Physical Energy Flow Account for Estonia, Development of the Methodology

Statistics Estonia

Grant Agreement no 05122.2015.001-2015.538

Final Report

PHYSICAL ENERGY FLOW ACCOUNT FOR ESTONIA, DEVELOPMENT OF THE METHODOLOGY

Eda Grüner Kriste Kald Kaia Oras

2017 Contents LIST OF TABLES ...... 4 LIST OF FIGURES ...... 4 LIST OF TABLES IN ANNEX ...... 5 Abbreviations ...... 6 Acknowledgements ...... 7 1. Introduction ...... 8 2. Data sources for the compilation of Physical Energy Flow Account in Estonia and first results...... 10 2.1. Overview of Estonian energy sector and products covered...... 10 2.2. Data sources for the compilation of physical energy flow accounts ...... 13 2.2.1. Estonian replies to IEA/Eurostat Annual Energy Statistics Questionnaires ...... 13 2.2.1.1. Annual Coal Questionnaire ...... 14 2.2.1.2. Annual Electricity and Heat Questionnaire ...... 15 2.2.1.3. Annual Natural Gas Questionnaire ...... 17 2.2.1.4. Annual Oil Questionnaire ...... 18 2.2.1.5. Annual Renewable and Wastes Questionnaire ...... 20 2.2.2. Statistical databases ...... 24 2.2.2.1. Energy statistics ...... 24 2.2.2.2. Foreign trade statistics ...... 25 2.2.2.3. Data of statistical survey „Manufactured goods” ...... 25 2.2.3. Administrative data ...... 26 2.2.3.1. National Air Emission Point Sources Database ...... 26 2.2.3.2. Waste Management Data System ...... 26 2.2.3.3. The Environmental Permits Information System ...... 27 2.2.3.4. Reports of enterprises having greenhouse gases emissions permits ...... 27 2.2.3.5. The Estonian Motor Vehicle Register of Estonian Road Administration ... 28 2.2.3.6. Database of Estonian Geological Survey ...... 28 2.2.3.7. Business register ...... 28 3. Compilation of the PEFA ...... 29 3.1. Compilation of background tables for PEFA ...... 30 3.2. First results ...... 32 3.3. Energy products which needed extra effort for the compilation of the PEFA ...... 33 3.4. Oil shale and the compilation of PEFA for oil shale ...... 34 3.4.1. Overview ...... 34 3.4.1.1. General characteristics of oil shale ...... 34 3.4.1.2. Excavation of oil shale ...... 35 3.4.1.3. Use of oil shale ...... 35 2

3.4.1.4. Oil shale in energy statistics ...... 36 3.4.2. Oil shale in PEFA ...... 36 3.4.2.1. Analyses and the results of the suggested solutions ...... 38 3.4.3. Shale oil in PEFA ...... 41 3.4.4. Additional problems regarding oil shale in future development of Estonian PEFA compilation methodology ...... 43 3.5. Wood, wood waste and other solid biomass ...... 44 3.5.1. Supply side ...... 44 3.5.1.1. Production of fuel wood ...... 46 3.5.2. Use side ...... 46 3.6. Peat and peat products ...... 48 3.7. Waste for energy production ...... 50 3.7.1. Overview ...... 50 3.7.2. Compilation of PEFA ...... 51 3.8. Electricity and Heat ...... 53 3.9. Heat pumps – geothermal energy ...... 56 3.10. Solar energy ...... 57 3.11. Energy products from oil wastes ...... 57 3.12 . Petrochemical industry ...... 58 4. Compliance with National Accounts ...... 59 5. Summary, conclusions, remaining issues and further steps ...... 60 References ...... 63 ANNEX 1 Study visit to Belgium: agenda, discussions, conclusions ...... 64 ANNEX 2 Physical Energy Flow Account seminar in Estonia ...... 71 ANNEX 3 Energy statistics survey design ...... 80 ANNEX 4 Supply and use of wood, wood waste and other solid biomass by sectors in Estonia in 2014 ...... 82 ANNEX 5 Supply and use of peat and peat products by sectors in Estonia in 2014 ...... 84 ANNEX 6 Supply and use of PEFA Questionnaire ...... 85 ANNEX 7 Comparisons of PEFA Questionnaire Tables B and C ...... 87

LIST OF TABLES

Table 1. The timetable for the activities of PEFA project in Estonia in 2016 ...... 8 Table 2. Energy products coverage by Estonia’s energy statistics...... 12 Table 3. Products reported in the Annual Coal Questionnaire...... 14 Table 4. Reported supply and use of energy products ...... 15 Table 5. Reported amounts of produced electricity (GWh) ...... 16 Table 6. Reported amounts of produced heat (TJ) ...... 17 Table 7. Reported data about natural gas ...... 17 Table 8. Primary energy products and other refinery feedstock reported in the Annual Oil Questionnaire and reported amounts by Estonia ...... 18 Table 9. Secondary oil products reported in the Annual Oil Questionnaire and reported amounts by Estonia ...... 18 Table 10. Reported amounts of shale oil ...... 19 Table 11. Reported amounts of secondary oil products ...... 20 Table 12. Reported electricity production from renewable and waste products ...... 21 Table 13. Reported heat production from renewable and waste products ...... 21 Table 14. Reported renewable and waste products for transformation in energy sectors end use by Estonia ...... 21 Table 15. Reported produced electricity from renewables and wastes ...... 22 Table 16. Reported produced heat from renewables and wastes ...... 23 Table 17. Reported renewables and waste energy products ...... 23 Table 18. Energy products in PEFA and their availability in IEA/Eurostat Annual Questionnaires ...... 33 Table 19. Difference between oil shale balance in physical and energy units ...... 37 Table 20. Oil shale in COAL Questionnaire (TJ) ...... 38 Table 21. The estimation of physical and energy balance on the bases of various available information in literature and administrative data ...... 40 Table 22. Waste fuel in Estonia in 2014, TJ ...... 53 Table 23. Division key for electricity production...... 54 Table 24. Division key for heat production...... 54 Table 25. Different types of oil wastes for recycling in Estonia in 2014 ...... 58

LIST OF FIGURES

Figure 1. Main fuels used in Estonia in 2014 (%) ...... 10 Figure 2. Primary energy produced in Estonia in 2014 (%) ...... 11 Figure 3. Imported fuels in Estonia in 2014 (%) ...... 11 Figure 4. The production of wood, wood waste and other solid biomass in Estonia in 2014 .. 45 Figure 5. Supply of wood, wood waste and other solid biomass by economic sectors in Estonia in 2014 (%) ...... 45

Figure 6. The use of wood, wood waste and other solid biomass in Estonia in 2014 ...... 47 Figure 7. Use of wood, wood waste and other solid biomass by economic sectors in Estonia in 2014 (%) ...... 47 Figure 8. Use of peat and peat products, 2014 ...... 49 Figure 9. Waste distribution and allocation based on PEFA regulations ...... 51 Figure 10. Supply and use of heat from heat pumps by sectors, 2014 ...... 57

LIST OF TABLES IN ANNEX

ANNEX Table 1. Sectors coverage by energy statistics’ survey ...... 80 ANNEX Table 2. Supply of wood, wood waste and other solid biomass by sectors, TJ ...... 82 ANNEX Table 3. Use of wood, wood waste and other solid biomass by sectors, TJ ...... 82 ANNEX Table 4. Supply and use of peat and peat products by sectors, TJ ...... 84 ANNEX Table 5. Supply of natural energy inputs, energy products and energy residuals by product level in Estonia in 2014, TJ ...... 85 ANNEX Table 6. Use of natural energy inputs, energy products and energy residuals by product level in Estonia in 2014, TJ ...... 86 ANNEX Table 7. The comparisons of Table B (Physical use table of energy flows) and Table C (Physical use table of emission-relevant use of energy flows) ...... 87

Abbreviations

EGS: Estonian Geological Service GHG: Greenhouse Gases IEA: International Energy Agency JATS: Waste Management Data System KLIS: Environmental Permits Information System LoW: European List of Waste MAAR: Annual Report of Business Register NA: National Accounts NACE: Nomenclature of Activities in the European Community NCV: Net Calorific Value PEFA: Physical Energy Flow Account PRODCOM: Products of the European Community RDF: Refuse-Derived Fuel SEI: Stockholm Environmental Institute SHARES: Short Assessment of Renewable Energy Sources SNAP: Standardized Nomenclature for Air Pollutants SUT: Supply-Use Tables

Acknowledgements

The authors of this report would like to thank Ms Lies Janssen (Belgian Federaal Planbureau/Bureau fédéral du Plan), Mr Stephan Moll (Eurostat), Ms Helle Truuts (Statistics Estonia), Mr Sulev Soosaar (Tallinn University of Technology) and Mr Matti Viisimaa (Estonian Environmental Agency) for their contributions.

1. Introduction

The aim of this project - to develop the methodology for PEFA in Estonia and to produce the account for the year 2014 using existing data - was achieved. The methodologies are developed during the project year and are described in current report. The filled PEFA tables are attached to the report.

In 2016 Statistics Estonia started to work on a Physical Energy Flow Account (PEFA) in the framework of the current project in order to be able to provide data for Eurostat in 2017 when it will be obligatory according to the amendment 538/2014 of the regulation 691/2011. The aim of this 1-year pilot project was to develop the methodology for the Estonian Physical Energy Flow Account. Therefore the main objectives of this project were to identify the energy products produced and used in Estonia and to find possible data sources and methods to compile this account. The aim was to use existing statistical and administrative data sources and statistics and to apply PEFA Builder for compilation of PEFA.

The timetable of the carried out subsequent actions is presented in Table 1.

Table 1. The timetable for the activities of PEFA project in Estonia in 2016

Tasks Timetable Preparatory period – insight to the methodological materials 1. Energy Statistics Manual 2. PEFA Manual January 2016 3. PEFA Builder Manual; video guide 4. IEA/Eurostat Annual Questionnaires Applying PEFA Builder using Estonian energy statistics data of 2014 1. Compiling necessary data and tables for PEFA Builder February – April 2016 2. Compiling first version of Estonian energy account 3. Specifying data and renewing outcomes 4. Seminar with national experts Adapting the preliminary Physical Energy Flow Account to specifics of Estonia 1. Specification of economic activities 2. Coordination with SUT tables May – July 2016 3. Taking secondary activities into account 4. Consultations with energy experts 5. Study visit consultation with international expert Compiling Physical Energy Flow Account supply and use tables with all the improvements August – September 2016 1. Consultations with energy experts Revising the methodology 1. Seminar with national and international experts October – November 2016 2. Improving the methodology 3. Implementing revised methods to the PEFA Final compilation of energy account 1. Compiling PEFA Questionnaire December 2016 2. General quality control and discussion of problems what needs to be solved

3. Discussion of routine production process of the account Delivery of final report February 2017

All the activities planned in the timetable were completed.

The methodology was developed in the cooperation of knowledgeable staff in Statistics Estonia (leading environmental statisticians, accountants, energy statisticians, trade and production statisticians) and outside the Statistics Estonia. In order to develop and later in the second half of the project also to further improve the Physical Energy Flow Account in Estonia we consulted with national and international experts. Methods and the consistency of the PEFA was analyzed with the relevant experts. Consultations were held with; experts from Department of Thermal Engineering in Tallinn University of Technology, Estonian Environment Agency Environmental analysis department and with industry representatives.

Inorder to learn from other countries experience a study visit to Belgian Federaal Planbureau was organized (May 2016) where an overview of planned Estonian PEFA account was given and the feasible methodologies were discussed. The aim was to learn from Belgian Federaal Planbureau experiences and find possible solutions for our shortcomings. Representative of Belgian Federaal Planbureau was expert Ms Lies Janssen who has been responsible for compiling Physical Energy Flow Accounts. The agenda, discussion items and summary can be seen in Annex 1.

A seminar with Belgian and Eurostat experts and national experts in Estonia (October 2016) was also held in the framework of this project. The aim was similar as for Belgian Federaal Planbureau study visit: to introduce our methodologies and get relevant feedback. Also to examine the corrections we have made so far and discuss further activities. The agenda, discussion items and summary can be seen in Annex 2.

Despite the fact that methods for PEFA are basically developed, there are still minor issues regarding standardization of the compilation process, coverage of the more rare energy products and quality improvements which have to be solved in 2017 as planned for the next project. Sustainability of the dataflow is also important aspect for us to consider as in this first compilation of PEFA several assumptions were made based on experts’ opinion. In a future for regular data delivery continuous flow from databases would be desirable and preferred for the experts’ opinions.

Current report at first describes the data sources (Chapter 2) and gives an overview of the Estonian energy sector, then describes the applied methods for the compilation of PEFA (Chapter 3). Chapter 4 outlines the measures taken to ensure the consistency with national accounts. Chapter 5 outlines the results with conclusions and further issues for improvement.

2. Data sources for the compilation of Physical Energy Flow Account in Estonia and first results.

2.1. Overview of Estonian energy sector and products covered

At first in order to illustrate the energy sector in Estonia following three figures display the use of main energy products in Estonia, the production of primary energy products and main imported energy products in Estonia in 2014. The shares are calculated based on Estonia’s energy balance in energy units (TJ).

Figure 1. Main fuels used in Estonia in 2014 (%)

Motor gasoline Other 6% 3% Transport diesel 8%

Heating and other fuel oil 1% Residual fuel oil 7% Natural gas Oil shale 5% 55%

Biomass 14%

Peat 1%

As Figure 1 shows the main energy product used in Estonia is the oil shale. Oil shale is the main natural resource for producing electricity. In Estonian primary energy production the share of oil shale is even higher as can be seen in next figure.

Figure 2. Primary energy produced in Estonia in 2014 (%)

other fuel hydro and wind 2% 1%

Biomass 19% Peat 1%

Oil shale 77%

The category “other fuel” includes black liquor, biogas, waste fuel and other biomass like straw, rape residues and animal waste. Figure 3 shows what the main imported fuels in Estonia are.

Figure 3. Imported fuels in Estonia in 2014 (%)1

Coal and coke Jet fuel 2% Biomass 2% 1%

Natural gas Motor gasoline 18% 20% LPG 1%

Transport diesel Residual fuel oil 28% 25%

Heating and other fuel oil 3% Following table shows which kind of energy products, from PEFA relevant NACE breakdown tables, are covered by Estonia’s energy statistics and which are not. The NACE breakdown

1 Imported municipal waste and RDF are not reflected on a current graph 11 tables’ fuel classification was taken as the bases to provide this overview because this is most detailed information about energy products required by PEFA.

Table 2. PEFA relevant energy products coverage in Estonia’s energy statistics

Energy products which are covered by Energy products which are not covered Estonia’s energy statistics by Estonia’s energy statistics Oil shale and oil sands Patent fuel Other bituminous coal Anthracite Coke oven coke Coking coal Non-biogasoline Sub-bituminous coal Road diesel Gas coke Aviation gasoline Coal tar Non-bio jet kerosene Lignite Heating and other gas oil BKB Fuel oil – low sulphur (<1%) Crude oil Lubricants Natural gas liquids Bitumen Refinery gas Natural gas Ethane LPG Biogasoline Gas works gas Other kerosene Biogases Gasoline type jet fuel Peat Bio jet kerosene Peat products Naphtha Municipal waste (non-renewable) Non-bio gas/diesel oil Solid biofuel excluding charcoal Bio road diesel Electricity Bio heating and other gas oil Heat Non-bio road diesel Non-bio heating and other gas oil Fuel oil – high sulphur (>=1%) White spirit and SBP Petroleum coke Paraffin waxes Other oil products Coke oven gas Blast furnace gas Other recovered gases Solar thermal heat Municipal waste (renewable) Industrial waste Charcoal Other liquid biofuels Geothermal

The energy products in the column “energy products which are not covered by Estonia’s energy statistics” which are displayed in italics on gray background are the products that are used in Estonia which produced or used quantities are very small or energy statistics does not have information about them or which have been considered to be irrelevant for energy statistics. For example geothermal energy is irrelevant for energy statistics because it is captured with heat pumps and the heat is used for own consumption but energy statistics covers at present only this kind of heat which is sold to third parties. Those products which 12 are not indicated by energy statistics but still used in Estonia were investigated in more detailed in the course of this project in order to reflect them in Estonia’s PEFA.

2.2. Data sources for the compilation of physical energy flow accounts

As the decision was made that for the compilation of Physical Energy Flow Account PEFA Builder would be used the five energy statistics IEA/Eurostat Annual Questionnaires which is a main data source for PEFA builder, were analyzed firsthand. In order to fill in NACE breakdown tables and ensure the quality of the PEFA supply and use tables basic data from energy statistics and variety of additional data sources were used.

2.2.1. Estonian replies to IEA/Eurostat Annual Energy Statistics Questionnaires

PEFA Builder did not technically reveal any major problem which would hinder the use of PEFA Builder with reported information in the Annual Energy Statistics Questionnaires. However the problems appeared after the Annual Energy Statistics Questionnaires were used for compiling PEFA and the results were analyzed. For example in mass units all the reported quantities are in balance. PEFA Builder finds no statistical difference between supply and use for mass units but that can’t be said about energy units for some products. This problem lies in the fact that conversion from mass units to energy units is being made. In some cases different calorific values are being used for the same energy product that is being used for different purposes and when energy amounts are being summarized the balance between supply and use is lost. In the context of PEFA this problem ends up in the final PEFA tables as a statistical discrepancy between supply and use. This issue is being dealt with in a more detailed way in the respective chapter 3 of this report. Other issues are related to the insufficient reporting as some energy products are not reported or are not reported enough detailed level for PEFA and PEFA Builder needs. Coal and Renewable Questionnaires caused most of the problems while compiling of PEFA. If Coal Questionnaire problem was related to one big issue (oil shale balance in energy units) than Renewable Questionnaire has multiple but minor problems. All these issues are dealt in respective energy product related chapters.

The aim of this chapter is to provide the description of the content of the IEA/Eurostat Annual Energy Statistics Questionnaires Estonian reporting as those serve as initial bases of the PEFA compilation. The Annual Energy Statistics Questionnaires are being filled in by Statistics Estonia – Estonian government organization in the domain of Estonian Ministry of Finance. The data in the Estonian Annual Energy Statistics Questionnaires time series dates back to year 1990. International Energy Agency (IEA), Eurostat and the United Nations Economic Commission for Europe (UNECE) collect annual statistics about energy use of member countries every year using five joint questionnaires: Oil, Coal, Gas, Electricity and Heat and Renewables based on harmonized definitions, units and methodology, every year.

(OECD/IEA, 2005) The data in the five IEA/Eurostat Annual Energy Statistics Questionnaires should in principle cover majority of what is needed to compile Physical Energy Flow Accounts (PEFA). IEA/Eurostat Annual Energy Statistics Questionnaires have data about energy products but does not contain information about natural energy inputs and energy residuals. Natural energy inputs and energy residuals values were approximated from the energy production data. The natural energy inputs were approximated from the energy product supply data. The amounts of energy residuals were derived from the end use of energy product use by assuming that the amount of energy end used is equal to the amount of dissipative heat released through the products consumption. (Eurostat, 2014)

2.2.1.1. Annual Coal Questionnaire

The Annual Coal Questionnaire covers peat, oil shale and coal and products derived from them (including both solid fuels and gases produced during coal and oil shale processing and by coal and oil shale transformation) which are being supplied by indigenous production or imports from rest of the world and used in transformation sector and in final consumption or being exported. Unit 103t (thousand tonnes) is being used for solid fuels and unit TJ (GCV) is being used for derived gases from coal and oil shale processing and transformation. (OECD/IEA, 2005) The questionnaire also provides information about gross and net calorific values for solid fuels in megajoules per tonne (MJ/tonne). All the specific primary and secondary energy products reported and also those considered to be not relevant in Estonian case can be seen in Table 3.

Table 3. Products reported in the Annual Coal Questionnaire.

n Product Amount Unit

1 Anthracite - 103t 2 Coking coal - 103t 3 Other bituminous coal 82 103t 4 Sub-bituminous coal - 103t 5 Lignite - 103t 6 Patent fuel - 103t 7 Coke oven coke - 103t 8 Gas coke - 103t 9 Coal tar - 103t 10 BKB - 103t 11 Gas works gas 7 201 TJ (gross) 12 Coke oven coke 25 TJ (gross) 13 Blast furnace gas - TJ (gross) 14 Other recovered gases - TJ (gross) 15 Peat 261 103t 16 Peat products 62 103t 17 Oil shale and sands 20 995 103t

In the Estonian case the indigenously produced primary energy products which are reported in the Annual Coal Questionnaire are oil shale and peat. The reported amounts of indigenous production for the year 2014 were 20 995 thousand tonnes for oil shale and 261 thousand tonnes for peat. The secondary energy products which are indigenously produced in Estonia and reported in the Annual Coal Questionnaire are gas works gas, coke oven coke and peat products which are derived from processing and transformation of oil shale and peat. The reported amounts were 7 201 TJ for gas works gas, 25 thousand tonnes for coke oven coke and 62 thousand tonnes for peat products. In the year 2014 there was imported only one energy product – other bituminous coal which was reported in the Annual Coal Questionnaire. The amount was 82 thousand tonnes. In the year 2014 there was exported also only one energy product – coke oven coke which was reported in the Annual Coal Questionnaire. The amount was 26 thousand tonnes. More detailed overview of supplied and used energy products can be seen in Table 4.

Table 4. Reported supply and use of energy products

Other Coke Gas Peat Peat Oil shale bitumin oven works 103t products and oil ous coal coke 103t gas TJ 103t sands 103t 103t (gross) Indigenous production 25 7 201 261 62 20 995 Total imports 82 Total exports 26 50 Stock changes -4 1 -36 -367 Transformation sector 3 6 148 225 20 349 Main activity producer ele. plants 1 3 200 14 577 Main activity producer CHP plants 1 2 028 66 652 Main activity producer heat plants 1 920 35 Autoproducer heat plants 20 Coke ovens 103 BKB/PB plants 104 Gas works 1 043 Coal liquefaction plants 3 974 Energy industry own use Sector 1 1 053 18 Own use in ele. CHP, heat plants 1 Coal mines 18 Coal liquefaction plants 1 053 Total final consumption 74 12 261

2.2.1.2. Annual Electricity and Heat Questionnaire

The Annual Electricity and Heat Questionnaire provides data on all sources of electricity, public heat and autoproducer sold heat, their consumption and the quantities of fuel used to produce them. The information about electricity generating capacity and peak annual electricity load is also included. The reporting of electricity and heat production is made on several levels which reflects the energy source, function of the producer and the plant type. The energy source refers to the kinetic, thermal or combustible fuel used as the input to generate electricity and heat. There are two functions for the producer: a public producer (public or privately owned) of electricity or heat which supplies electricity and heat as its 15 main business and autoproducer of electricity or heat which produces electricity and heat for its own use but not as its main business. The questionnaire classifies electricity and heat- generating plants into three types: electricity-only plants which generate electricity only, combined heat and power (CHP) which generate heat and electricity simultaneously, heat- only plants which generate heat only. Unit gigawatt hour (GWh) is being used for electricity and TJ for heat. (OECD/IEA, 2005)

The reported total amounts (Table 5) of produced electricity and heat for Estonia according to the Annual Electricity and Heat Questionnaire for the year 2014 were 12 446 gigawatt hours’ gross and 21 812 TJ, respectively. For electricity 12 389 gigawatt hours was produced by main activity producer plants from which 11 191 gigawatt hours was produced by electricity- only plants and 1 198 gigawatt hours was produced by CHP plants. 62 gigawatt hours of electricity was produced by autoproducer plants from which 15 gigawatt hours was produced by electricity only plants and 42 gigawatt hours was produced by CHP plants. Electricity produced from solar energy is not included in Electricity and Heat Questionnaire.

Table 5. Reported amounts of produced electricity (GWh)

Main activity producer Autoproducer plants Total (GWh) plants (GWh) (GWh) Electricity CHP Electricity CHP Main activity Autoproducer producer Electricity 11 191 1 198 15 42 12 389 57 Nuclear Hydro 26 1 26 1 Pumped hydro Geothermal Solar Tide, wave, ocean Wind 590 14 590 14 Combustible fuels 10 575 1 198 42 11 773 42 Heat from chemical sources Other sources

For heat (Table 6) 20 523 TJ was produced by main activity producer plants from which 11 408 TJ was produced by CHP plants and 9 115 TJ by heat-only plants. 1 289 TJ was produced by autoproducer plants from which all the amount was produced by heat-only plants. The reported total amount of electricity imports was 3 730 gigawatt hours and exports 6 484 gigawatt hours. Heat produced from geothermal and solar energy is not included in Electricity and Heat Questionnaire, also the heat from heat pumps.

Table 6. Reported amounts of produced heat (TJ)

Main activity producer Autoproducer plants Total (TJ) plants (TJ) (TJ) CHP Heat CHP Heat Main activity Autoproducer producer Heat 11 408 9 115 1 289 20 523 1 289 Nuclear Geothermal Solar Combustible fuels 11 408 9 115 1 289 20 523 1 289 Heat pumps Electric boilers Heat from chemical sources Other sources

2.2.1.3. Annual Natural Gas Questionnaire

The Annual Natural Gas Questionnaire collects data about production of natural gas including associated (produced in conjunction with oil) and non-associated gas (production from gas reservoir not associated with oil). Manufactured gases (gas-works gas, NGL, LPG) should not be included in this questionnaire. In Estonian case the gas-works gas from shale oil production process is included in Coal Questionnaire in category “gas-works gas”. Data are reported in both energy and volume units. Unit TJ is used for energy and unit million cubic meters (Mm3) is used for volume (standard conditions used for measurement – 15 degrees Celsius and 760mm Hg pressure). (OECD/IEA, 2005)

In the Estonian case there is no indigenous production of natural gas. All the used natural gas is imported. The reported amount of natural gas (Table 7) in the Annual Gas Questionnaire for the year 2014 was 530 million cubic meters (20 262 TJ). The whole amount with average GCV of 38 230 kJ/m3 was imported from Russia.

Table 7. Reported data about natural gas

Million m3 (at TJ (Gross Average GCV Average 15°C, 760 mm calor. Value) (kJ/m3) NCV (kJ/m3) Hg) Indigenous production Associated gas Non-associated gas Colliery gas Receipts from other sources Imports (Balance) 530 20 262 38 230 34 407 Exports (Balance) International marine bunkers Stock changes Inland consumption 530 20 262 38 230 34 407 (Calculated) Statistical difference Inland consumption (Observed) 530 20 262 38 230 34 407

2.2.1.4. Annual Oil Questionnaire

The Annual Oil Questionnaire collects information about oil products processed in refineries and the petroleum products made from them. Other primary or secondary oil products besides crude oil can also be used as refinery feedstock: natural gas liquids (NGL), additives and oxygenates and other hydrocarbons like shale oil or synthetic crude oil from tar sands. Specific primary energy products and refinery feedstock covered in the Annual Oil Questionnaire can be seen in Table 8. (OECD/IEA, 2005)

Table 8. Primary energy products and other refinery feedstock reported in the Annual Oil Questionnaire and reported amounts by Estonia

n Product Amount Unit

1 Crude oil - 103t 2 Natural gas liquids - 103t 3 Additives/oxygenates (inc. biofuels) - 103t 4 Other hydrocarbons 697 103t

A lot of different secondary products are derived from crude oil – light products like liquefied petroleum gas (LPG) and motor gasoline, heavier products such as fuel oil. The unit used for oil data is thousand metric tons. All the specific secondary oil products can be seen in Table 9. The questionnaire also collects information about average net calorific values for oil products in kilojoule per kilogram (kJ/kg). (OECD/IEA, 2005)

Some energy products (e.g. aviation gasoline, paraffin waxes, other oil products from crude oil) are used in Estonia but are not covered by Estonian energy statistics at present and not filled in Estonian Oil Questionnaire.

Table 9. Secondary oil products reported in the Annual Oil Questionnaire and reported amounts by Estonia

n Product Amount Unit

1 Crude oil - 103t 2 Natural gas liquids - 103t 3 Refinery gas - 103t 4 Ethane - 103t 5 LPG 16 103t 6 Naphtha - 103t 7 Biogasoline 9 103t 8 Non-biogasoline 425 103t 9 Aviation gasoline - 103t 10 Gasoline type jet fuel - 103t 11 Bio kerosene - 103t 12 Non-bio jet kerosene 53 103t 13 Other kerosene - 103t 14 Road diesel 452 103t 15 Heating and other gas oil 239 103t

16 Biodiesels - 103t 17 Non-bio gas/diesel oil 691 103t 18 Fuel oil low Sulphur (<1%) 602 103t 19 Fuel oil high Sulphur (>=1%) - 103t 20 White spirit and SBP - 103t 21 Lubricants 9 103t 22 Bitumen 98 103t 23 Paraffin waxes - 103t 24 Petroleum coke - 103t 25 Other oil products - 103t

In the Estonian case the only oil product being produced is shale oil which is categorized as other hydrocarbons (Table 10) n the Annual Oil Questionnaire. It is important to note that in Estonia shale oil is not processed in refineries and hence it is reported in Coal Questionnaire as produced in coal (oil shale) liquefaction plants. The reported amount of produced shale oil in the Annual Oil Questionnaire for the year 2014 was 697 thousand metric tonnes out of which 603 thousand metric tonnes was exported and 94 thousand metric tonnes used locally.

Table 10. Reported amounts of shale oil

Cru Natural Refinery Additives/oxy Of which Other de gas feedstock genates biofuels hydrocarbo oil liquids s ns Indigenous production Receipts from other sources 697 Backflows Products transferred Imports (Balance) Exports (Balance) 603 Direct use 94 Stock changes Refinery intake (Calculated) Statistical difference Refinery intake (Observed)

Refineries for crude oil do not exist in Estonia but shale oil production should be (but is not) indicated in principle under cathegory “Refinery intake” according to technological process and PEFA logic as well.

All other secondary oil products used in Estonia were imported except shale oil which is indicated in Table 11 under total gas/diesel oil and total fuel oil as “Primary product receipts”. Imported products and amounts were: LPG – 16 thousand metric tonnes, total motor gasoline – 434 thousand metric tonnes, kerosene type jet fuel – 53 thousand metric tons, total gas/diesel oil – 691 metric tonnes, total fuel oil – 602 thousand metric tonnes, lubricants – 9 thousand metric tonnes and bitumen 98 thousand metric tonnes. The importe articles appeared as export articles as well: LPG – 6 thousand metric tonnes, total motor gasoline – 194, total kerosene type jet fuel – 13 thousand metric tonnes, total gas/diesel oil – 9 thousand metric

19 tonnes, total fuel oil – 317 thousand metric tonnes, lubricants – 6 thousand metric tonnes, bitumen – 7 thousand metric tonnes. The problems regarding the allocation of quantities of secondary oil products in Table 11 are discussed in chapter 3.4.3 while the allocation of shale oil is discussed.

Table 11. Reported amounts of secondary oil products

LPG Total Total Total Total Lubrica Bitumen 103t motor kerosene gas/diesel fuel nts 103t 103t gasoline type jet oil 103t oil 103t fuel 103t 103t Primary product receipts 28 66 Refinery gross output Recycled products Refinery fuel Imports (Balance) 16 434 53 691 602 9 98 Exports (Balance) 6 194 13 9 317 6 7 International marine bunkers 50 281 Interproduct transfers Products transferred Stock changes -1 2 9 -27 Gross inland deliveries (Calc.) 9 242 40 669 43 3 91 Statistical difference Gross inland deliveries (Obs.) 9 242 40 669 43 3 91

2.2.1.5. Annual Renewable and Wastes Questionnaire

The Annual Renewables and Wastes Questionnaire should allocate energy products which have been produced from renewable energy resources and wastes. In the questionnaire the renewable and waste products should be classified into three main groups:

1) products which need to be transformed into electricity in order to be captured (hydro, solar, wind) 2) products which are produced and then can be input for multiple uses in the transformation and final consumption sectors (geothermal, solar thermal), these products cannot be stored 3) products which are produced and used for multiple purposes in the transformation and final consumption sectors (waste, fuel wood, biogas, liquid biofuels), these products can be stored.

Unit megawatt-hour (MWh) is used for electricity production, unit TJ is used for heat production, unit TJ is used for most fuels and unit thousand tonnes (103t) is used for some fuels. (OECD/IEA, 2005)

All the specific products reported in the questionnaire for electricity and heat production and supply, transformation, energy sectors & end use can be seen in Tables 12, 13, 14.

Table 12. Reported electricity production from renewable and waste products

n Product Main Autoproducer Unit activity producer 1 Hydro 25 544 1 490 MWh 2 Hydro 1 MW 25 544 1 490 MWh 3 Hydro 1-10 MW - MWh 4 Hydro 10+ MW - - MWh 5 Pumped hydro - - MWh 6 Geothermal - - MWh 7 Solar photovoltaic - - MWh 8 Solar thermal - - MWh 9 Tide, wave and ocean - - MWh 10 Wind 590 122 13 558 MWh 11 Industrial waste - - MWh 12 Municipal waste (renew.) - - MWh 13 Municipal waste (non-renew) 73 000 - MWh 14 Solid biofuels 704 000 27 000 MWh 15 Biogases 27 000 - MWh 16 Biodiesels - - MWh 17 Other liquid biofuels - - MWh

Table 13. Reported heat production from renewable and waste products

n Product Main Autoproducer Unit activity producer 1 Geothermal - - TJ 2 Solar thermal - - TJ 3 Industrial Waste - - TJ 4 Municipal waste (renew) - - TJ 5 Municipal waste (non-renew) 893 - TJ 6 Solid biofuels 7 177 439 TJ 7 Biogases 56 - TJ 8 Biodiesels - - TJ 9 Other liquid biofuels - - TJ

Table 14. Reported renewable and waste products for transformation in energy sectors end use by Estonia

n Product Amount Unit

1 Geothermal energy - TJ (NCV) 2 Solar thermal - TJ (NCV) 3 Industrial waste (non-renewable) - TJ (NCV) 4 Municipal Waste renewable - TJ (NCV) 5 Municipal waste non-renewable 2 851 TJ (NCV) 6 Solid biofuels excluding charcoal 46 980 TJ (NCV) 7 Charcoal - 103t 8 Biogases 403 TJ (NCV) 9 Biogasoline - 103t 10 Bioethanol - 103t

11 Bio jet kerosenes - 103t 12 Biodiesels - 103t 13 Other liquid biofuels - 103t

The reported amounts for the year 2014 in the Annual Renewables and Wastes Questionnaire of electricity production for main activity producer plants was 1 419 666 megawatt-hours (MWh) and production for autoproducer plants was 42 048 mega-watt hours (MWh). For the main activity producer plants 676 666 mega-watt hours was indicated as produced by electricity only plants (25 544 megawatt-hours hydro energy, 590 122 megawatt-hours wind energy, 61 000 megawatt-hours solid biofuels) and 743 000 megawatt-hours was indicated as produced by CHP plants (73 000 megawatt-hours municipal waste (non-renew), 643 000 megawatt-hours solid biofuels, 27 000 megawatt-hours biogases). For the autoproducer plants 15 048 megawatt-hours was indicated as produced by electricity only plants (1 490 megawatt- hour hydro energy, 13 558 megawatt-hours wind energy) and 27 000 megawatt-hours by CHP plants (27 000 megawatt-hours solid biofuels).

Table 15. Reported produced electricity from renewables and wastes

Main activity Autoproducer Total (MWh) producer plants plants (MWh) (MWh) Electricity CHP Electricit CHP Main Autoproducer y activity producer Total 676 666 743 000 15 048 27 000 1 419 666 42 048 Hydro 25 544 1 490 25 544 1 490 Hydro-1 MW 25 544 1 490 25 544 1 490 Hydro 1-10 MW Hydro 10+ MW Pumped hydro Geothermal Solar photovoltaic Solar thermal Tide,wave and ocean Wind 590 122 13 558 590 122 13 558 Industrial waste Municipal waste (renew.) Municipal waste (non-renew) 73 000 73 000 Solid biofuels 61 000 643 000 27 000 704 000 27 000 Biogases 27 000 27 000 Biodiesels Other liquid biofuels

The reported amounts of heat production for main activity producer plants was 8 126 TJ and for autoproducer plants was 439 TJ. For the main activity producer plants 6 506 TJ was indicated as produced by CHP plants (893 TJ municipal waste (non-renew), 5 557 TJ solid biofuels, 56 and 1 620 TJ by heat only plants. For the autoproducer plants 439 TJ was indicated as produced by heat only plants (439 TJ solid biofuels). There are some energy products (e.g. geothermal, solar thermal, industrial waste, renewable municipal waste and

22 charcoal) which are not covered by Estonian Renewable Questionnaire in 2014. The non- renewable municipal waste is not correctly indicated.

Table 16. Reported produced heat from renewables and wastes

Main activity Autoproducer Total (TJ) producer plants plants (TJ) (TJ) CHP Heat CHP Heat Main Autoproducer activity producer Total 6 506 1 620 439 8 126 439 Geothermal Solar thermal Industrial waste Municipal waste (renew.) Municipal waste (non-renew.) 893 893 Solid biofuels 5 557 1 620 439 7 177 439 Biogases 56 56 Biodiesels Other liquid biofuels

The indigenously produced renewable and waste energy products which are reported for supply, transformation, energy sectors & end use (Table 17) are municipal waste non- renewable 2 851 TJ, solid biofuels excluding charcoal 46 980 TJ and biogases 403 TJ. One renewable energy product was reported as import – solid biofuels excluding charcoal 1 265 TJ. The same product was reported as export as well – solid biofuels excluding charcoal 14 790 TJ.

Table 17. Reported renewables and waste energy products

Municipal waste Solid biofuels Biogases Renewa Non- Solid biofuels Charcoal Biogases TJ ble TJ renewable excluding 103t (NCV) (NCV) TJ (NCV) charcoal TJ tonnes (NCV) Indigenous production 2 851 46 980 403 Total imports (balance) 1 265 Total exports (balance) 14 790 Stock changes 7 -410 Inland consumption (calc.) 2 858 33 045 403 Statistical differences Transformation sector 1 455 13 210 191 Main activity producer plants 313 Main activity producer CHP plants 1 455 9 500 191 Main activity producer heat plants 2 650 Autoproducer electricity plants Autoproducer CHP plants 127 Autoproducer heat plants 620 Energy sector 696 56 12 23

Own use in ele., CHP, heat plants 696 59 12 Total final consumption 707 19 779 200

2.2.2. Statistical databases

2.2.2.1.Energy statistics

Basic data presented by enterprises on energy production and consumption to Statistics Estonia was important primary datasource and were used for various purposes while compiling and improving initial PEFA.

In energy statistics the data on energy production are collected from all enterprises producing primary or converted energy. Data on energy and fuel consumption, energy production and sales are collected by sample survey. The population of survey consists of economically active enterprises. Enterprises with more than 49 employees are enumerated completely. The rest of enterprises are sampled. Data on the households’ consumption of energy and fuels have been collected from energy sale enterprises and adjusted on the basis of the energy consumption-related data received from the Household Budget Survey. The consumption of fuels by farms has been calculated based on the sown area of different kinds of crops.

The data on the imports and exports of fuels and energy in energy statistics are based on the customs statistics, which have been complemented with the data submitted by enterprises.

The energy statistics surveys gather detailed information from enterprises about their energy production and consumption. About each energy product formed database contains following information on enterprise level:

 Stocks at the beginning of the year  Purchased amounts  Production output  Consumed amounts in physical units and monetary values: o as raw material o for electricity production o for heat production o for conversion to other fuels o for transportation of which road transport o other uses  Sold quantities  Losses  Stocks at the end of the year

However there are some shortcomings in respect of PEFA compilation with energy statistics survey data. For example the survey sample is not representative on the level of NACE breakdown needed for PEFA. Data for production enterprises (manufacturing sector) were of rather good quality but data of service activities were of too low coverage (the design of energy statistics survey can be seen in Annex 3).

2.2.2.2. Foreign trade statistics

For the PEFA basic data presented by enterprises to Statistics Estonia were used as additional information for more detailed analyses of some energy flows.

Foreign trade statistics is collected by two different data collecting systems:

1) Intrastat — the special system for collecting statistics on the trade in goods between the Member States of the European Union (EU). Statistics Estonia is the institution responsible for the Intrastat data collection directly from enterprises involved in foreign trade. Intrastat data are based on statistical survey and companies with lower foreign trade turnover are not obliged to submit data. 2) Extrastat — the special system for collecting statistics on the trade in goods between the EU Member States and non-EU countries. Tax and Customs Board is the institution responsible for the Extrastat data collection. Extrastat data are based on customs declarations and contain practically the whole information on the trade with non-EU countries. There are no data losses caused by non-response or by other issues.

Statistical database contains all data collected through Extrastat and Intrastat systems. Commodities are classified according to the numerical codes of the Combined Nomenclature (CN).

2.2.2.3. Data of statistical survey „Manufactured goods”

For the PEFA basic production data presented by enterprises to Statistics Estonia were used as additional information for more detailed analyses of the energy production.

Data are collected with the statistical annual report (“Manufactured goods”). The respondents are enterprises operating in the territory of Estonia, with 10 and more persons employed, whose primary or secondary activity is manufacturing. In exceptional cases, enterprises with less than 10 persons employed are also included in the survey as respondents.

Manufactured goods are classified according to the List of Products of the European Community (PRODCOM).

2.2.3. Administrative data

2.2.3.1. National Air Emission Point Sources Database

For the PEFA basic data presented by enterprises to National Air Emission Point Sources Database was used as additional information in order to further specify energy users, products and their calorific values.

National Point Sources Air Emission Database is database of facilities having air pollution permits. This database is kept by Estonian Environment Agency and is yearly updated. Each facility having air pollution permit is classified according NOSE and SNAP codes. Database includes also information about owner companies of facilities. According to the air pollution permit, the companies have obligation to report yearly the amount of air emissions generated by the facilities they are operating. Operator is also obligated to report pollutants emission and activities data by sources of pollution like fuel used and fuel characteristics (net calorific value, content of sulfur), solvents used, liquid fuels distributed, industrial processes, livestock in agriculture, data about production, raw materials use, control equipment and other information.

In order to accumulate data on point sources, the web-interface air emission data system for the point sources (OSIS) is used in Estonian Environment Agency. Operators of point sources directly complete their annual air pollution reports in OSIS.

2.2.3.2. Waste Management Data System

For the PEFA basic data presented by enterprises to Waste Management Data System were used as a source of information for the waste streams used for energy production.

The control over waste management, incl. collection and transport, is exercised via the system of issuing waste permits and integrated environmental permits. A waste permit is a document, which gives the right for disposal and recovery of waste, generation of waste and collection and transport of waste on professional basis. Waste permits are issued by Environmental Board according to relevant legal acts. Waste permit holders are required to keep regular records of the type, quantity, properties and generation of the waste produced, collected, stored or temporarily stored, transported, recovered or disposed of during its activities and report yearly for the entry into the Waste Management Data System.

Waste Management Data System is maintained by Estonian Environment Agency. Waste Management Data System includes information about type of waste produced and treated in Estonia; amount of waste; origin of waste; persons dealing with waste treatment; waste treatment sites for waste treatment and disposal; imported-exported amounts of wastes.

2.2.3.3. The Environmental Permits Information System

For the PEFA basic data presented by enterprises to The Environmental Permits Information System were used as a most detailed source of information regarding some energy flows in case of some specific enterprises.

Possession of an environmental permit gives the right to use a given natural resource, emit pollutants and waste, and develop business activity in cases set forth in legislation.

Integrated environmental permit is granted for simultaneous emission of pollutants into ambient air, body of water, soil or groundwater layer and waste handling pursuant to the Industrial Emissions Act. Simple environmental permit is granted for exploitation of a specific natural resource, for emitting pollutants into the environment from a pollution source or waste handling (e.g. prospecting permit, mining permit, permit for the special use of water, ambient air pollution permit etc). Simple permits are issued on the basis of legal acts governing a specific field

Applications for environmental permits are processed by the Environmental Board and in certain fields, local governments as well.

The Environmental Permits Information System is an online document management system, the purpose of which is to guarantee the uniform proceeding of environmental permits, enabling to study and analyze the environmental exploitation taking place based on the existing environmental permits.

2.2.3.4. Reports of enterprises having greenhouse gases emissions permits

For the PEFA basic data presented by enterprises to Estonian Greenhouse Gas Emissions Trading Registry were used to identify the composition of the incinerated waste.

Enterprises operating the facilities listed in Ambient Air Protection Act have to apply for permit of GHG emissions. These permits are issued by Ministry of Environment. Ministry of Environment is also keeping the Estonian Greenhouse Gas Emissions Trading Registry, which is part of EU Greenhouse Gas Emissions Trading Registry. Each enterprise which has been issued the GHG emission permit and is included into the Estonian Greenhouse Gas Emissions Trading Registry has to present the annual report to Ministry of Environment indicating the emitted GHG quantities and GHG quantities used for trading. Annual reports include also data on used fuels and their calorific values.

2.2.3.5. The Estonian Motor Vehicle Register of Estonian Road Administration

For the PEFA the information Motor Vehicle Register of Estonian Road Administration was used to calculate the distribution keys for lubricants.

The Estonian Road Administration (ERA) is a government agency operating within the administrative area of the Ministry of Economic Affairs and Communications. The Estonian Road Administration deals with all procedures connected with motor vehicles. The Estonian Road Administration keeps also the database of motor vehicles registered in Estonia (Estonian Motor Vehicle Register). This database includes data about vehicles type (passenger cars, light and duty vehicles, buses, and motorcycles), owner and responsible user of vehicles (business register code in case of legal entity and personal identity code in case of private person), fuel type used by vehicle (gasoline, diesel, gas, and electricity), etc.

2.2.3.6. Database of Estonian Geological Survey

For the PEFA basic data presented by enterprises to Database of Estonian Geological Survey were used as alternative datasource for peat and oilshale production estimations.

Estonian Geological Survey (EGS) deals with management of Estonian mineral resources: EGS explore all mineral resources available in Estonia, issues an exploration permits and the permits for extraction of minerals. Permits are issued separately for each deposit and quarry inside the deposit. Companies having excavation permits have obligation of reporting quantities in mass units of excavated minerals to Estonian Geological Survey, who compiles the statistics on mineral resources excavation. Data in the databases of Estonian Geological Survey are arranged as balance sheets by deposits and quarries including stock at the beginning of the year, changes during the year by cause (recalculations, reclassifications, excavation by mining companies, losses) and stock at the end of the year.

2.2.3.7. Business register

For the PEFA basic data available in business register were used in order to identify the secondary activities of enterprises.

Data from Business register were used to gather extra information about companies’ activities. In the Business register it is possible to investigate companies’ annual fiscal reports (MAAR). For some cases it was helpful to see the enterprises’ detailed activity description, sales revenue etc.

3. Compilation of the PEFA

This chapter describes at first the compilation of the background tables, first results and the research and calculations for the compilation of the final PEFA by energy products.

As the aim of the current project was to compile Estonian PEFA with the help of the PEFA builder the IEA/Eurostat Annual Energy Statistics Questionnaires made up the basis for the Estonia’s account for 2014. However due to encountered problems several adaptations were made: some changes were made to the IEA questionnaires that feed to the PEFA, some changes were made in PEFA builder and some calculations were made manually and added to the PEFA tables subsequently. Respective methods are described in following chapters. First results of this project are not displayed but just the final PEFA is presented. Sophisticated calculations were made in order to compile the PEFA for 2014 but in the future it is desirable to find higher compliance between IEA and PEFA.

In PEFA Questionnaire Tables A and B were filled in with the help of PEFA Builder and supplemented with additional data. Tables B.1 and B.2 were left empty in this project as there are no sufficient data to do the separation between the transformation use and end use on that detailed level. Tables C, D and E were produced automatically by PEFA Builder.

Detailed supply and use tables are shown in ANNEX 6 Tables 5 and 6. Methods are described in following subchapters.

Table C of PEFA Questionnaire (“Physical use table of emission-relevant use of energy flows”) was compiled by aid of PEFA Builder. No changes were made in this table manually afterwards, though some data in this table are causing the concerns. For example the emission-relevant use of heating and other gasoil exceeded little bit of total use of this energy product. At the same time the emission-relevant use of natural gas and motor spirits seemed too low – about 50% of total use. Further analyze and if needed updating of the physical use table of emission-relevant use of energy flows will be done in next project. The comparison of Table B (Physical use table of energy flows) and Table C (Physical use table of emission- relevant use of energy flows) is presented in the ANNEX 7.

Detailed table D provides the main energy indicators for Estonia. For example the net domestic energy use in Estonia in 2014 was 240 274 TJ. The main energy indicators provide the basis of future analyzes of energy efficiency on Estonia’s economy; the detailed breakdown by economic activities enables us to analyze energy efficiency and emission intensities on detailed economic activity level in the future.

On a more detailed level background and methodology is described for the energy products which needed extra work. These were energy products which were either out of the scope of energy statistics and therefore not indicated in IEA/Eurostat Annual Questionnaires or which were not allocated correctly by PEFA Builder. There were several features that PEFA Builder did not consider and thus the results were incorrect at first. Therefore for some energy products the calculations were made manually and results were added afterwards to the PEFA

Questionnaire also manually (e.g. shale oil). For wood, wood waste and other solid biomass; peat; peat products and excavation of oil shale the calculations were made manually but the PEFA Builder was changed based on the new calculations (changing and adding sectors and percentages in PEFA Builder worksheet “See PEFA definitions”), so the correct results came through PEFA Builder. Also there are some energy products which cannot be calculated at first with PEFA Builder because these products were not included in Estonia’s energy statistics and therefore are not showed in IEA/Eurostat Annual Questionnaires (e.g. heat pumps and solar). For these products the calculations were done manually and afterwards added to IEA/Eurostat Annual Questionnaires.

3.1. Compilation of background tables for PEFA

Due to the fact that the energy statistics’ survey sample is not representative on the level of NACE breakdown needed for PEFA it was necessary to use additional indirect data sources for some energy products and for households as follows:

 Lubricants – a proportion distribution of a number of vehicles on level of economic activities (A 64). Information was derived from administrative data of Vehicles Register.

 Solid biofuels – a proportion of CO2 emission from biofuels on the level of economic activities (A 64). Data from Air emission account 2014.  Gasoline and diesel – last available proportion of SUT’s expenditures on fuels on the level of economic activities (A 64) 2012.  Households (except products mentioned above) – data from energy balance 2014.

The NACE breakdown tables were filled in as follows:

 Tables 1-7 (Industry detailing energy and non-energy use) – energy statistics survey basic data and for lubricants, gasoline, diesel and solid biofuels the additional data sources listed above.  Tables 8-10 (Non-energy use of coal products) – we decided to leave these tables empty due to the fact that we do not have information and data what we should indicate there. In the future it is possible to indicate the non-energy use of oil shale there if we have sufficient data about it.  Tables 11, 12, 14, 15 (Industry detailing energy and non-energy use) – energy statistics survey basic data and for lubricants, gasoline, diesel and solid biofuels the additional data sources listed above.  Table 13 (Energy and non-energy use in Transport sector) – filled in with data about gasoline, diesel and lubricants from additional data sources listed above.  Table 16 (Road) – filled in with data about gasoline, diesel (only for land transport) and lubricants from additional data sources listed above.

There are advantages and disadvantages of using monetary data for gasoline and diesel use. The advantages of using monetary data on expenditures on fuels are:

 Data are on the same NACE level as needed for PEFA  Data are in compliance with National Accounts  The same approach is used for Air Emission Accounts and Environmental Taxes Account  Division keys were already available

Disadvantages of using monetary data:

 SUT tables for 2014 were not available yet  SUT 2012 were used as proxy but is old  Data should be revised twice in line with the revisions in NA before the final results

On a seminar with international and national experts there was discussed the issue of using old SUT data to make distribution keys. It was decided that it is not essential to adjust SUT data because SUT distribution keys are not subject of the change from year to year and are used only for filling in NACE breakdown tables with gasoline and diesel data. Therefore the disadvantages of using monetary data considered not to be relevant anymore.

Transport fuel use data for compiling PEFA were taken from Air Emission Account where these were calculated based on SUT data already. Detailed transport data is needed for PEFA to make distinction between transport type (water-, air- and road transport) in detailed level, energy products used and residents – non-residents principle. Residents and non-residents information is also divided into two: EU countries and non-EU countries.

Adjustments for residential principles were made with cooperation of Air Emission Accounts and Environmental Taxes accounts.

Expenditures recorded in national accounts for purchase of fuel for road transport (gasoline and diesel fuel) made abroad (expenditures for import of fuel) were used as basis for estimations of quantity of fuels used by residents’ enterprises abroad. Data about expenditures for transport made by residents during their holiday trips, visiting friends or relatives and other trips abroad (except trips organized by tourist agencies) were used as basis for estimations of fuel used for road transport of households. In order to calculate the quantities of gasoline and diesel fuel used abroad, the prices of respective fuels from environmental taxes accounts were used.

Quantities of fuel used abroad by shipping were calculated in two parts. Expenditures for purchase of fuel made abroad from National Account and fuel prices from environmental Taxes accounts made up the first component. Fuel used by international maritime navigation was divided between residents and non-residents based on energy statistics data and resident part was considered as use of fuel by shipping abroad.

Estimations of air emissions from aviation of residents abroad were based on National Account data. Expenditures for purchase of fuel made abroad and prices of aviation fuels from environmental taxes accounts were used for estimations.

Adjustments to the residential principle for fuel use in road transport by non-residents were made based on tourism satellite account in cooperation with colleagues dealing with environmental taxes accounts and National Accounts. Non-residents’ fuel excise duty on motor fuels was estimated to be 9% of households’ excise duty on motor fuels. Total household fuel used for road transport was divided in two parts: 91% were appointed to households and the rest 9% were appointed to non-residents in national territory. Adjustments to the residential principle for aviation were based on data of Estonian Environmental Agency indicating separately emissions from Landing and Take-Off cycle (LTO) of international and domestic flights and cruise of international and domestic flights. Quantities of used fuel were calculated emission factors of aviation fuels from Estonian Informative Inventory Report submitted under the Convention on Long-Range Transboundary Air Pollution. Adjustments to the fuel used in shipping by non-residents were made based on energy statistics data.

Adjustments to the residential principle for rail transport were not made as locomotives do not cross the state boarders and foreign locomotives do not enter the Estonian territory also

Described above methodology do not allow splitting usage of fuel abroad by residents and usage of fuel in country by non-residents between EU and non-EU countries. Keeping in mind, that PEFA Builder summarizes the fuel usage of residents in EU and non-EU countries and fuel usage of non-residents from EU and non-EU countries as well into one number, the split between these two categories was done 50-50%.

During the project there were held several consultations with national experts from whom it was possible to get extra knowledge and background information. The methodology for calculation of different energy products was developed together with experts who gave suggestions and also checked the results. Following data sources were received from experts:

 Methodology to calculate the energy amount obtained with heat pumps  Relevant waste reports  GHG emission reports

3.2. First results

After running the PEFA Builder for the first time and forming of the PEFA Questionnaire tables a big statistical difference (ca 15%) occurred between supply and use tables for the energy product P09 (Brown coal and peat). This statistical difference came up with oil shale production. For the regarding the use of shale oil, PEFA Builder gave a negative values for two energy products. These issues were dealt in depth and are described in detailed in chapter 3.4.2

Another problem which occurred was that PEFA Builder allocated some products to other economic categories than Estonian energy statistics and National Accounts. These cases are described in following chapters. PEFA Builder did not display more visible errors.

However in some cases Estonian energy statistics is not as detailed as required for PEFA, so some additional work has to be done. After having the first results it became clear which topics needed further research and work in this project:

 Supply and use of oil shale and its products  Supply and use of wood, wood waste and other solid biomass  Supply and use of peat and peat products  Renewables which were not covered by Estonia’s energy statistics (solar, geothermal)  More detailed analyze of use of waste as energy source  Import-export of energy materials  Other possible energy flows outside of the scope of energy statistics  Allocation of secondary activities regarding heat and electricity production

Next chapter describes in detail the energy products which needed more research and development of calculation methods.

3.3. Energy products which needed extra effort for the compilation of the PEFA

In the following table there are listed the energy products which are relevant for Estonia. Also there are brought out whether it was possible to use directly the IEA/Eurostat Annual Questionnaires data or some extra work had to be done.

Table 18. Energy products in PEFA and their availability in IEA/Eurostat Annual Questionnaires

Energy product/form of energy Status according to IEA/Eurostat Annual questionnaires Hydro based energy Ok Wind based energy Ok Solar based energy Not reported in Annual questionnaires Geothermal energy Not reported in Annual questionnaires Hard coal Ok Oil shale Needed extra calculations Shale oil (other hydrocarbons) Needed extra calculations Peat Needed extra calculations Peat products Needed extra calculations Derived gases Ok Coke Ok Natural gas Ok

Motor spirit Ok Kerosene and jet fuel Ok Transport diesel Ok Heating and other gasoil Needed extra analyzes Residual fuel oil Needed extra analyzes Refinery gas, ethane and LPG Ok Other petroleum products Ok Wood, wood waste and other solid biomass Needed extra calculations Biogas Ok Heat Needed extra calculations Electricity Needed extra calculations

3.4. Oil shale and the compilation of PEFA for oil shale

3.4.1. Overview

Following sub-chapters gives an overview of oil shale characteristics, excavation and use, also a short overview of oil shale in energy statistics.

3.4.1.1. General characteristics of oil shale

Oil shale is a rock that comprises so much organic matter that it can be utilized as a fuel and as a raw material for processing into shale oil. It is usually classified as a fine-grained sedimentary rock which contains organic matter – kerogen. There are two kinds of oil shale in Estonia:

 Dictyonema shale (graptolitic argillite) – due to low calorific value (4.2 – 6.7 MJ/kg) not used for energy production yet  Kukersite (Estonian oil shale) – used for electricity production and shale oil production

The composition of Estonian oil shale is not consistent; it depends on the ratio of the organic, carbonate and terrigenous parts. This ratio can significantly fluctuate in different deposits and seams. The content of organic matter in kukersite varies by layer and area from 15% to 55%. The average composition of kukersite is:

 Organic matter (kerogen) – 30%  Mineral matter – 70%, incl. o Sandy-clay part – 25% o Carbonate part – 45%

The average calorific value of kukersite is about 8 MJ/kg. In 2014, approximately 82% of electricity in Estonia was produced from oil shale. (Kearns & Tuohy, 2015; Aaloe et al., 2007; Koel, 1999)

3.4.1.2. Excavation of oil shale

The oil shale bed is not homogenous, but has a complicated structure and consists of oil-shale layers of different quality that lie alternately with limestone interlayers. Estonian Geological Service (EGS) is keeping detailed records about oil shale as a natural resource. Data are arranged as balance sheets by deposits and quarries including stock at the beginning of the year, changes during the year by cause (recalculations, reclassifications, excavation by mining companies, losses) and stock at the end of the year. EGS also issues the permits for excavation of oil shale and collects reports from companies with permits about quantities of excavated oil shale.

The estimation of oil shale resources is based on the energy rating of productive seams. Stock of oil shale in EGS balance sheet is recorded as carrying oil shale – estimated quantity of “pure oil shale” including only limestone layers less than 5 cm thick. Companies with extraction permits report to EGS the quantity of their excavated oil shale as carrying oil shale. EGS estimates the technological losses connected to excavation: as average 30% for underground mines and 10% for quarries. In 2014, five oil shale mines were in operation; three open-pit mines (quarries) and two underground mines.

Statistics Estonia collects data about oil shale excavation even by two different surveys: production statistics (produced and sold oil shale) and energy statistics (where excavation equals to use), the latter is presented in a format of oil shale balance sheets also. Excavation of trade oil shale – raw oil shale containing moisture, inclusions of limestone, sand and clay – is reported to Statistics Estonia. The volume reported to Statistics Estonia is 20–30% bigger than data reported to EGS. For comparison: 14.8 million tonnes of oil shale was excavated according to EGS and 20.9 million tonnes of oil shale was excavated according energy statistics of Statistics Estonia in 2014.

3.4.1.3. Use of oil shale

About 73% of oil shale is used directly for electricity production. Currently, two different technologies are used for oil shale firing in power plants:

1. Pulverized Firing Technology (PFT) – this technology uses oil shale with the lower calorific value and raw oil shale could be used. It has been used for a very long period. Majority of electricity is produced using this technology.

2. Circulating Fluidised Bed Technology (CFBT) – this technology needs oil shale with higher calorific value than is characteristic to the raw oil shale, therefore enrichment of raw oil shale to calorific value 8-11 MJ/kg is done before it is used. This technology is a more advanced one enabling to reduce SO2 emission into the ambient air as sulphur is bound by calcium contained in oil shale.

Oil shale contains a higher ratio of hydrogen to carbon than coals. Due to this feature oil shale heated in the absence of oxygen produces hydrocarbon chains – shale oil. About 20% of oil shale is used for production of shale oil. During the pyrolysis (the process of heating oil shale to the temperature at which kerogen is decomposed in the absence of oxygen) the gas, condensable oil, water containing phenols and a solid residue are generated. Two different types of facilities for pyrolysis of oil shale are used in Estonia:

1. Those in which gas is used as heat carrier. Enrichment of oil shale is needed for this technology; shale oil, phenolic water, generator gas with low calorific value and semi- coke are formed in the process. 2. Those in which circulated solids are used as heat carrier. Lower calorific value oil shale might be used in process. Beside shale oil, regarding energy carriers the gas with high calorific value is formed.

About 2% of Estonian oil shale is used for heat production almost all of which is supplied through combined heat and power generation.

3.4.1.4. Oil shale in energy statistics

As it was explained above, raw oil shale, containing the moisture and waste rock, is indicated in Estonian energy balance. No big problems arise for the balance compiled in mass units – tonnes. At the same time, calculation of energy balance in energy units – TJ – is much more complicated. Calorific values differ even for oil shale excavated in different parts of the same quarry: it depends on the content of kerogen and quantity of included waste rock and water. The adjusted average calorific value of excavated oil shale is used for compiling the balance sheets in energy statistics.

3.4.2. Oil shale in PEFA

As we saw, two kinds of different data about excavation amounts of oil shale exist and are used by different authorities. As data about raw oil shale extraction are used by energy statistics, these data made up also the basis for compilation of PEFA.

In the first PEFA compiled with the use of the PEFA Builder statistical difference of approximately 20 000 TJ occurred between oil shale supply and use (about 15%). As there

36 was balance in mass units in the Coal Questionnaire, this meant, that physical and energy balances do not match in case of oil shale.

The reason for this discrepancy is that the balance in tonnes is compiled for raw oil shale. At the same time, different processes and facilities using oil shale, for example for shale oil production, need oil shale with higher calorific value and enrichment of oil shale has to be made before the use for transformation. (Oil shale enrichment is a process of separating bigger particles of limestone from excavated oil shale). The discrepancy between the mass balance and the energy balance is illustrated by the table below. Data of energy statistics survey 2014 were used for mass balance, calorific values were taken from the Coal Questionnaire.

Table 19. Difference between oil shale balance in physical and energy units

Physical balance, Calorific Energy balance, TJ 1000 tonnes value, Supply Use MJ/t Supply Use Excavation (production) 20 995 7 479 157 023 Used for electricity and heat production 14 762 7 479 110 402 Used as raw material for shale oil production 4 951 10 930 54 110 Used as raw material for production of non- 697 10 930 7 624 energy products Used in cement production 165 8 392 1 388 Change in stock 420 7 479 3 142 Total use 20 995 176 665

The sum of the used oil shale (176 665 TJ) is higher than the supply (157 023 TJ) while calculated on the bases of the calorific values in IEA/Eurostat questionnaire. Several possible solutions to overcome this problem were suggested by our experts:

 To change the oil shale quantities in the IEA/Eurostat Coal Questionnaire subtracting the waste rock from enriched oil shale;  To indicate waste rock removed during enrichment as a loss;  To indicate waste rock removed during enrichment as an energy product with very low calorific value;  To change the calorific values in the IEA/Eurostat Coal Questionnaire while trying to find combination which gives the smallest statistical error in the PEFA table;  To use only one calorific value in the IEA/Eurostat Coal Questionnaire;  To split oil shale into two different products: raw oil shale and enriched oil shale;  Let the IEA/Eurostat Coal Questionnaire without changes and compile oil shale and oil shale products part manually in PEFA.

Each of these solutions had its disadvantages. The problem with oil shale lies already in the structure of the Coal Questionnaire (explained below), which serves as a basis for the PEFA Builder. The next table shows how oil shale is (and according to the IEA handbook logic which refers for coke processing should be) indicated in the Coal Questionnaire.

Table 20. Oil shale in COAL Questionnaire (TJ)

Supply, transformation and end-use sectors (103 tonnes) 2014 Indigenous production 20 995 Stock changes (National territory) -367 Inland consumption (Calculated) 20 628 Statistical differences 0 Transformation sector 20 349 Main activity producer electricity plants 14 577 Main activity producer CHP plants 652 Coke ovens (Transformation) 103 Gas works (Transformation) 1 043 Coal liquefaction plants (Transformation) 3 974 For blended natural gas 0 Energy sector 18 Coal mines 18 Total final consumption 261 Total non-energy use 97 Non-energy use industry/transformation/energy 97 Final energy consumption 164 Industry sector 164 Non-metallic minerals 164 Transport sector 0 Other sectors 0

The problem is, that Coal Questionnaire asks for separate indication of coal (in Estonian case – oil shale) used for coke production (coke ovens), gas production (gas works) and oil production (coal liquefaction plants) supposing that production of coke, gas and oil take place in different plants. In fact, oil, gas and coke are all formed during pyrolysis of shale oil production in the one and same facility.

At present, the quantities of raw oil shale indicated in the Coal Questionnaire as oil shale used in coke ovens, gas works and coal liquefaction plants are calculated as estimations based on quantities of products, calorific values and experts’ opinions made by energy statisticians.

3.4.2.1.Analyses and the results of the suggested solutions

Suggested solutions by experts were tested and analyzed. Quantity of waste rock removed by enrichment was estimated using the difference between quantities of excavated oil shale reported to Estonian Geological Service and Statistics Estonia. This quantity was subtracted from the quantity of oil shale used for oil production. The same statistical error appears in PEFA (this time with a negative value). Changing the quantity in the Coal Questionnaire creates unbalance in tonnes, which was recorded as a statistical error in PEFA. In addition, we don’t know for which value reported in the Coal Questionnaire the subtraction should be made, as all raw oil shale use quantities were estimates already.

The potential solution of the problem with the introduction of the new product – the enriched oil shale or low calorific value waste rock or even both – was left aside during this project.

Introduction of the new product needs the changes in the structure of the Coal Questionnaire introducing new sheets for new products. Changing the structure of the Coal Questionnaire is not in the responsibility of environmental accountans and probably will not be accepted by IEA authorities as oil shale itself is a rare energy product and is not used by other countries in significant amounts. At the same time, the separate indication of raw and enriched oil shale seem to be the most reasonable approach, but finding the technical solution for this approach might be done in further development of PEFA methodology for Estonia.

Changing calorific values in the Coal Questionnaire (at the same time keeping all reported quantities unchanged) in order to minimize statistical error in PEFA was the considered to be the best solution suggested by Estonian energy statistics. Mathematically it was possible to find the combination of calorific values, which minimized statistical error down to 0.5%. But this purely mathematical approach was left aside due to two reasons: 1) solution was not logical, giving smaller calorific value to oil shale used for oil production than used for electricity production; 2) quantities of oil shale use indicated in the Coal Questionnaire are estimates made using estimated calorific values. Changing these quantities just creates more confusion afterwards.

At the beginning of the analyses it seemed obvious that the last option (not to use PEFA Builder) was probably the best solution, therefore the oil shale part for PEFA was done manually. Various datasources: reports of enterprises to energy statistics survey and production statistics, data of Estonian Geological Survey, database of stationary air emissions facilities of Estonian Environment Agency, waste management database of Estonian Environment Agency and in addition publications of Tallinn Technical University concerning oil shale industry and energy sector, environmental impact assessments of shale oil producing companies, The National Development Plan for the Utilization of Oil Shale 2008–2015 and other sources of information, were used.

Manual calculations made it possible to subtract the waste rock for certain processes of the oil shale use (e.g. using the oil shale for shale oil production and in some facilities producing electricity). Calorific values reported to Estonian Environment Agency in the database of stationary air emissions facilities were used in cases when oil shale was used as a fuel and calorific values from environmental impact assessments of shale oil producing companies for oil shale used for production of shale oil.

The average content of waste rock was estimated based on the differences of oil shale excavation data reported to Statistics Estonia and Estonian Geological Survey. It was assumed that waste rock still contained about 8% of oil shale. In addition, losses of oil shale during open quarry excavation and transportation indicated in Estonian Environment Agency in the database of stationary air emissions facilities were added.

Calculating the oil shale balance manually eliminated the big discrepancy between oil shale balance in tonnes and TJ as it is presented in the next table.

Table 21. The estimation of physical and energy balance on the bases of various available information in literature and administrative data

Raw oil Enriched Calorific Energy shale oil shale value content tonnes tonnes MJ/kg TJ Oil shale production Excavation NACE 06+NACE 29+NACE 35 20 892 254 7.48 156 256 Excavation NACE 23 102 900 8.39 864 Excavation total 20 995 154 157 117 Oil shale use Used for electricity production 14 342 325 Of which used as raw oil shale 11 972 840 7.48 89 545 Of which used after enrichment 2 369 485 1 688 275 8.02 13 540 Used for heat production 419 242 298 713 8.02 2 396 Used as material for shale oil production 4 950 591 3 527 332 10.93 38 554 Used as material for chemical industry 697 490 496 967 10.93 5 432 Used as fuel for cement production 165 421 8.39 1 388 Change in stock 420 085 299 314 10.93 3 272 Total use 20 995 154 Additional estimations Waste rock 2 546 292 0 Oil shale included in waste rock 203 703 7.48 1 524 Losses during excavation 142 7.48 1 Losses during storage 44 7.48 0.3 Total 155 651 Difference between supply and use -1 466 -0.9%

In the next steps of this project we intend to give up of the idea of routine manual compilation of oil shale data for PEFA and we are still looking for the better solutions for the routine compilation process in future. The next considerations were behind this decision:

1. Keeping in mind small human resources both in energy and environmental statistics teams, the use of the PEFA Builder would be the best solution for regular compiling of the PEFA. 2. Working out the methodology for compilation of Estonian PEFA with the use of the PEFA Builder was the aim of this project. 3. By the opinion of our energy experts our manual calculations would be still too simplified in order to start basic revision which would satisfy all user aspects of energy statistics and more additional detailed important aspects should be considered. 4. This project is the first attempt to compile PEFA in Estonia and one-year project does not allow the deeper considerations of all details of oil shale industry and oil shale energy use. Environmental accountants do not have enough expertise about oil shale energy aspects for compilation of PEFA yet. 5. Manual calculations would be time consuming and therefore could not be suggested for regular PEFA compilation. 6. Lot of different data sources and literature data were used in the current process. This was normal at the stage of working out of methodology in frame of the current project but not suitable for regular PEFA compilation.

For the sake of the current first estimation on PEFA the simplest solution was chosen. Due to the fact that physical balance is made based on raw oil shale it was decided to change the Coal Questionnaire and use only one calorific value of raw oil shale – 7.58 MJ/kg. Therefore, the enrichment aspect of oil shale was “eliminated” from the production flow and the oil shale flow in energy units was balanced.

This approach did not satisfy the energy statistician’s needs, so these changes on the basis of oil shale calorific values in the Coal Questionnaire were done for Physical Energy Flow Account purposes only. Estonia’s energy statisticians did not change their calculations and the reporting of oil shale data in the IEA questionnaire. As a result, these two accounts are different in case of oil shale.

It was concluded that the work for proper indication of oil shale energy data in statistics should be continued. The solutions, which could be used also for Estonia’s energy balances and therefore ensure the compliance of the energy statistics with the Physical Energy Flow Account, should be worked out in future.

Another problem connected with oil shale in the first version of PEFA was that the PEFA Builder allocated the entire amount of excavated oil shale under the sector B (Mining and quarrying), but in Estonia’s case the sectors C19 (Manufacture of coke and refined petroleum products) and C23 (Manufacture of other non-metallic mineral products) also excavate and use oil shale. This problem was solved inside the PEFA Builder, where the worksheet “See PEFA definitions” was changed. Additional rows were added in order to distribute the supply and use of oil shale into different sectors.

3.4.3. Shale oil in PEFA

Another problems in our first PEFA version were the negative values in the PEFA Questionnaire Table B. For some reason two quantities in sector C19 (Manufacture of coke and refined petroleum products) in categories “Heating and other gasoil” and “Residual fuel oil” were displayed as negative figures.

Tracking the origin of the negative values it was found, that negative values were connected to shale oil. The majority of produced shale oil was exported and there was no problem with the exported quantity in the PEFA. Whereas shale oil used domestically ends up in PEFA table as negative values. The problem is probably based on different classifications of oil shale in the Oil Questionnaire and for supply and use tables by the PEFA Builder.

According to the IEA/Eurostat Oil Questionnaire instructions the production of shale oil should be indicated in the Oil Questionnaire under the category “Other hydrocarbons” as “Receipts from other sources”. For the year 2014 the production of shale oil was 697 thousand metric tons. 603 thousand tonnes was exported (23 738 TJ) and 94 thousand tonnes (3 700 TJ) was used directly in Estonia. The reported net calorific value for these amounts is 39.37 MJ/kg.

The domestically used amount of shale oil is indicated as “Direct use” in the IEA/Eurostat Oil Questionnaire. According to the Oil Questionnaire instructions the quantities reported as “Direct use” have to be also reported in the Table 2a. In the Estonian case the 94 thousand tonnes of domestically used shale oil was split into two: 28 thousand tonnes under the category “Heating and other gas oil” and 66 thousand tonnes under the category “Fuel oil- low Sulphur (<1%)”. The reported net calorific values for these amounts were 42.3 MJ/kg and 39.2 MJ/kg, respectively. At this point 94 thousand tonnes of “Other hydrocarbons” was changed into two products: 28 thousand tonnes of “Heating and other gas oil” and 66 thousand tonnes of “Fuel oil-low Sulphur (<1%)” having different calorific values.

In our opinion, the PEFA Builder takes the values of 28 thousand tonnes and 66 thousand tonnes from Table 2a, converts these into energy units and displays these values in the final PEFA table only on the use side as negative figures (Table B sector C19, products “Heating and other gasoil” -1 184 TJ and “Residual fuel oil” -2 589 TJ) because there is no supply to balance it as there is no intake into refinery but there is refinery output of produced oil in table 2a. There is a contradiction between IEA Questionnaires and PEFA Builder logic in case of secondary shale oil products.

It is important to point out that when the energy product shale oil is transformed into two different products with different calorific values then after conversion into energy units the balance between supply and use would be not correct any more. To resolve this issue it was decided to change the PEFA Questionnaire manually. The net calorific value 39.37 MJ/kg was used for the conversion of all shale oil amounts: 697 thousand tonnes (Receipts from other sources), 603 thousand tonnes (Exports) and 94 thousand tonnes (Direct use) into energy units. The converted value of 697 thousand tonnes (Receipts from other sources) was placed in the Table A under sector C19 as energy product „Crude oil, NGL, and other hydrocarbons (excl. bio)” (27 438 TJ). The converted value of 603 thousand tonnes (Exports) was placed in the Table B as export under the Rest of the world as energy product „Crude oil, NGL, and other hydrocarbons (excl. bio)” (23 738 TJ). It was decided not to split the 94 thousand tonnes (Direct use) into two different energy products with different calorific values. The entire converted amount of 94 thousand tonnes was placed under sector C19 as energy product „Crude oil, NGL, and other hydrocarbons (excl. bio)” in the Table B (3 700 TJ).

These corrections were made manually as this was the simplest way to eliminate the negative values from final PEFA tables. Negative values for products “Heating and other gasoil” and “Residual fuel oil” in table B under sector C19 were deleted. This action resulted in differences between supply and use between total use of natural inputs, products and residuals for the two energy products (“Heating and other gasoil” and “Residual fuel oil”). The differences were exactly the same amounts that were deleted. So it became clear that these amounts have to be subtracted in the use table as well. Subtraction was made from these economic activities where these two energy products were used proportionally to original distribution keys. After this correction was made the balances between supply and use for totals by NACE activities had to be corrected again. Correction of the values in supply table was done in the category energy losses for each economic activity manually as the only option for balancing.

In the next project it is planned to further investigate this problem and possibly find ways to calculate shale oil flow automatically through the PEFA Builder.

3.4.4. Additional problems regarding oil shale in future development of Estonian PEFA compilation methodology

Though it was decided not to compile oil shale flow in PEFA manually, the exercise was useful as it indicated some aspects which would have not been revealed otherwise.

One of these aspects was the use of the energy products generated in the process of shale oil production but not indicated in energy statistics and production statistics. These products (mostly gases generated as by-products) were used in the same facility where they were generated. These are not products in the sense of production statistics and were not reported to energy statistics. As generation and use of these fuels are not included in the IEA/Eurostat Joint Questionnaire, they were also left out from PEFA. At the same time, emissions from the use of these fuels are reported by enterprises to Estonian Environment Agency and included in the Estonian Air Emission Accounts. In this respect there will be an inconsistency between PEFA and Air Emissions Accounts.

Another aspect is proper classification of oil shale derived products in PEFA. PEFA Builder, places the oil shale products in the different categories than we would like to indicate them:

 Oil shale gas – PEFA indicates it under “natural gas”, our opinion is that oil shale gases should be under “derived gases” category.  Oil shale coke – PEFA indicates it under “secondary coal products”. In fact, oil shale coke due to its low calorific value and high content of metals is used exclusively for electrodes, therefore by our opinion it should be indicated under category “energy incorporated in products for non-energy use”. As energy statisticians were not willing to change the data in the Coal Questionnaire and quantity of produced coke was relatively small, this change was not made in PEFA neither.  Shale oil – needs for proper classification of shale oil and its fractions in PEFA (due to negative values) as the production and use in PEFA appear as classified on different classification basis as described in chapter 3.4.3 Shale oil in PEFA.

PEFA Builder allocates these products into the PEFA Questionnaire based on the IEA/Eurostat Annual Questionnaires. It was decided that these issues would be further investigated in the next project in order to find the possible solution to overcome these classification problems.

3.5. Wood, wood waste and other solid biomass

In Estonian case this category includes fuel wood, pellets, briquettes, wood chips, forestry residues, wood industry residues, straw, rape residues, bone meal, grease (animal by-products or waste) and black liquor.

After analyzing the first results of PEFA (made by PEFA Builder automatically) we decided to compile biomass flow manually. The reason to calculate it manually was that PEFA Builder allocates the biomass flow in other economic activities than it should be in Estonian case (this allocation can be seen in Annex tables 2 and 3 in ANNEX 4). For supply side PEFA Builder assumes that biggest amount of biomass comes from sector A02 (Forestry) but in Estonian case the biggest amount of biomass production comes from sector C16 (Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials). Also there are several small variations in other economic activities. Therefore it was decided to calculate the biomass balance manually and based on these calculations to change the PEFA Builder (changing and adding sectors and percentages in PEFA Builder worksheet “See PEFA definitions”). Thus after these changes the correct biomass flow came automatically from PEFA Builder. In next sub-chapters there are described how the supply and use side was calculated.

3.5.1. Supply side

Energy statistics uses specific coefficients to transform energy statistics survey basic data 3 units to cubic meters (solid). The coefficient for fuel wood (m stacked) is 0.7 and for wood 3 chips and wood residues (m loose) the coefficient is 0.4.

The fuel wood estimations regarding total amounts were available from energy statistics. The methodology for the distribution between Forestry and Households is described below in sub- chapter 3.5.1.1. For wood chips and wood industry residues the coefficient (0.4) was not used in production side. For wood chips and wood industry residues the production volume was taken from energy balance and proportionally divided into sectors based on basic data. For forestry residues (loose) the coefficient 0.4 was used to transform basic data into cubic meters of solid volume.

For transition from cubic meters solid to energy units there was used assumption that 1 m³solid=7.2 GJ. For pellets and briquettes there was used specified calorific values based on Estonia’s energy balance – pellets 16.92 MJ/kg and briquettes 16.65 MJ/kg. For “other biomass” (straw, black liquor, rape residues, bone meal, grease) there was used the same calorific value that is used in energy statistics - 14 MJ/kg. However, the expert opinion was that for straw it is better to use calorific value 12.4 MJ/kg which is more accurate.

Also because the amount of black liquor is bigger than the rest of "other biomass" (rape residues, bone meal, grease), then the calorific value 14 MJ/kg seemed over estimated. For

44 black liquor there was used calorific value of 7.85 MJ/kg because this was the three year average of one paper manufacturing company. Using this option the calculated "other biomass" amount in energy units (TJ) is approximately the same as in Estonian energy balance: PEFA team calculation – 1 493 TJ, energy balance – 1 473 TJ.

To illustrate the supply of biomass in Estonia the shares of produced wood, wood waste and other solid biomass in 2014 is shown in next figure and detailed figures are presented in Annex Table 2. Supply of wood, wood waste and other solid biomass by sectors.

Figure 4. The production of wood, wood waste and other solid biomass in Estonia in 2014

Briquettes Black liquorOther 3% Wood 1% 0% industry residues 16% Fuel wood 27%

Chipped wood 26% Pellets 27%

Biggest production item was pellets – 12 930 TJ. On the second place there is fuel wood production with 12 636 TJ. The category “other” in this figure contains forestry residues, straw, rape residues, bone meal and grease (animal waste) – 92 TJ.

Following figure illustrates the supply of wood, wood waste and other solid biomass by economic activities (%).

Figure 5. Supply of wood, wood waste and other solid biomass by economic sectors in Estonia in 2014 (%)

Households Import Other C31_C32 8% 3% 1% 1% C17 A02 3% 18%

C16 66%

As shown in the Figure 5, the majority of wood, wood waste and other solid biomass production comes from sector C 16 (Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials). Category “other” includes following sectors: A01, B08, C10-C12, C22, C23, C25, C27, C30, D, E37-E39, F, G46, G47, H49, L, O, P and S96.

3.5.1.1.Production of fuel wood

The data for dividing fuel wood production into Forestry and Households sectors is taken from Forest Yearbook 2014. According to National Forestry Inventory the forest area in 2014 was 2 273 700 ha. From which the state forest was 1 005 176 ha (44%) and privately owned forests 1 091 455 ha (48%). For the rest of 8% the ownership of forest land is unknown. From the private forests 745 350 ha (68%) is owned by physical persons.

The amount of fuel wood which has to be divided between Forestry and Households sectors is 3 1 748 021 m solid. Based on the data which is available on forest lands the following presumptions were made. Firstly, due to the fact that 48% of forest land is privately owned, it can be assumed that the estimated amount of fuel wood from private forests would be 839 111 3 m solid. Second presumption was that due to the fact that 68% of private forest is owned by physical persons, the estimated amount of fuel wood from private forests owned by physical 3 persons is 573 025 m solid, it was assumed that this is the production from Households. 3 Therefore the Forestry sector production amount would be 1 174 996 m solid.

3.5.2. Use side

In the use side the energy statistics coefficients are used for fuel wood, forestry and wood industry residues and for wood chips. The transformation from cubic meters to energy units (TJ) and calorific values are the same as in supply side. The difference between supply and use side is shown as "changes in inventories".

To illustrate the use of biomass in Estonia the consumption of wood, wood waste and other solid biomass is shown in next figure.

Figure 6. The use of wood, wood waste and other solid biomass in Estonia in 2014

Briquettes Black liquor Other 1% 3% 0% Wood industry residues 7%

Fuel wood 34% Chipped wood 25%

Pellets Forestry 29% residues 1%

Biggest consumption item is fuel wood (on the use side fuel wood use consists also some quantities of other biomass as well) – 16 440 TJ. On the second place there are pellets with 13 633 TJ. The category “other” in this figure contain straw, rape residues, bone meal and grease (animal waste) – 104 TJ. Following figure illustrates the supply of wood, wood waste and other solid biomass by economic activities (%) based on energy statistics.

Figure 7. Use of wood, wood waste and other solid biomass by economic sectors in Estonia in 2014 (%)

Other C17 2% 3%

C16 C31_C32 7% 1%

Export 31% D 24%

Accumulation 1% Households 31%

As shown in the Figure 7, the majority of wood, wood waste and other solid biomass is used in Households (15 553 TJ) and for export (14 790 TJ). Category “other” includes following sectors: A01, A02, A03, B08, C10-C12, C13-C15, C20, C22, C23, C24, C25, C27, C28, C29,

C30, C33, E36, E37-E39, F, G45, G46, G47, H49, H52, H53, I, K64, L, M71, N77, N80-N82, O, P, Q86, Q87_Q88, R90-R92, R93, S96. Results obtained by these calculations were compared with PEFA Builder initial results. NACE Breakdown distribution key was based on NA biomass use distribution key which is the same as used for the compilation of the Air Emission Account. There were quite small variations between the allocation to the economic activities which is a good result showing that PEFA is in compliance with NA. PEFA Builder calculation rules (PEFA definitions) were not changed regarding the use side data (based on manually made calculations) due to the fact that after comparison of manually made calculations (based on energ) vs. PEFA Builder calculations, the difference was not large.

3.6. Peat and peat products

In Estonia peat is excavated for energy purposes and for agriculture. The non-energy use of peat is not included into Physical Energy Flow Account. For energy purposes there is excavated well decomposed peat from which there are produced milled and sod peat. There are also produced peat briquettes which are with higher calorific value than milled and sod peat.

After analyzing the first results of PEFA (made by PEFA Builder automatically) we decided to compile biomass flow manually. The reason to calculate it manually is that PEFA Builder allocates the production and use of peat and peat briquettes in different sectors than it should be in Estonian case. PEFA Builder allocates the extraction of peat into sector B (Mining and quarrying) but in Estonian case the extraction also comes from sector F (Construction). Also a big difference is for peat briquettes – PEFA Builder allocates the production under sector C19 (Manufacture of coke and refined petroleum products) but in Estonian case the production comes from sector B (Mining and quarrying). Therefore the usage of milled and sod peat is also incorrect in PEFA Builder. Therefore it was decided to calculate the peat balance manually and based on these calculations change the PEFA Builder (changing sectors and percentages in PEFA Builder worksheet “See PEFA definitions”). Thus the correct peat flow came automatically from PEFA Builder.

The data about peat in various production steps comes from different data sources: the Estonian Land Board, energy statistics survey basic data, energy balance, enterprises, National Accounts and expert opinion. Amount of extracted peat is taken from the Estonian Land Board. To the extracted amount there were also included the used stock amount in 2014. This is the amount of peat which was extracted before 2014 and stored (data from energy statistics survey basic data). Calorific value of extracted peat is 10.215 MJ/kg, which is the weighted average from IEA/Eurostat Coal Questionnaire.

Supply side data originally comes from energy statistics survey basic data. Calorific value for milled and sod peat is the same as for extracted peat (10.215 MJ/kg). Calorific value for briquettes is 16.4 MJ/kg.

Use side data firstly came from energy statistics survey basic data and the same calorific values were used as in previous steps. However for the value for the export of peat briquettes the values indicated in energy balance (based on foreign trade and PRODCOM statistics) were used. The difference between supply and use is shown under "changes in inventories" (shown in ANNEX 5 Supply and use of peat and peat products by sectors in Estonia in 2014).

In order to calculate the losses there was used a study (master's thesis) about the health risks of extraction and usage of peat. In this thesis it was investigated that 0.87 g/s of peat dust volatilize when loading 10 t of peat in 15 minutes. So we applied this information on every step of peat production. However this method gave quite small amount of losses. During the consultation with expert it became clear that losses are significantly underestimated. So we decided to contact with companies who extracts peat and produces products from it. Based on the consultations with enterprises and energy expert the decision was made that approximately 12% of extracted peat goes lost during the process. However it was difficult to integrate the losses in PEFA. In future the attempt of the indication of the losses into Coal Questionnaire will be made.

The supply of peat and peat products was divided between two sectors B (Mining and quarrying) and F (Construction), as 99% (3 657 TJ) and 1 % (29 TJ) respectively. The use of peat and peat products are even more scattered between sectors as can be seen in following figure 8.

Figure 8. Use of peat and peat products, 2014

Other A01 0% 0%

Stock 10% B 34% Export 22%

N80_82 1%

C10_12 Households D 1% 5% 27%

3.7. Waste for energy production

3.7.1. Overview

Waste became the considerable energy source in Estonia since a municipal waste incineration plant with high capacity started to operate in 2012 and some RDF (refuse derived fuel) facilities have been launched to prepare solid fuel for cement factory. There are several different sources of information concerning quantity of incinerated waste, which in fact, are not always in compliance with each other.

In Estonian energy statistics and Eurostat/IEA questionnaires all incinerated wastes are indicated as municipal waste non-renewable. Waste Management Data System provides detailed information on waste amounts and categories according to European List of Waste (LoW), treated with treatment category “Incineration with energy recovery”, but this source does not provide information about calorific value of incinerated wastes (Estonian Waste Data Management System, 2016). Reports of enterprises for Estonian Greenhouse Gas Emissions Trading Registry managed by Ministry of Environment includes detailed information about composition, quantities and calorific values of incinerated wastes, but not all enterprises who incinerates wastes are included to this register. National Point Sources Air Emission Database contains information about the use of a waste as fuel as well, but quantities do not match energy statistics data.

PEFA asks distinction between municipal and industrial wastes and for both waste types the distinction between renewable and non-renewable part as is indicated on scheme below (figure 9).

Figure 9. Waste distribution and allocation based on PEFA regulations

It is seen that for PEFA purposes more detail indication of incinerated waste by types of waste should be done, then it could be obtained from energy statistics:

1. Renewable part of burned municipal waste has to be estimated; 2. Incineration of industrial waste has to be investigated in more details.

3.7.2. Compilation of PEFA

According to the PEFA definitions renewable municipal wastes are municipal waste produced by households, industry, hospitals and tertiary sector which are biological material collected by local authorities and incinerated at specific installations. Industrial wastes (use) are allocated in various places in PEFA. Industrial waste of non-renewable origin (solids or liquids) combusted directly for the production of electricity and/or heat are shown under category “non-renewable waste” along with non-renewable municipal waste. Renewable industrial waste should be reported in the categories “wood, wood waste and other solid 51 biomass, charcoal”, “biogases” and/or “liquid biofuels”. Three last categories include production of these products from other sources also (not only from industrial wastes).

Wood wastes are indicated in Estonia’s energy statistics as renewable industrial wastes. Biogases and liquid biofuels have been just partially reflected in energy statistics up to present but have to be included in future.

Due to the fact that Estonia’s energy statistics allocates all wastes under category “municipal waste – non-renewable”, it was important to make more detailed distribution of wastes for PEFA. The waste amount from Estonia’s energy balances needed to be divided into three: at first distribution between industrial and municipal waste and then municipal waste distribution into categories renewable and non-renewable.

There are only few enterprises in Estonia who incinerates wastes as fuel (except non-polluted wood wastes, which are indicated in energy statistics separately and discussed in this report under renewable together with biomass). To get more familiar with problems connected to incineration of wastes, a consultation was held with Estonian waste expert and highly competent environmental manager of one big company using different types of waste as energy source.

This company uses three types of waste fuels with different calorific values (NCV):

 Oil waste based liquid waste fuel – 23.13 MJ/kg  RDF with waste plastics – 15.92 MJ/kg (this category also includes renewable wastes)  Other solid fossil waste fuel – 21.86 MJ/kg

The category “other solid fossil waste fuel” originates from industrial wastes according to the experts explanations. Also it can be assumed that the category “oil waste based liquid waste fuel” originates from industrial wastes. There is a small percentage of “oil waste based liquid waste fuel” which originates according to LoW from municipal wastes, collected from households, but it is impossible to make the principal difference between municipal and industrial in this case, so it would be wise to indicate the entire amount as industrial waste. The category “RDF with waste plastics” originates from both – municipal and industrial wastes. Bigger part comes from municipal wastes, so it was decided that the distribution key would be 90-10, respectively municipal and industrial. Municipal waste distribution into renewable and non-renewable wastes are made based on distribution key 50-50 (used for except for the single biggest waste incineration plant, see below), because it was indicated as the average of the European countries of many years. For the RDF with waste plastics, the calorific value – 15.92 MJ/kg – was used for both cases: renewable wastes and non-renewable wastes.

Taking into account all the previously explained information, calculations were made to distribute the wastes according to PEFA definitions. Due to the fact that we received detailed information about one company, the calculations at first were made for this company and rest of the incinerated wastes in Estonia remained as municipal waste. The distribution key to make the difference between renewable and non-renewable waste was taken from SEI Tallinn

52 and Tallinn University of Technology joint research of waste composition for Estonia’s biggest waste incineration plant (TUT/SEI Tallinn, 2015). The division was made as follows: renewable waste – 65.1% and non-renewable waste – 34.9%. The calorific values for different fractions came from the same research: renewable waste – 6.64 MJ/kg and non-renewable waste – 15.1 MJ/kg. The results of the calculations can be seen in following table.

Table 22. Waste fuel in Estonia in 2014, TJ

Industrial waste Municipal waste TOTAL Renewable Non-renewable Incinerated 574 1 383 1 508 3 466 wastes

The outcomes of these calculations were integrated into IEA/Eurostat Renewables Questionnaire and afterwards into PEFA Builder. Estonia’s energy statistics did not change their reporting and dissemination tables based on the results of PEFA teams’ calculations. The Renewables Questionnaire was changed just for compiling Physical Energy Flow Account only. In the future it is possible that Estonia’s energy statistics also reports the more detailed and relevant higher quality information about wastes but during the 2016 pilot project (regarding 2014 data) these two reporting’s remained different.

The problem of this rather precise calculation method is that it is based on various data sources. For the routine data production in the future it is important to have the continuous homogeneous data flow. Where and how to get the more sustainable data sources is further investigate in the next project.

Production and use of biogases are partially covered in Estonia’s energy statistics. According to data base of air emission stationary sources bigger quantities of biogas were used in Estonia. The revision of quantities for 2014 – 2016 use of biogas and allocation into economic activities and the inclusion of respective data to the IEA/Eurostat Renewables Questionnaire and into PEFA will be discussed in the next phase of developing of Estonian PEFA.

3.8. Electricity and Heat

PEFA Builder appoints all electricity and heat supply under the economic activity NACE 35. In Estonian case production of electricity and heat occur in other NACE categories also. Therefore electricity and heat indicated in PEFA supply table created by PEFA Builder was divided between different economic activities using division keys for electricity and for heat production by NACE categories.

Data collected by Statistics Estonia on production of electricity and heat were used as bases for creation of these division keys (A 64). Statistical survey on production of electricity and heat is sample survey and grossing up is made only on much aggregated economic activities level. Data collected by statistical survey (without grossing up) were compared with database

53 of stationary air emission sources of Estonian Environment Agency. Facilities with SNAP codes referring to “Public electricity and heat production”, “Combustion plants Commercial/institutional: Stationary” and “Combustion plants Residential: Stationary” were chosen from stationary sources database and list of operators of these facilities were compared with list of enterprises responded to statistical survey. Data of enterprises not included to statistical survey on production of electricity and heat but being present in database of stationary air emission sources were extracted from database of stationary air emission sources.

Database of stationary air emission sources of Estonian Environment Agency contained data about quantity of fuel (together with calorific values of fuels) used by facilities, but not quantity of produced electricity or heat. Quantity of heat and electricity production was estimated using calorific values of fuels indicated in stationary sources databases and average fuel efficiencies from literature.

Electricity and heat production estimates on single enterprise level based on stationary sources data were added to the database of statistical survey on production of electricity and heat. Share of particular economic activity in total production of electricity and/or heat was used as a division key.

Division keys for electricity and heat production are presented in Tables 23 and 24. The division keys where integrated into the PEFA Builder by changing the worksheet DEFINITON in the PEFA Builder. For all the energy products which were used for electricity and heat production according to the IEA Annual Electricity and Heat Questionnaire the existing percentages where changed and additional lines added (existing information copied and NACE activity codes and percentages changed) in the PEFA Builder DEFINITION worksheet with the NACE activity codes and percentages presented in the Tables 23 and 24.

Table 23. Division key for electricity production.

n NACE Produced electricity (MWh) Share (%)

1 A01 9760 0,00082 2 C17 29 513 0,00247 3 C19 38 853 0,00326 4 C30 12 788 0,00107 5 D 11 835 803 0,99213 6 E37-E39 2408 0,00020 7 F 224 0,00002 8 L 315 0,00003 TOTAL 11 929 664 1

Table 24. Division key for heat production.

n NACE Produced Heat (MWh) Share (%)

1 A01 105 295 0,009198 2 A02 1759 0,000154

3 A03 40 0,000003 4 B 118 255 0,010330 5 C10-C12 384 235 0,033565 6 C13-C15 36 089 0,003153 7 C16 860 669 0,075183 8 C17 525 927 0,045942 9 C18 11 926 0,001042 10 C19 1 153 683 0,100780 11 C20 19 165 0,001674 12 C21 2 640 0,000231 13 C22 21 679 0,001894 14 C23 1 002 329 0,087558 15 C24 18 226 0,001592 16 C25 28 878 0,002523 17 C26 12 967 0,001133 18 C27 8 456 0,000739 19 C28 15 277 0,001335 20 C29 15 194 0,001327 21 C30 1724 0,000151 22 C31_C32 71 777 0,006270 23 C33 5651 0,000494 24 D 5 891 483 0,514648 25 E36 17 769 0,001552 26 E37-E39 53 341 0,004660 27 F 57 246 0,005001 28 G45 17 604 0,001538 29 G46 39 474 0,003448 30 G47 24 554 0,002145 31 H49 14 899 0,001301 32 H50 308 0,000027 33 H52 407 675 0,035612 34 H53 2003 0,000175 35 I 32 424 0,002832 36 J59_J60 2069 0,000181 37 J61 730 0,000064 38 J62_J63 622 0,000054 39 K64 1311 0,000114 40 K65 206 0,000018 41 L 212 537 0,018566 42 M69_M70 25 949 0,002267 43 M71 1400 0,000122 44 M72 1136 0,000099 45 M73 66 0,000006 46 M74_M75 117 0,000010 47 N77 5657 0,000494 48 N80-N82 24 310 0,002124 49 O 79 753 0,006967 50 P 48 022 0,004195 51 Q86 11 116 0,000971 52 Q87_Q88 6578 0,000575 53 R90-R92 8361 0,000730 54 R93 8291 0,000724 55 S94 3151 0,000275

56 S96 25 593 0,002236 TOTAL 11 447 596 1,000000

It was seen, that heat as secondary and/or auxiliary production was produced in the majority of NACE categories.

3.9. Heat pumps – geothermal energy

Heat production from heat pumps is not covered by Estonia’s energy statistics in IEA/Eurostat Annual Questionnaires mainly because energy statistics had to indicate only heat which has been sold to third parties. However Physical Energy Flow Account has to include the heat production from heat pumps as well. Heat pumps production is calculated in Estonia by an expert from Department of Thermal Engineering in Tallinn University of Technology and transmitted to Eurostat tool called Short Assessment of Renewable Energy Sources (SHARES) (Soosaar, 2015). The calculations were made using statistics collected by the Estonian Heat Pumps Association (Estonian Heat Pumps Association, 2016). The output of heat pumps into PEFA comes from the same calculations. In 2014 the estimated usable energy volume from heat pumps was 872.09 GWh (3140 TJ). The natural input in PEFA was indicated as geothermal heat. However there was a problem with the allocation of supply and use, specifically, into which sector this production and consumption should be allocated. The expert opinion was that so far when we do not have more reliable information on this topic, the distribution may be done between households and industry by using distribution key 50- 50. It was decided that the industry part are divided proportionally into economic activities based on number of employees in each sector. The output of heat pumps was integrated into Renewables Questionnaire. Based on the division keys the PEFA Builder was changed (worksheet “See PEFA definitions”). The supply and use of heat from heat pumps were divided into economic activities based on the same distribution keys, therefore the outcome of supply and use is the same (it is illustrated in the next figure).

Figure 10. Supply and use of heat from heat pumps by sectors, 2014

A B 2% 0% D E 1% F C 0% 5% 9%

G H 6% 4% Households I 50% 2% J 2% K O L1% 4% M 1% P N 2% Q S R 4% 2% 1% 1%3%

3.10. Solar energy

The production of heat and electricity from solar energy is not covered by Estonia’s energy statistics at present. For solar energy it is still complicated to get data about production volumes. Data are available only for this amount of electricity for which production companies and households have got subsidies. In 2014 solar energy subsidies was given for 524 MWh (1.9 TJ). There were 175 electricity producers who got these subsidies, most of them micro producers.

It was decided that solar energy supply and use will be not covered in this project due to the fact there are no sufficient data sources. This topic needs further investigation in the next project and then will be covered in PEFA for the first reporting for regulation in 2017.

3.11. Energy products from oil wastes

In Estonia there are some companies which collect different types of oil wastes (can be seen in Table 23 according to European List of Waste (LoW) classification), recycle these wastes, mainly with physic-mechanical methods, and produce energy products out of them. These products are obviously used as additives to petroleum products in their further rectification process or directly as a component of ship fuel. This flow is not captured by Estonia’s energy statistics. The relevant information about these enterprises can be found in waste reports and from fiscal year reports (MAAR). To clarify these companies production a survey was carried out.

Table 25. Different types of oil wastes for recycling in Estonia in 2014

Oil wastes according to LoW Total recyclable amount tonnes Synthetic hydraulic oils 14 Other hydraulic oils 4 Mineral-based non-chlorinated engine, gear and lubricating oils 91 Synthetic engine, gear and lubricating oils 25 Other engine, gear and lubricating oils 289 Mineral-based non-chlorinated insulating and heat transmission oils 19 Other insulating and heat transmission oils 198 Bilge oils from jetty sewers 11 063 Sludges from oil/water separators 3 Oil from oil/water separators 8 Fuel oil and diesel 1 Wastes not otherwise specified 55 Wastes containing oil 25 374 Wastes containing other hazardous substances 2 Oil and concentrates from separation 3 286 TOTAL 40 432

The main elements which were under investigation in the survey were:

 Calorific value of the wastes received  Types of fuels which were produced from wastes  Calorific value of produced energy products  The amount of production  The distribution between domestic use and export

Due to the fact that the responding activity of enterprises was quite low, it was decided that this issue needs more research and work and will be further investigated in the next project.

3.12 . Petrochemical industry

Petrochemical industry is not covered in Estonia’s energy statistics due to the fact that energy statistics does not capture this flow. Only one company is active in this field. This enterprise imports the primary product (raw material), produces energy products out of it and exports it. The domestic consumption is less than 1%. The data about this enterprise came from PRODCOM data. It was decided that this topic will be further investigated in the next project. Also the aspect whether petrochemical industry should be covered in Estonia’s energy statistics or not is a subject of the future discussions in Statistics Estonia. If not, then Physical Energy Flow Account and energy statistics would not be incompliance in this matter, because it was suggested by the experts that petrochemical industry should definitely be covered by PEFA.

4. Compliance with National Accounts

As the ensuring of the compliance of Estonian PEFA with NA was also one of the tasks of this project several measures were taken to ensure the compliance of Estonian PEFA and NA:

1. The main economic activity of enterprises where harmonized with NA. Estonian Energy statistics survey is based on the data of Business Register for statistical purposes kept in Statistics Estonia. The main economic activities of enterprises in this register are based on declarations of enterprises. For purposes of National Account main economic activities were changed sometimes according to activity of main income of enterprise. The main economic activities of enterprises covered by energy statistics survey were compared with main economic activities of these enterprises used by National Accounts and changed if needed. 2. Data used for the compilation of NACE breakdown tables for detailed distribution of energy use by economic activities were in compliance with National Accounts. 3. Use of transport fuels (transport diesel and gasoline) in different economic activities is based on expenditures on transport fuels in National Accounts. 4. In Table A (supply) of PEFA the changes were by changing PEFA builder definition worksheet in order to consider production of energy products by enterprises with other main economic activities than supposed by PEFA Builder (as PEFA Builder allocates the production mainly in one activity which is not the case in Estonia). 5. Adjustments due to residential principle for transport fuels were made based on National Accounts data about expenditures for purchase of fuel abroad and adjustments due to residential principle for fuel use in road transport by non-residents were made based on tourism satellite account and in cooperation with colleagues dealing with environmental taxes accounts and National Accounts.

5. Summary, conclusions, remaining issues and further steps

Project started with the building of the project team in order to bring together existing knowledge in Statistics Estonia and also to involve topic matter experts in Estonia. The cooperation with Belgium Planbureau was initiated as Statistics Estonia compiled PEFA for the first time.

Analyses of the available data, our existing knowledge, shortage of resources in Statistics Estonia and provided methodological materials were the main reasons why the decision was made to use PEFA Builder for compilation of PEFA.

The five IEA/Eurostat Annual Energy Statistics Questionnaires were analyzed and used as a basis to produce Physical Energy Flow Account. Several statistical databases on energy, foreign trade and “PRODCOM” statistics were used. In addition several administrative databases were explored and used (National Point Source Air Emission Database, Waste Data Management System, The Environmental Permits Information System, Reports of enterprises having greenhouse gases emissions permits, The Estonian Motor Vehicle Register of Estonian Road Administration, Database of Estonian Geological Survey, Business register).

Several distribution keys were developed and applied already in the beginning of the project in order to start using the PEFA Builder. PEFA Builder related NACE breakdown tables and transport fuel use tables regarding residential principles were filled in.

First results of this project showed that the structure of the IEA questionnaires and the data filled in regarding Estonia are not detailed enough for PEFA purposes. In order to overcome these shortcomings additional data sources were elaborated to improve our PEFA. In some cases the IEA questionnaires were changed for PEFA purposes, in case of some energy products the PEFA Builder was modified (pefa_def) and for some energy products the manual changes were made in PEFA tables compiled with PEFA Builder.

Therefore several energy products were analyzed in more detail.

As oil shale is the main energy source in Estonia it was essential to have this flow reflected correctly. The problem with oil shale was that PEFA Builder gave at first approximately 15 % statistical difference between supply and use tables. This issue occurred due to the fact that part of the oil shale is enriched before use and therefore the calorific value changes during the production process. There were held several consultations with national and international experts to overcome this problem and several possible solutions were proposed (can be seen more detailed in chapter 3.4.2). In the pilot project it was decided to use only one calorific value for oil shale, so the energy balance would be correct. However this was considered to be

60 too simplified method and in the next project additional work would have to be done to present the oil shale flow correctly.

At this stage of the project there was also a problem with shale oil and its allocation in PEFA tables. It was decided to add shale oil manually into PEFA tables and in the next project to find better solution in order to overcome this problem. Also the classification issues with oil shale products should be further investigated in the next project.

The energy flows regarding wood, wood waste and other solid biomass; peat and peat products needed also some extra work due to the fact that PEFA Builder allocated this production (and in some case the use) of these energy products into different economic activities than it is relevant in Estonian case. The calculations to include correct biomass, peat and peat products were made manually but afterwards based on these calculations the PEFA Builder was changed (worksheet “See PEFA definitions”).

Due to the fact that in Estonia’s IEA questionnaires all wastes “use” are aggregated under category “municipal waste – non-renewable” it was important to make more detailed distribution of wastes for PEFA. It was possible to get specific information (amounts and calorific values) of one big waste incineration company, therefore firstly the model calculations were based on this company’s data. Based on the experts opinions and research materials analyzed the waste energy flows were divided into three categories: industrial waste, renewable municipal waste and non-renewable municipal waste, and IEA questionnaires were altered for PEFA purposes. Sophisticated calculations were used but in the future it is important to find data sources which could be used routinely as for regular compilation of the account it is not advisable to use single research projects deliverables. In future the higher compliance between IEA and PEFA would be desirable.

Several energy flows not covered in Estonian energy statistics were studied during current project. For example energy produced by the heat pumps is not covered by Estonia’s energy statistics and is not reflected in IEA/Eurostat Energy Statistics Annual Questionnaires. Heat pumps production was calculated with the help of the expert and was based on SHARES calculations. The distribution between sectors was made based on assumptions and the output of heat pumps was included in PEFA.

Solar energy is also yet not covered by Estonia’s energy statistics. For solar energy it was complicated to get data about production volumes. It was decided that solar energy supply and use will be not covered in this project due to the shortage of data sources. Also the output of solar energy in Estonia is still relatively small. This topic needs further investigation in the next project.

In Estonia there are some companies which collect different types of waste oils, recycle these wastes (mainly with physic-mechanical methods) and produce energy products out of them. This energy flow (energy products from oil wastes) is not captured by Estonia’s energy statistics as well. In order to quantify this flow a survey was carried out among relevant companies. Due to the fact that response rate was low and it seemed that the quantities were relatively small it was decided that this issue is further investigated in the next project.

Petrochemical industry is existing in Estonia but it is not covered by Estonia’s energy statistics as no domestic consumption of these products appear. The flow was calculated at it was decided that it will be included in PEFA but the exact quantification and allocation issues for this flow will be further investigated in 2017.

In addition there are still some remaining issues in regard to Physical Energy Flow Accounts in Estonia which have to be solved in the next project:

 Continuation of the improvement of the oil shale calculations and classifications.  Continuation of setting up of the routines for accounting of the waste flows (incineration).  Inclusion to PEFA the production of petrochemical industry  Further specification and allocations of energy products produced from wastes (e.g. fuels from waste oils).  Further exploration on the solar energy flow.  Charcoal energy flow – identification and allocation of the production and consumption.  Biogases – further investigation of the production and consumption of biogases as different data sources gave different results.

Sustainability of the dataflow is important aspect to consider as in this project several assumptions were made based on experts’ opinion. In a future for regular data delivery continuous flow from databases would be preferred for the experts’ opinions.

While compiling the Physical Energy Flow Account it was important to be in compliance with National Accounts. There were taken several actions to achieve it. The adjustments were based on relevant national accounts register and databases data and already existing satellite accounts.

During the year of pilot project there were several consultations held with experts from Estonia and abroad. In May 2016 there was organized a study visit to Belgian Planbureau where the emphasis was mainly set on the overall compilation of Estonia’s PEFA, problems according to oil shale, peat and biomass flows and on the compliance with National Accounts and energy statistics. Also a seminar in Estonia in October 2016 with national and international experts (Belgian and Eurostat experts) was held in the framework of this project. The aim of the seminar was to present our results and get relevant feedback for our methodologies and also possible shortcomings.

The methodology is basically developed but is not complete yet as there are still minor issues regarding standardization of the compilation process, coverage of the more rare energy products and quality improvement which have to be solved. In addition the emphasis will be set on the issues regarding the oil shale, petrochemical industry, wastes and renewables. More tight cooperation with energy statistics is desirable in order to achieve the smooth production of Physical Energy Flow Account and better compliance with energy statistics and national accounts. Next project starts at the beginning of 2017.

References

OECD/IEA. 2004. Energy Statistics Manual. OECD/IEA. Paris.

PEFA Manual 2014 (http://ec.europa.eu/eurostat/documents/1798247/6191537/PEFA- Manual-2014-v20140515.pdf/12d7dcb3-cc66-46fd-bcb7-45bbbe9ba541)

IEA/Eurostat Annual Questionnaires manuals. (http://www.iea.org/statistics/resources/questionnaires/annual/)

Forestry Yearbook 2014. 2016. Estonian Environment Agency.

Moora, H. 2013. Sampling and analysis of the composition of mixed municipal waste, source separated paper waste, packaging waste and WEEE generated in Estonia. SEI Tallinn.

Estonian Waste Data Management System (https://jats.keskkonnainfo.ee/main.php?lang=en&public=1)

Determining the composition of MSW incinerated in Iru Power Plant. Tallinn University of Technology, Stockholm Environment Institute Tallinn Centre. Tallinn. June 2015. (In Estonian).

National Development Plan for Oil Shale Use 2016 – 2030. Approved by the Parliament on 16 March 2016. (In Estonian).

Ots, A. 2006. Oil Shale Fuel Combustion. Eesti Energia AS. Tallinn.

Estonian Heat Pumps Association. (http://www.soojuspumbaliit.ee/Statistika)

Soosaar, S. 2015. Provisional method for calculation of renewable energy derived from heat pumps in conditions of incomplete data. (In Estonian).

Aaloe, A., Bauert, H., Soesoo, A. 2007. Kukersite oil shale. MTÜ GEOGuide Baltoscandia. Tallinn. (http://www.gi.ee/geoturism/KukerOilShale_ENG_062011_100dpiS.pdf)

Koel, M. 1999. Estonian oil shale. (http://www.kirj.ee/public/oilshale/Est-OS.htm)

Kearns, J., Tuohy, E. 2015. Trends in Estonian Oil Shale Utilization. International Centre for Defence and Security. (https://www.icds.ee/fileadmin/media/icds.ee/failid/Jordan_Kearns_- _Trends_in_Estonian_Oil_Shale_Utilization_Oct_2015.pdf)

ANNEX 1 Study visit to Belgium: agenda, discussions, conclusions

Study visit

Consultation for the development of the methodology for the Physical Energy Flow Accounts in a framework of the Eurostat Grant Agreement nr 05122.2015.001-2015.538 on „Physical Energy Flow Accounts for Estonia, development of the methodology”

Address Federaal Planbureau / Bureau fédéral du Plan Kunstlaan / Avenue des Arts, 47-49 Brussel / Bruxelles Belgium Rooms: 5th floor Date: May 30-31, 2016 List of participants:

Statistics Estonia

Ms Kaia Oras – Deputy Head of the Environment Economic Statistics Service, who is responsible for environmental accounts compilation Ms Kriste Kald – leading statistician, responsible for Energy Flow Accounts; Ms Eda Grüner – leading statistician-methodologist, responsible for the compiling of the monetary environmental accounts;

Federaal Planbureau / Bureau fédéral du Plan

Ms Lies Janssen – expert, responsible for compiling the air emissions accounts and physical energy flow accounts Ms Laure Nols – expert, responsible for compiling the EGSS Mr Guy Vandille – expert, coordinator of the environmental economic accounts group

Overview and first problems Kaia Oras gave an overview of Estonian project team and the steps we have done so far. Eda Grüner gave an overview of fuels what are covered and not covered in Estonia’s energy statistics. There are some general problems with classification and coverage: 1. Coverage of energy statistics survey. Services sectors are not covered sufficiently, the sample is not representative for bottom up approach. We decided to use indirect approach (SUT) data to make distribution keys for some fuels. 2. Non-energy use of fuels. Expert Lies Janssen said that non-energy use of fuels (in our case peat and wood) should not be covered in PEFA. According to Eurostat’s opinion: if category is not indicated in energy questionnaires then it should not be covered in PEFA.

3. PEFA Builder allocates the products under certain sector but it is not correct in case of secondary and auxiliary activities. For example PEFA Builder allocates mining always under B but extraction occurs also in other economic activities (shale oil production, cement industry, construction etc.). Expert said that in the new version of PEFA Builder it would be possible to allocate the quantities to the active sector in the PEFA Builder itself and hence not need to change them manually afterwards in PEFA Questionnaire. But the new version is expected to be ready in next year, so we have to do those corrections manually this year. 4. Naphta products – naphta residues are imported as wastes, in Estonia these are recycled and as a result naphta products are produced. These products are exported. Our energy statistics does not cover this flow because there is no consumption of them in Estonia. Expert Lies Janssen suggested that – if an Estonian firm aquires ownership of the naphta waste and generates value added for Estonia by refining this waste - these products should be by her opinion covered in the National Account (to be verified); energy accounts and also in energy statistics (IEA Questionnaire). 5. Asphalt residues – this bitumen is used for non-energy purposes. Lies Janssen said that this one should not be showed in PEFA account. Same logic as point 2. 6. Wastes – how to interpret renewable and non-renewable wastes? So far in PEFA we indicated mixed municipal wastes under category “Municipal wastes (non- renewable)” as municipal wastes are incinerated (as a one homogenous waste fuel fraction) and they are not recycled as materials. So we indicated these mixed municipal wastes as not biodegradable. However in PEFA terms renewable wastes are biodegradable wastes which can be incinerated. So far we thought that renewable wastes indicate materials that can be recycled like glass, paper, plastic and metal according to the concept of waste statistics. In Belgium, wastes that are incinerated are divided between renewable and non-renewable. It is done based on evaluation, made a proportion how much is renewable and how much is non-renewable. By Belgium expert opinion we should make estimations how much from municipal wastes (which are incinerated) is biodegradable and therefore need to show renewable wastes separately. Because it is difficult for us to estimate whether the mixed municipal waste is biodegradable or no we probably have to show all municipal wastes under non- renewable category but in project report have to explain it. An alternative is to use the ratio proposed by the IEA or Eurostat (energy statistics). They propose a ratio of the portion of biodegradable waste in municipal waste. Stephan Moll: Have we interpreted concept correctly? NACE breakdown tables Eda Grüner and Kriste Kald gave an overview of data sources and how we filled in the tables. Data sources are following: 7. Lubricants – proportion of vehicles on the level of economic activities (administrative data of Vehicles Register) – hypothesis: each vehicle uses the same amount. Corrections are not made for the size. 8. Solid biofuels – proportion of emission CO2 from biofules on the level of economic activities, (Air emission account 2013) 65

9. Gasoline and diesel – last available proportion of expenditures on fuels on the level of economic activities (SUT, Air emission and environmental taxes accounts 2013) 10. Data about households (except gasoline and diesel) – from energy balance, 2014 11. Distribution of other energy products is done on the basis of energy statistics survey basic data, 2014 In the first version of PEFA we filled in the NACE Breakdown tables as follows: 12. Tables 1-7 (Industry detailing energy and non-energy use) – using various data sources depending on the fuel mentioned above (points 7-11) 13. Tables 8-10 (Non-energy use of coal products) – non-energy use of peat according to PRODCOM data 14. Tables 11;12;14;15 (Industry detailing energy and non-energy use) – using various data sources depending on the fuel mentioned above (points 7-11) 15. Table 13 (Energy and non-energy use in Transport sector) – gasoline, diesel, lubricants (points 7 and 9) 16. Table 16 (Road) – gasoline, diesel (only for land transport), lubricants (points 7 and 9) Expert Lies Janssen agreed that tables 1-7 are filled in correctly. About table 8-10 she specified that we do not have to show non-energy use of peat at all. But still it is needed to clarify if it is necessary to show non-energy use of oil shale there. About tables 11-15 the expert said that we do not have to fill them if the categories “Not elsewhere specified” in IEA energy questionnaires are empty. The last table (Road) was considered to be filled in correctly. Although we need to check if there is used LPG for road transport however the quantities are probably very small. If it is, it has to be shown there also. Oil shale Eda Grüner gave an overview about oil shale statistics and the problems what we have with this topic. First question was about mining losses – do we have to count the losses indicated as “losses” in the national mineral resource balance sheets ie columns of oil shale which stays in the mines (technological losses)? Lies Janssen said that these are non usable resources, they don’t leave the ground and are not combusted. There is no loss of energy, so it shouldn’t be indicated as loss. Kaia Oras mentioned that this part of oil shale is loss of active resource but Belgian expert said that in terms of energy this amount is not loss because it stays untouched in the ground. Expert discussed this issue with Dutch colleges, who have the same opinion: it is not a loss in energy flows (only an asset loss, but that is outside the scope of PEFA). PEFA is an energy FLOW account and there is no flow of energy in this case. If you compile an energy asset account, it would be a loss, but not here. Another issue is production losses – how to estimate them? Oil shale production enterprises do not show losses during production and Estonian energy statistics also do not cover these losses. Expert said that these losses should be counted in PEFA but then they also should be covered in energy statistics and National Accounts. If energy statistics do not cover them, then these losses should not be showed in PEFA. Next topic was differences in oil shale balance in physical and energy values. Due to the fact that IEA questionnaires do not take into account the partial enrichment of oil shale (calorific

66 value changes in production chain), PEFA Builder gives ca 20% of statistical difference between supply and use in energy values. Eda Grüner proposed three possible solutions to deal with this problem:  Change the oil shale quantities (subtracting the waste rock) in COAL questionnaire  Change the calorific values in COAL questionnaire  Let COAL questionnaire as it is and compile PEFA for oil shale (and oil shale products) manually It seems that the third option is the best solution right now. Expert Lies Janssen suggested that there should be different sheet for enriched oil shale in IEA questionnaire to avoid miscalculations with PEFA Builder. We are not aware if this new product (enriched oil shale) could be introduced in questionnaires as those are managed by IEA. Another option is to ask Eurostat if they can build in a specific module in the PEFA builder that resolves this issue. Next problem is with the classification of oil shale derived products in PEFA. PEFA Builder places the oil shale gas under different product category than we did – natural gas (our estimation – derived gases). Expert checked both the COAL manual and the natural gas manual of the IEA and suggested that Gas Works Gas is the most appropriate. We have to check and if necessary have to change the IEA questionnaire (as we had already allocated oil shale gas under Gas Works Gas). We also didn’t know why PEFA places the shale oil under category “Crude oil, NGL, and other hydrocarbons (excl. bio)” but it turns out that in IEA OIL questionnaire it is classified under “other hydrocarbons”. Oil shale coke is another problematic product. In Estonia’s COAL questionnaire it is classified under coke oven coke (energy product), but it really doesn’t correspond to the coke oven coke because it’s not burnt. In our case it is exported as non-energy product (electrode coke). Lies Janssen suggested that this production should be under category “energy corporated in non-energy products” or not in the PEFA at all if it can never be reused as an energy product. Without changing IEA questionnaire regarding the allocation of this product, we have to allocate this product manually. Shale oil production residuals (fuses) are hazardous wastes and are now placed under category “residual fuel”. Lies Janssen suggested that actually these should be showed under category “industrial wastes”. We allocated it under category “residual fuel” because in supply table we did not find any other place to indicate it. We are not sure do we have to indicate supply and use of energy products not covered by energy statistics. For example the use of oil shale gas which is used by the same facility where it was generated. Air emission accounts do account emissions of the burning of this gas. The same time NA does not count this auxiliary activity. Lies Janssen suggested that own use should be included to paint the full picture. In conclusion there are two options for oil shale and its products in PEFA: to compile oil shale and its products supply and use account separately (1) or to include specific extra functions for enriched oil shale in PEFA Builder by developers (2). However at first we should do oil shale part manually and explain in project report why we decided to do that.

It was decided that we will investigate more the oil shale part of PEFA and before the autumn seminar we will send our new results to Lies Janssen. Also we should ask about PEFA Questionnaire logic from Stephan Moll because for example some quantities of oil shale flows are displayed as negative values. Compliance with National Accounts Question was about auxiliary and secondary activities. PEFA Builder places some activities under certain sectors (mining always under B etc) but it is important that enterprise’s secondary or auxiliary activities are shown under the same sector as this enterprise main activity in order to be compliance with NA. Lies Janssen suggested how to regard the secondary activities of enterprises in compiling PEFA (in Estonia the enterprise level, not kind of activity unit level is used in National Accounts) to reallocate them manually in PEFA questionnaire tables A and B. Peat and peat products Kriste Kald gave an overview of peat balance calculations and relevant problems with calculation process. As we described above that we learned that non-energy use of fuels shouldn’t be showed in PEFA then we have to recalculate the balance manually. We also have an issue with losses (our losses are probably under estimated) and the PEFA NACE allocation (PEFA puts the production numbers under different sectors than Estonian NA). Expert Lies Janssen suggested that we should consult with peat producing companies according to losses. Also she suggested that we can try changing the sectors of use of peat in NACE Breakdown tables so the sectors in PEFA questionnaire will be correct and therefore we do not have to do peat part manually. Nonetheless we may ask about non-energy use of peat from Stephan Moll. Other issues discussed regarding IEA energy tables (JQ) 17. What means the non-energy use in energy questionnaires? We have to clarify all non- energy issues in Estonia’s IEA Annual Questionnaires (consult the leading statistician of energy statistics) – what goes under these categories. 18. What to do with lubricants? Our energy statistics puts them under category “non- energy use” but IEA says that lubricants have to be shown as energy use. Stephan Moll can you comment on it? Why lubricants are energy use when they are used for non-energy purposes? The discussion with these issues should be continued with the leading statistician of energy statistics. We should check the manuals of energy Annual Questionnaires, so we know how energy statistics compile them. Solid biofuels So far we have only briefly covered this topic. First remark according to biofuels is that Estonian energy statistics might have to change the energy balance little bit because it is unlikely that sector D produces straws. This flow probably comes from agriculture. Expert suggested that the natural input of solid biofuels should be counterbalanced by the use. The amount which is used is the same amount which came from the environment. So about wood for example it is easier to start with use side and then conduct the supply side.

We have the issue that the amounts of fuel wood, pellets, chipped wood and wood industry residues sums up to the same amount which was the total felling in Estonia in 2014. But the considerable amount (at least half) of felled wood also goes for furniture production and export. Expert Lies Janssen said that there is double counting and should be because all of these flows have to be recorded separately. More time will be dedicated on solid biofuels in coming months. Additional remarks  Methods for accounting of heat production: Belgium prefers air emission accounts methods over NA to compile PEFA. But the activities (NACE) should be compliance with NA. This is also what the PEFA manual says to do.  Intra EU and extra EU distinguishing for import-export: it is not obligatory. We do not have to make the difference between these two categories. Belgium puts everything under intra EU.  About diesel: In Estonia we have a situation where diesel is imported from Latvia but the actual origin country is Russia. The question is which one of them should we indicated as origin country? The expert Lies Janssen suggested that in this case the origin country is Latvia because this is how it is allocated in energy statistics. Intra EU and extra EU distinguishing for import-export: it is not obligatory. To be exact: you should verify the nationality of the company which sells it to Estonia. If it is a Latvian residential entrerprise, the import is from Latvia (as in the National Accounts). If the company is Russian, however, it is a Russian import. Overview of Belgian energy account Lies Janssen gave an overview of compilation of Belgian energy account. PEFA is the satellite account of National Accounts. Time series of it is 1990-2014. They have three regional energy balances (each region has different formats so the compilation is also different). To these balances they include data from National and Regional Accounts, road transport (COPERT output, taxes and ownership database) and residence principle adjustments. Result is three regional PEFAs. To these they add import-export data derived from the Belgian IEA questionnaires processed by the PEFA Builder, inconsistencies are balanced with inventories. The result is complete Belgian PEFA. About PEFA Questionnaire table C (Emission-relevant use of energy flows) Lies Janssen said that they haven’t spent much time on conducting it yet. Lies Janssen also compared the results of Belgian energy account with other countries outcomes. This gives an idea how to make energy account presentable for policy makers. Some of the indicators which can be present are energy intensity, net energy used by sectors, domestic production of energy products and energy use of households. PEFA table D contains the key indicators which could possibly be informative for different interest groups. Because this is the pilot project of PEFA in Estonia we cannot show time series of results but there is possibility to make comparison with other countries or just present Estonia’s results of 2014.

Additional discussion points 19. Estimation of the distribution of the energy use by economic activities for the years when SUT tables will be not compiled yet – is it okay to use old SUT data? Lies Janssen suggested that it is possible to apply the growth rate of value added to SUT numbers. The problem is we do not have value added with this kind of allocations (NACE 21). To do so it would still be estimation but it would be updated numbers however. If we have time we could test this method with old years. We can add the value added ratio to the old SUT years and compare how the estimated numbers and real numbers fits together. We can try to do it only regarding big companies data because they have the biggest influence. 20. Energy produced by heating pumps – Energy produced by heating pumps is not covered in energy balance yet. Do we have to include it and under which category? Lies Janssen said that heating pumps should be included not under geothermal heat but under heat because they need electricity to operate. So heat pumps are partially renewable. Probably the IEA leaves it open for countries to decide is it totally renewable or partially renewable. It is difficult to estimate how much electricity heat pumps need and how much heat they produce. List of issues for future discussions and future plans 21. How to deal with waste incineration with energy recovery? This flow is not covered as energy input in energy statistics but the data is available via waste statistics. Should this be included and under which category? By Lies Janssen opinion, use of (non-) renewable waste by either NACE 35 or NACE 37-39 (depending on the economic classification of the incinerator) has to be included. This counterbalances the supply of heat/electricity by these incinerators 22. Question for Stephan Moll: Should biomass fuels be indicated in table C? The emissions of biomass are out from UNFCC totals for CO2. 23. Insight of renewables – hydro, solar, wind, sewage sludge gas, landfill gas. We have to have closer look into REN questionnaire and compare it with ELE questionnaire. 24. Further investigation on secondary activities regarding heat and electricity production. 25. Emission relevant energy use table (Table C) – Lies Janssen suggested that the easy way to do it is multiplying the percentages from air emission account of fuel use with numbers from table B. 26. We agreed to cooperate further and to meet for consultation in October in Tallinn.

ANNEX 2 Physical Energy Flow Account seminar in Estonia

Study visit report

October 26-27, 2016

List of participants:

Statistics Estonia Ms Kaia Oras – Deputy Head of the Environment Economic Statistics Service, who is responsible for environmental accounts compilation Ms Eda Grüner – leading statistician-methodologist, responsible for the compiling of the physical environmental accounts; Ms Kriste Kald – leading statistician, responsible for Energy Flow Accounts; Ms Helle Truuts– leading statistician, responsible for the compiling of the energy balance and IEA questionnaires Mr Siim Loik – leading statistician, future responsibility in Energy Flow Accounts;

Mr Sulev Soosaar – Tallinn University of Technology Thermal Engineering Department, engineer, consultant Mr Matti Viisimaa – Estonian Environmental Agency KAUR, leading specialist, waste expert

Ms Lies Janssen – Federaal Planbureau / Bureau fédéral du Plan, expert, responsible for compiling the air emissions accounts and physical energy flow accounts EUROSTAT: Mr Stephan Moll – expert, coordinator of the environmental economic accounts group

October 26, Wednesday

Introduction

Kaia Oras gave a short introduction about the agenda and the participants of the seminar. The introduction also contained the overview of Estonia’s Physical Energy Flow Account (PEFA) project: the timetable, what has been done so far and what has to be done in next few months.

Next there was presented the first results of PEFA. About the fuels listed which are not covered by Estonia’s energy statistics it was proposed that the energy products which are not covered by Estonia’s energy statistics but which are still used in Estonia should be marked. There was also discussion on the coverage of energy statistics survey. Services sectors are not 71 covered sufficiently, the sample is not representative for bottom up approach. So we decided to use indirect approach (SUT) data to make distribution keys for some fuels.

The next step was what kind of data sources we used to filled in the NACE breakdown tables:

 Lubricants – proportion number of vehicles on the level of activity, (administrative data of Vehicles Register)

 Solid biofuels – proportion of emission CO2 from biofules on the level of activity, (Air emission account 2013)  Gasoline and diesel – last available proportion of SUT’s expenditures on fuels on the level of activity  Data about households (except above mentioned) – from energy balance, 2014  Everything else comes from energy statistics survey, 2014

We decided to leave the tables 8-10 (non-energy use of coal products) empty due to the fact that we do not have information and data what we should indicate there. In the future it is possible to indicate the non-energy use of oil shale there if we have sufficient data about it. Experts agreed that we can leave these tables empty for now.

Next Stephan Moll gave an overview about the concept of energy balances. In energy balance tables the products are column wise and in rows there are three blocks:

1. Supply – e.g. import, export, production, stock changes, marine bunkers, total. Basically shows what energy products are available in the country. 2. Transformation – this part shows how these products are used to be transformed into so-called secondary products. It shows how much primary energy product is used and how much of the secondary production comes out (available for final consumption). The difference between primary energy product input and secondary product output is the so-called transformation loss. 3. Final consumption

The framework of supply and use tables comes from NA to show the production, consumption and accumulation in an economy. In physical SUT the products are in rows and activities are in columns (e.g. production activities, household consumption, accumulation, rest of the world, environment).

Sulev Soosaar questioned that wouldn’t it be better to take the Eurostat energy balance as the basis for PEFA rather than the IEA/Eurostat Annual Questionnaires. Stephan Moll explained that Annual Questionnaires have much more detailed information. Also Eurostat energy balance and national energy balances may have different outcomes in some countries due to the use of different energetic values.

Due to the fact that PEFA and energy statistics have a different scope the question was raised that should these two accounts be in compliance with each other? Stephan Moll said that PEFA Table E 'Bridge Table' is supposed to show explicitly the conceptual differences.

Oil shale

Eda Grüner gave an overview about oil shale statistics and the problems what we have with this topic.

The biggest issue is with the differences in oil shale balance in physical values and energy units. Due to the fact that IEA questionnaires do not take into account the partial enrichment of oil shale (calorific value changes in production chain), PEFA Builder gives ca 15% of statistical difference between supply and use in energy units. Eda Grüner introduced three possible solutions how to deal with this problem:

 Change the oil shale quantities (subtracting the waste rock) in COAL questionnaire (in tonnes)  Change the calorific values in COAL questionnaire  Let COAL questionnaire as it is and compile PEFA for oil shale (and oil shale products) manually

It seemed that the third option is the best solution: to do the oil shale part manually it means that the amount of oil shale in some production steps should be decreased. The waste rock should be subtracted from the raw oil shale to get the enriched oil shale quantities. Therefore there should also be used different calorific values –lower for raw oil shale and higher for enriched oil shale. In this way the balance in energy units is almost correct (difference is under 1%).

Stephan Moll proposed that we should maybe use only the lower calorific value for the entire amount of oil shale. This is the one possibility to overcome this problem. He also proposed that we should change our COAL questionnaire in order with tons or with calorific values. The easiest for country is to report only one calorific value for oil shale. So maybe the solution is that we should only report the calorific value of raw oil shale and do not report the higher ones in JQ-s because the balance in tons is made based on raw oil shale.

Lies Janssen suggested that one solution to overcome the difference with oil shale in PEFA is to indicate some quantity of the oil shale (waste rock) as loss.

Stephan Moll referred that problem stemming from COAL questionnaire might be solved if to unify the calorific values there and perhaps the difference between physical and energetical balance would not be so big anymore. It seems that enriched flows of oil shale should not be presented in COAL questionnaires alongside with raw oil shale. So perhaps it is possible that Estonia’s energy statistics could change the calorific values in COAL questionnaire table 4.

Stephan Moll suggested that it is also possible to show the waste rock in COAL questionnaire in the row “statistical difference”, this maybe also gives the better solution. So we have to reduce the numbers from use side and put this difference under statistical difference. This oil shale problem only influences COAL questionnaire, we do not have to do anything with OIL questionnaire. He also referred that it is okay if we have different ways to calculate oil shale in energy statistics and PEFA. The different approach just has to be explained in project report. 73

For next step PEFA team in Estonia tries to calculate the oil shale balance in different ways. The first version would be calculating each step of oil shale with lower calorific value. Afterwards we send it to experts and meet somewhere in the end of November with our national experts.

We will return to this issue with our energy experts and try the different ways and then decide is it better to do some separate calculations and change the values only for PEFA account or energy statistics changes their reporting and we can use the COAL questionnaire totally.

Next problem is with the classification of oil shale derived products in PEFA. PEFA Builder places the oil shale products in the different categories than we would like to indicate them:

 Oil shale gas – PEFA indicates it under “natural gas”, our estimation is that it should be under “derived gases” category.  Shale oil – PEFA indicates it under “crude oil, NGL, and other hydrocarbons (excl. Bio)”, our estimations is that it should be under “heating and other gas oil” due to the fact that it is used for heating.  Oil shale coke – PEFA indicates it under “secondary coal products”, our estimation is that it should be under category “energy incorporated in products for non-energy use” due to the fact that in Estonia’s case it is electrode coke and not used for energy purposes.

PEFA Builder allocates these products into PEFA Questionnaire based on IEA/Eurostat Annual Questionnaires. Stephan Moll said that it is up to us if we want to show oil shale and its products differently in PEFA than energy statistics indicates it.

Another issue is the negative values in PEFA Questionnaire table B for shale oil. For some reason two quantities in sector C19 (Manufacture of coke and refined petroleum products) in categories “heating and other gasoil” and “residual fuel oil” are displayed as negative figures. Stephan Moll referred that this anomaly comes usually from OIL questionnaire row “interproduct transfers” but not in Estonian case because this cell is empty. In Estonian case it seems like it comes from the row “primary product receipts”, but why PEFA Builder indicates it with negative sign is not clear right now. The problem is with PEFA Builder, because it takes the values from certain cells but Estonia reports quantities under different categories. This is again due to the peculiarity of oil shale and its products. This topic needs further investigation.

How to regard the secondary and auxilliary activities of enterprises in compiling PEFA tables (in Estonia the enterprise level, not kind of activity unit level is used in National Accounts)

The problem is that PEFA builder allocates some production always under certain sectors: e.g. mining under sector B, fuel wood production under A02, heat production under D35 etc.

This is the reason why we decided to calculate some energy flows manually, for example biomass and peat. Problem is that we do not know how to overcome this problem in PEFA Builder itself. 74

Stephan Moll said that one possibility is to change the sectors in PEFA Builder. At the bottom of the PEFA Builder worksheet there is the button “see PEFA definitions”. In this sheet it is possible to narrow down one energy product and add some additional rows to it. This how it is possible to change and add the sectors for supply and use of some energy product. In the last column (PCT) the percentage of a sector has to be changed. The expert also referred that in the next version of PEFA Builder the biomass part would be more detailed and user can indicate the correct sectors as one step in PEFA Builder, without adding the rows to the definition sheet.

Definition of losses: What exactly should be indicated under losses (losses during the production fuels: excavation, felling, transportation, storage; transformation losses; transmission and distribution losses) in PEFA and from where PEFA Builder automatically takes these data? Especially if our energy statistics does not show losses for any fuel but just electricity and heat transmission losses in IEA/Eurostat Joint Questionnaires.

The Eurostat expert explained that it seems that there is no need for any extra work according to losses, PEFA Builder calculates it automatically. In principle the losses indicated in PEFA were discussed:

1. Excavation losses (technological losses, as for oil shale, are not included) – the difference between natural input into extraction/mining and output of products ('run of mine') 2. Transformation losses during transformation from primary energy products towards secondary energy products (e.g. transformation of hard coal into electricity in a power plant) – in IEA there is input of transformation and output of transformation, so PEFA Builder takes the difference between them two and adds it to the PEFA Questionnaire as loss 3. Distribution losses – these losses are for electricity and heat, which are indicated in IEA questionnaires 4. Final use – end use loss (dissipative heat arising from end use which is 'emitted' to environment)

If we calculate some energy flow manually then these losses should be added manually also.

Lies Janssen suggested that if we want to lose some statistical differences it is possible to indicate it under the category “changes in inventories”, since this is practice common to the National Accounts.

It was concluded that it is very difficult to arrange the losses perfectly in the first versions while completing the PEFA with the help of the PEFA builder as IEA /Eurostat JQ-s does not give clear guidelines and quite often the values equal zero. The question of missing losses has a low priority for Eurostat as well at present.

Petrochemical industry

There is one company in Estonia which imports some chemical compounds (oil products), produces energy products from them and then exports these products. Our energy statistics does not capture this flow because there is no major domestic use and this company has not reported anything about the production of energy products in their energy questionnaires (what they report to energy statistics) but the enterprise has reported the production of the fuels in PRODCOM reporting.

Stephan Moll referred that if this flow is not covered by energy statistics then it could not be covered in PEFA also when using the PEFA-Builder. Lies Janssen claimed that this production should be definitely covered by the PEFA and also best in the energy statistics if it is in NA. Also it should be classified as in NA. It would also help to contact with this enterprise to clarify their production.

Stephan agreed in principle and said that in PEFA Questionnaire tables this flow should come from non-renewable waste as import and then sector 20 (Manufacture of chemicals and chemical products) uses it for the production. The production should be indicated under product P17 “transport diesel” or under P18 “heating and other gasoil” which is then exported.

If this production would be covered in energy statistics then in OIL questionnaire the production should be indicated under refineries. In OIL Table 1 it is import of refinery feedstock and goes to the refinery intake in the same table. After that, in table 2a, it goes to the row “primary production receipts” under “heating and other gasoil” or under “fuel oil”. After that the total amount goes to export.

Helle Truuts said that this means that we have to deal with confidential issues because there is only one company who does this kind of production. We cannot report their output because this data is confidential. Lies Janssen suggested that we can report it but has to flag it confidential so it would not be published.

This topic needs further investigation and consultations with national experts.

Municipal and industrial wastes

In PEFA, municipal wastes are divided into two: renewable (R28) and non-renewable (R29). Renewable municipal wastes are the biodegradable part from municipal wastes. The question is that is it necessary to make the distinction between renewable and non-renewable municipal wastes in PEFA? Right now, all wastes in Estonia’s energy statistics are indicated under category municipal wastes – non-renewable.

Stephan Moll said that it is not so important to make the distinction between renewable and non-renewable wastes for the PEFA. If energy statistics does not do it then it should not be done in PEFA either. However energy statistics should do this distinction but it is okay to use simplified distribution key at first (make the 50%-50% split) and then revise it in future.

Due to the fact there are some studies made in Estonia on the basis of the composition of municipal waste, there are available more specified information to do the split. Therefore we will discuss it with our energy statistician who could potentially make the distribution in REN questionnaire.

About wastes in PEFA Questionnaire tables Stephan Moll clarified that categories R28 and R29 can contain other materials also beside the waste as legally defined in a more narrow way. The residual part in PEFA contains everything that cannot be classified as product. The PEFA concept of residuals (wastes) does not coincide fully with waste legislation.

Industrial wastes are not separately indicated in Estonia’s energy statistics. Some industrial wastes quantities which are known for energy statistics are together with municipal wastes. Our national expert Matti Viisimaa has some data about industrial wastes which we can probably use. In the seminar we found one company’s data (who incinerates wastes), which should be divided between different categories in energy statistics REN questionnaire. In this case, the amount which is shown as non-renewable municipal waste at present should be divided into three categories: non-renewable municipal waste, renewable municipal waste and industrial waste.

Nevertheless that Estonia’s energy statistics does not cover renewable wastes, the renewable waste cell in PEFA Questionnaire table B under the accumulation is filled. The expert said that this is the data from REN questionnaire table 4 and contains black liquor and biogases.

Additional problem in Estonia’s case is that it is not clear whether all the incineration plants are included in Estonia’s energy statistics or not. In the case of waste we still needs to consult with our energy statistician Helle Truuts to be clear what and how are indicated under wastes in REN questionnaire.

About wastes Stephan Moll said that it appears to be double counting right now in PEFA according to non-renewable waste. However this is the PEFA issue that we cannot do anything with.

This topic needs further investigation and consultations with national experts before the calculations could be made.

Waste treatment as a part of “petrochemical industry”

There are few cases in Estonia when some companies import or collect wastes from domestic enterprises and produce energy products (oil composites) out of them. Right now this case is out of energy statistics scope. How this flow should be indicated in PEFA and maybe even in energy statistics?

Stephan's opinion: The input into IEA/Eurostat Joint Questionnaires should be indicated in REN questionnaire under industrial waste. Right now it seems that most appropriate place for it is in transformation sector and “not elsewhere specified”. After that it should be indicated in OIL questionnaire table 1. At the bottom of the sheet there are cells for amounts which came from other questionnaires, so the amount should be indicated there under “renewables”.

In PEFA tables the input should come in Table A from energy residuals under accumulation (if the wastes came from domestic enterprises) or under ROW (if the wastes are imported). After that the amount is taken up in Table B by industries under energy residuals and after that it appears in Table A under sectors and energy products (most probably under P21 – “other petroleum products”).

Nevertheless it seems that we should contact with the enterprises that produce these kinds of products and ask about their production amounts. Also some useful information can be in their other reportings.