California Greenhouse Gas Emissions Forecasted to fall 11% and Quebec Emissions to fall 13% in 2020; then rise again in 2021

A recent model update by CaliforniaCarbon.info projects an 11.1% fall in total Greenhouse Gas (GHG) emissions between the 2019 estimate and the 2020 estimate for California and 13.2% for Quebec. The numbers are expected to rise back up in 2021 by around 8.6% to 14%.

The social and economic phenomena of 2020 have meant that expectations forecasts in all sectors have had to be rethought and reworked. Previously steady trends have diverged off their trajectories, and economic expectations from before February of this year have suddenly become outdated.

In light of this, CaliforniaCarbon.info has published ‘The End of the Trend’: a new short-term emission forecast for the sectors of the economy in Californian and Quebec, covered by the WCI carbon market. The report delves into a new level of data granularity, including monthly entity and facility-level output data to best estimate the overall annual emissions in 2019 and 2020. Sectoral recovery scenarios are also outlined to chart the potential pathways back to ’normal levels’ of economic activity.

Contributing half of total emissions, the transport fuels sector was the biggest determinant in the 34Million MT CO2e annual fall in total emissions in California and the 8Million MT CO2e reduction in Quebec. And the sector recovery will also be the biggest factor in deciding the timing and extent of the bounce-back in 2021 total covered emissions.

The other most notable results lie in the Natural Gas sector and the Refineries sector. Within Natural Gas, the estimated 2020 emission total is ‘just’ 1.8% lower than the 2019 total, where COVID-19 played no part. There is a sharp fall-off in industrial natural gas consumption of likely more than 7% between March and September, but residential and electrical power consumption was slightly above the average annual trendline.  This partially offset the fall in industrial usage, meaning demand in the sector was nearer to previous years.

Fuel refineries were one of the most affected sectors, gasoline production recorded a 13.2% fall YoY between January and September in 2020. This was even more extreme for Jet Fuel production which fell more than 40% across the same period. Again, the central question here for the WCI market lies in the timing and extent of recovery in the transport sector. Emissions from refineries, natural gas - albeit to a lesser degree, and other sectors, are all affected by the transportation activity within state. And this activity, in this year of years, is clearly dependent on the continued governmental and economic response to COVID-19.  So, an epidemiologist may be about as helpful as an economist in resolving California’s and Quebec’s 2021 covered emissions total.

To learn more: https://go.californiacarbon.info/2020EmissionsInventoryOutlook
 
Contact
Anant Jain
Carbon market analyst
insights@CaliforniaCarbon.info

 
Table of Contents
Glossary of terms
1            Executive Summary       
1.1         Cap-and-Trade Background Brief             
1.2         Sectoral Emission Reduction Programs  
1.3         Report Results  

2            Introduction     
2.1         The Global Context        
2.2         Legislation in California
2.3         California Covered Emission Trends        
2.4         Legislation in Quebec    
2.5         Quebec’s Covered Emission Trends        

3            California’s Covered Emissions Forecast
3.1         Expectations of 2019 Validated Emissions           
3.2         California’s Covered Emissions Forecast for 2020 and 2021             
3.3         California’s Overall Emissions    

4            California Key Sectors: Review and Forecast       
4.1         Transportation Fuels     
4.1.1     Review
4.1.2     Outlook and Impact of COVID   
4.1.3     Transportation Sector Forecast for the Remainder of 2020 and for 2021     

4.2         Natural Gas Suppliers   
4.2.1     Review
4.2.2     Outlook and impact of COVID    

4.3         Refineries and Hydrogen Plants
4.3.1     Review
4.3.2     Outlook and Impact of COVID   
4.3.3     Refineries Sector Forecast for the Remainder of 2020 and for 2021     

4.4         Oil and Gas Production 
4.4.1     Review 
4.4.2     Outlook and Impact of COVID   
4.4.3     Forecast for Oil and Gas Sector for remainder of 2020 and for 2021             

4.5         Fossil Fuel Power Generation    
4.5.1     Review
4.6         Electricity Imports         
4.6.1     Review

5            Impact of Wildfires in California

6            Quebec’s Covered Sector Forecast for 2019 & 2020         
6.1         Quebec’s Overall Emissions Trajectory   

7            Quebec’s Key Sectors    
7.1         Transportation
7.1.1     Review
7.1.2     Forecast            

7.2         Natural Gas Distribution by End-Use      

8            Annexure I: Top Emitters California        
8.1         Refineries          
8.1.1     Production and Emissions Profile of Top Refiners for 2019             
8.2         Supplier of Natural Gas, NGL, or LPG      
8.2.1     Emission Profile
8.4         In-state Electricity Generation   
8.4.1     Emissions Profile            
8.5         Electricity Importers     
8.5.1     Emissions Profile            

9            Annexure II: Quebec’s Top Emitters        
9.1         Stationary Combustion Sources
9.2         Other Product Manufacturing and Use  

 
 
List of Figures 
Table 1 California’s covered emissions (historical and forecast for 2019,2020,2021) by sector         
Table 2 Quebec’s covered emissions (historical and forecast for 2019,2020,2021) by sector         
Table 3 California’s Expected Emissions for 2019
Table 4 California’s covered emission forecast 2020, 2021            
Table 5 Quebec’s covered sector forecast for 2019 and 2020       
Figure 1. 1   California’s trend of reductions in covered emissions versus the state’s allowance budget
Figure 1. 2 Quebec’s trends of reductions in covered emissions versus the state’s cap on emission units
Figure 2. 1 Decoupling California’s Emissions from GDP (Billion USD)
Figure 2. 2 California’s Emissions Intensity: Kg CO2e per Dollar GSP
Figure 2. 3 Quebec’s Emissions and GDP (Billion CAD)
Figure 2. 4 Quebec’s Emission Intensity: Kg CO2e per unit GDP (CAD)
Figure 2. 5 California’s covered emissions trend 
Figure 2. 6 Quebec’s covered emission trend      
Figure 3. 1 California’s Forecast for 2019; YoY Change by Sector 
Figure 3. 2 California’s Forecast for 2020,2021; Net YoY Change 
Figure 3. 3 California’s Forecast for 2020,2021; YoY Change         
Figure 3. 4 California’s Forecast for 2020,2021; YoY Change by sector      
Figure 3. 5 California’s Overall Emissions: includes covered and non-covered emissions          
Figure 4. 1 Top 5 Emitters: Transportation Fuels
Figure 4. 2 Taxable Gallons of Motor Vehicle Fuel by organization            
Figure 4. 3 Share of Motor Vehicle Fuel distributors in 2019         
Figure 4. 4 Overall Change in Emissions (M Mt CO2e): Transportation Fuels             
Figure 4. 5 Absolute Emissions for 2015, 2016, 2017 and 2018: Transportation Fuels     
Figure 4. 6 Fuel Volumes by Fuel Type   
Figure 4. 7 Fuel Volumes by Fuel Type   
Figure 4. 8 Fuel Volumes by Fuel Type: Alternative Fuels
Figure 4. 9 Emissions by Fuel Type          
Figure 4. 10 Emissions by Fuel Type: Alternative Fuels    
Figure 4. 11 Impact of COVID on Monthly Fuel Sales in California (Gallons)             
Figure 4. 12 Motor Vehicle Fuel Sales     
Figure 4. 13 Jet Fuel Sales           
Figure 4. 14 Aviation Gasoline Fuel Sales
Figure 4. 15 Diesel Fuel Sales     
Figure 4. 16 Scenario 1: Recovery in production variables to January 2020 level by June 2021         
Figure 4. 17 Scenario 2: Recovery in production variables to January 2020 level by December 2021
Figure 4. 18 Scenario 3: Poor recovery in production variables by December 2021     
Figure 4. 19 Overall Change in Emissions (M Mt CO2e): Transportation Fuels             
Figure 4. 20 Absolute Emissions: Suppliers of Natural Gas            
Figure 4. 21 Natural Gas Consumption: Residential Users             
Figure 4. 22 Natural Gas Consumption: Industrial consumers      
Figure 4. 23 Natural Gas Consumption: Electric Power consumers            
Figure 4. 24 2020 Natural Gas Consumption: Residential Users   
Figure 4. 25 2020 Natural Gas Consumption: Electric Power Customers  
Figure 4. 26 2020 Natural Gas Consumption: Industrial Customers           
Figure 4. 27 Sector forecast 2020,2021: Natural Gas Suppliers    
Figure 4. 28 Overall Change in Emissions (M Mt CO2e): Refineries and Hydrogen Plants             
Figure 4. 29 Absolute Emissions: Refineries and Hydrogen Plants
Figure 4. 30 Refinery Production by Fuel Type    
Figure 4. 31 California Monthly Motor Gasoline Refined 
Figure 4. 32 California Monthly Diesel Fuel Refined         
Figure 4. 33 Scenario 1: Recovery in production variables to January 2020 level by June 2021         
Figure 4. 34 Scenario 2: Recovery in production variables to January 2020 level by Dec 2021           
Figure 4. 35 Overall Change in Emissions (M Mt CO2e): Oil and Gas Production        
Figure 4. 36 Absolute Emissions: Oil and Gas Production
Figure 4. 37 California Crude Oil Production; 2020 (Jan-June)      
Figure 4. 38 Scenario 1: Recovery in production variables to January 2020 level by June 2021         
Figure 4. 39 Scenario 2: Recovery in production variables to January 2020 level by Dec 2021           
Figure 4. 40 Overall Change in Emissions (M Mt CO2e): Fossil Fuel Electricity Generation       
Figure 4. 41 Absolute Emissions: Fossil Fuel Electricity Generation           
Figure 4. 42 Annual Electricity Generation by Fuel Type
Figure 4. 43 Annual Electricity Generation by Fuel Type
Figure 4. 44 Historical Emissions of Top Emitters
Figure 4. 45 Annual Electricity generation from Natural Gas Plants           
Figure 4. 46 Overall Change in Emissions (M Mt CO2e): Electricity Imports             
Figure 4. 47 Absolute Emissions: Electricity Importers    
Figure 4. 48 Historical emissions of top emitters
Figure 4. 49 State Electricity Generation| Net Imports and Exports (Source: EIA)      
Figure 4. 50 Historical Imports of Electricity (GWh) by source      
Figure 5. 1 Wildfire emissions as a portion of California’s covered emissions             
Figure 6. 1 YoY Change by Sector: 2019  
Figure 6. 2 YoY Change by Sector: 2020  
Figure 6. 3 Trajectory of Quebec’s Covered and non-covered emissions  
Figure 7. 1 Overall Change in Emissions (M Mt CO2e): Transportation     
Figure 7. 2 Absolute Emissions from the distribution of fuels       
Figure 7. 3 Quebec Emissions by Fuel type          
Figure 7. 4 COVID impact on Quebec Monthly Fuel Sales (million CAD)    
Figure 7. 5 Quebec Annual Crude Oil Production
Figure 7. 6 Scenario 1: Recovery in production variables to January 2020 level by March 2021 
Figure 7. 7 Scenario 2: Recovery in production variables to January 2020 level by Dec 2021      
Figure 7. 8 Quebec Natural Gas consumption by type of consumer (Data for 2020 Q1 &Q2)
 
List of Companies/facilities mentioned:

1. Aluminerie Alouette Inc. (QC)
2. Aluminerie Arvida (QC)
3. Blythe Energy (CA)
4. Calpine Energy (CA)
5. Centrale énergétique Boralex Senneterre (QC)
6. Chevron Products Company (CA)
7. City of Anaheim (CA)
8. Compagnie Westrock du Canada inc. (usine La Tuque) (QC)
9. Complexe Témiscaming (QC)
10. Domtar Inc (QC)
11. Dynegy Moss Landing LLC (CA)
12. Energie Valero Inc (QC)
13. Fibrek S.E.N.C. (QC)
14. Fortress Cellulose Spécialisée inc. (anc.: FPS Canada inc.) (QC)
15. High Desert Power Project LLC (CA)
16. Los Angeles Department of Water and Power (CA)
17. Pacific Gas and Electric Company (CA)
18. PacifiCorp (CA)
19. Phillips 66 company (CA)
20. Raffinerie Suncor Energy, S.E.N.C. (QC)
21. Rio Tinto Alcan inc. (Usine Alma) (QC)
22. San Diego Gas and Electric Company (CA)
23. Southern California Gas Company (CA)
24. Southwest Gas distribution facilities (CA)
25. Sunrise Power Company (CA)
26. Tesoro Refining and Marketing company (CA)
27. Torrance Refinery (CA)
28. Valero Refining Company (CA)

Contact Information

Anant Jain

Analyst

CaliforniaCarbon

insights@CaliforniaCarbon.info