energy 'entering' the economy (imports and extraction) and energy 'leaving' the economy (exports, energy used for final purposes and energy losses in conversion processes).
15 The supply table of the net energy flow accounts shows the different energy products extracted within Australia and supplied from the rest of the world (imports). Note that, in line with the SNA guidelines, direct extraction by households is treated as supply by the relevant industry, but is also identified separately.
16 The use table shows the different energy products consumed for final purposes (final use of energy plus energy losses due to conversions) and supplied to the rest of the world (exports), along with inventory changes. The main accounting identity underlying the net flow accounts for energy is:
17 This accounting identity is only valid for the sum of all energy products in the economy and not for individual energy products. This is because the net supply table balances all energy use, whereas supply of an individual product will generally not equal use of that product due to conversions and losses.
18 Data contained in the net supply and use tables of this publication are used to compile the energy intensity time series estimates, and the household energy indicators.
Monetary valuations and non-market use
19 Significant use of many energy products occurs without an explicit monetary transaction. This includes, for example, the use of own energy production and energy losses which are recorded as physical use by an energy-producing industry. In keeping with SEEA and SNA principles the monetary valuations presented in the monetary tables and hybrid tables represent all energy use, including non-purchased energy, rather than showing only explicit expenditure on energy. Nevertheless, some relatively minor energy products have been excluded from the hybrid tables due to lack of data on unit prices.
20 Coverage for physical supply and use tables includes the following energy products:
21 With the exception of the net presentation, the physical supply and use of liquefied natural gas (LNG) is also separately identified.
22 Industry classifications used in this publication follow the 2006 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0).
23 Several industries are further broken down on an energy use significance basis into the following groupings, with the relevant ANZSIC codes listed in brackets:
26 Electricity, gas, water supply and waste services:
28 Commercial and Services:
29 The estimates contained in this publication are drawn from a wide range of ABS and non-ABS data sources, including:
30 ABS sources:
31 Non-ABS sources:
Methods for calculating physical energy supply and use
32 These notes are intended as a general guide to the method of calculating estimates of physical energy supply and use.
33 Data on the physical supply and use of energy products are primarily derived from the AES.
34 While the EAA draws on data from the AES, data from the EWES and EIS are used to allocate the supply and use of energy products among industries. The following changes, which provide linkages between energy supply, energy use and the SNA, are worth highlighting:
Reallocation of petrol, diesel and LPG use by industry and households
35 In the AES, the physical use of land transport fuels (petrol, diesel and LPG) is assigned on the basis of activity type rather than 'industry of ownership'. For example, fuel used by a truck owned by a mining company and operating between mining sites would likely be treated as transport activity in AES, but an industry-based view would assign this use to the Mining industry. In practice, application of the fuel use re-allocation methodology impacts significantly on derived estimates of fuel use.
36 The allocation based on EWES and EIS data impacts significantly on AES fuel use figures. For example, the proportion of refined fuel use attributed to households ('residential') in AES is negligible. However, when usage is recorded on the basis of ownership, households are the largest single user of certain refined fuels. The implications are also significant for industry-based measures of energy intensity.
Treatment of chemical feedstocks
37 Chemical industry feedstocks are not separately identified in the AES and are included in 'petroleum products not elsewhere classified'. For the purpose of closer concordance with the SNA, these have been identified and reallocated to the energy product category Crude oil and feedstocks.
Treatment of biofuels
38 Biofuels identified in EAA include biodiesel, ethanol and biogas (landfill and sludge). In addition, AES assigns bio-diesel and ethanol as consumed by activities such as transport, while EAA shows these fuels as consumed (i.e. blended) in the production of petrol and diesel. Consumption of these blended fuels is then contained within general final use of petrol and diesel.
Treatment of household production of energy
39 The EAA follows SEEA and SNA principles for recording and including so-called 'backyard' production by households in estimates. As an example, in the case of agriculture the application of this principle results in the imputed value of household fruit and vegetable production and meat produced from livestock raised for household use being included in the value of goods produced by the Agriculture, forestry and fishing industry.
40 An analogous approach is used to assign energy production within the SEEA framework: 'following the general principles from the national accounts, if households extract or produce energy, the energy extraction or production should be recorded as part of the product output of the industry that would otherwise have produced the energy. At the same time a corresponding private consumption of energy products should be recorded for the households'. (Draft SEEA-Energy chapter 5).
41 Following these principles, in the EAA, household production of energy is assigned to the relevant industry to which the activity would normally be classified, but also identified separately within the supply and use tables to maintain information detail.
42 Specifically, within the EAA, wood extraction by households is considered part of the Agriculture, forestry and fishing industry. Similarly, solar energy extracted within households for the production of electricity is assigned to the Electricity supply industry, and solar energy extracted for hot water production is assigned to the Water supply and waste services industry. This is following the concordance identified between ANZSIC 2811 Water Supply and International Standard Industrial Classification of All Economic Activities (ISIC) 4030 Steam and hot water supply. More detail on ANZSIC-ISIC concordance can be found in Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0).
Treatment of bitumen, solvents, lubricants and greases
43 Bitumen, solvents, lubricants and greases are classified in the AES as derived energy within petroleum refining. These products, while containing energy, are not consumed for energy purposes. Their production is classified as final use by the Petroleum and chemical products manufacturing industry.
Netting of secondary fuels
44 Secondary fuels (which are then re-consumed) are netted out when producing net flow accounts.
45 The following sources were used to assist in the process of netting out secondary fuels:
Adjustment to imports, exports and production to align with the SNA 'residency' view of the boundaries of the Australian economy
46 Adjustments have been made to the EAA to align with the residency view for activity in the Timor Gap as described in the feature article Statistical Treatment of Economic Activity in the Timor Sea (Feature article, Australian National Accounts: National Income, Expenditure and Product, Sep 2003 (cat. no. 5206.0)). A territory view would exclude this activity entirely from the Australian economy but the residency treatment results in 50% of all activity included as part of the Australian economy.
47 Consistent with the SNA, net expenditure overseas adjustments are also applied to imports and exports, as well as household use, to align them with the residency view. These adjustments ensure that consumption of energy products by Australian residents travelling overseas and non-residents visiting Australia are respectively added to imports and exports, with corresponding adjustments to household use.
Methods for calculating monetary energy supply and use
48 Monetary supply and use tables present monetary estimates valuing energy products from both a user and producer perspective. These supply and use tables illustrate the economic transactions associated with the generation and use of different energy types and include the domestic consumption of energy produced overseas (imports) and energy produced in Australia and consumed overseas (exports).
49 The monetary supply and use tables are constructed by mapping data from the Australian supply-use benchmarks to certain industry and product groupings. Considerable effort has been made to ensure coherence between the resulting tables and the supply-use benchmarks underpinning the latest national accounts.
50 Monetary estimates are limited to coal, gas, oil, petroleum products and electricity generation (referred to as 'energy products'). These monetary estimates do not include renewable energy sources (see section below).
51 The supply and use of energy products are respectively valued at basic prices and purchasers' prices. The distinction between these pricing bases stems from the treatment of taxes, subsidies, and margins.
52 For each energy product, total supply at purchasers' price is equal to the total use at purchasers' price. This reflects the following accounting identity for monetary energy flows:
53 Monetary supply and use tables encompass:
Data quality and reliability
54 Due to recent revisions to AES and other source data, the 2002-03 to 2015-16 supply and use figures have been adjusted from previously published figures.
55 Energy indicators are used to provide a greater understanding or consequences of the production and use of energy.
56 Energy indicators may relate to social, economic and environmental dimensions. Information contained in the EAA combined with additional demographic and economic information provides insights into energy efficiency and energy productivity. Indicators used in the EAA can be divided into three sectors: total economy indicators; industry indicators and; household indicators.
Total economy indicators
57 The degree of self-sufficiency (or dependence on imports) measures the proportion of domestically produced energy compared to net energy use plus losses (equivalent to net domestic use plus exports). A self-sufficiency rating of over 100 indicates a net exporter of energy products.
58 One of the means of extending the life of energy products is to use those products that can be renewed through natural processes. The indicator share of renewable energy in net energy inputs measures the renewable content of non-renewable and renewable net energy supply. The indicator is calculated by dividing the net renewable energy supply by net energy supply.
59 Energy intensity is a ratio of energy consumed per unit of economic output. The energy intensity analysis is based on the ratios of physical net energy consumption (in gigajoules (GJ)) to industry gross value added (IGVA) data.
60 The EAA uses annually reweighted chain volume estimates of IGVA in the estimation of energy intensity from Australian System of National Accounts (cat. no. 5204.0). These IGVA estimates are re-weighted each year and therefore energy intensity measures are updated with each annual estimation cycle. For example, all figures contained in the EAA 2016-17 estimates of energy intensity are recorded in 2016-17 prices and are thus directly comparable over time.
61 Household physical energy use is presented on both a per person and per household basis. Household numbers are estimated using Household and Family Projections, Australia, 2011-2036 (cat. no. 3236.0). Population numbers are estimated using Australian Demographic Statistics, Jun 2018 (cat. no. 3101.0).
62 Household monetary energy use estimates are drawn from the monetary use tables. Estimates are presented in aggregate, and separately for gas, petroleum products and electricity.
Data Sources - Energy indicators
63 The primary source of data for energy indicators was the EAA 2016-17, and supplementary ABS sources as shown below.
64 ABS sources:
PHYSICAL ENERGY ASSET ACCOUNT
65 Asset accounts for energy resources consolidate relevant information including the levels and values of stocks and the changes in these over time.
Australia's National Classification System for Mineral Resources (2009 edition)
66 The ABS has adopted Australia's National Classification System for Mineral Resources (Geoscience Australia) to assign physical stocks based on Economic Demonstrated Resources (EDR) data.
67 EDRs are resources judged to be economically extractable and for which the quantity and quality are computed partly from specific measurements, and partly from extrapolation for a reasonable physical distance on geological evidence.
68 Coverage for the physical energy asset account includes the following energy assets:
69 The estimates contained in the physical energy asset tables are drawn from the following data sources:
METHODS FOR CALCULATING PHYSICAL ENERGY ASSET ACCOUNT
70 These notes are intended as a general guide to the method of calculating estimates physical energy asset account. For more detail please contact the National Information and Referral Service on 1300 135 070.
Physical stock account of energy assets
71 EDR data from the Australian System of National Accounts (cat. no. 5204.0) Table 62, Value of Demonstrated Mineral and Energy Resources, by Commodity was converted from weight/volume into energy units (petajoules). The conversion into petajoules allows comparability with the flow accounts (supply and use tables).
Physical energy asset account
72 The Net Present Value (NPV) was applied from the Australian System of National Accounts (cat. no. 5204.0) and is the expected value of the resource based on current resource prices, current extraction methods and costs, and on present physical rates of extraction.
73 The extraction rate measures the rate at which assets are being depleted and the remaining resource life measures life of a resource at current production rates.
74 The EDR/extraction rate ratio provides an indicator of years of availability of a resource under current levels of EDR's and extractions.
75 For further information on the compilation of energy asset accounts please see the SEEA Energy (draft), which is available from the United Nations Statistical Division.
76 Where necessary, tables have had values suppressed to protect confidentiality.
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