1. The Key Category Analysis
Mausami Desai
Climate Change Division
U.S. Environmental Protection Agency
UNDP-EPA Webinar
Key Elements of a National GHG Inventory System
April 10, 2013
Good afternoon, evening!
We at EPA are excited to join UNDP for this webinar and hope you have found the webinar useful so far.
We just reviewed national inventory systems and the six EPA templates which focus on building elements of a national system to support development of higher quality national GHG inventories on a more regular basis.
In this presentation,  I am going to review the concept and approaches for conducting a key category analysis. I will also introduce and demo tools that are available to simplify the effort to prepare a key category analysis or KCA.

2. Conduct Key Category Analysis
Why Do a Key Category Analysis?
Conduct Key Category Analysis
IPCC Good Practice (Chapter 7); IPCC 2006 GL (Vol. 1, Ch. 4)
Identifies key categories and informs priorities for National GHG Inventory preparation and improvement
John reviewed this briefly in his presentation, but what is the purpose of a key category analysis?
The concept of “key category analysis” was created by the IPCC as a way to help countries prioritize resources to manage inventory uncertainty and thus improve the quality of their national GHG inventory.
It was first introduced with publication of IPCC Good Practice Guidance (GPG) in 2000 and then again with the 2006 GL.
The key category analysis provides a systematic and objective way for inventory compilers to manage inventory uncertainty.
Inventory uncertainty is a function of the data and methods used in the inventory and is typically lower when emissions and removals are estimated using more rigorous methods in the GL. The higher Tiered, more rigorous methods typically require more extensive efforts with data collection. While it would be ideal to apply more rigorous methods to apply , it is not often feasible to apply the most rigorous methods for all categories.
Once you’ve identified “key categories” you can more easily identify discrete actions to improve estimates and hence reduce overall inventory uncertainty. So, a completed KCA can help you to efficiently guide resources and focus the national inventory improvement plan.
And we’ve listed some of those improvements on this slide.
The good news is that any country that has prepared an inventory can carry out a key category analysis!
Focus resources on Key Categories
Inform methodological choice, e.g. choose more advanced methods (Tier 2, 3)
Obtaining better activity data, developing country-specific EF
Focus QA/QC, strengthen institutional arrangements, etc.

3. Quantitative Approaches Qualitative Criteria
Approaches for Conducting a Key Category Analysis
IPCC defines a key category as:
“a category that is prioritized within the national inventory system because its estimate has a significant influence on a country’s total inventory of greenhouse gases in terms of the absolute level, the trend, or the uncertainty in emissions and removals. Whenever the term key category is used, it includes both source (“emission”) and sink (“removal”) categories.”
National Emissions
Key Categories
How does IPCC define a key category? Here is the definition shown here.
Key categories are those categories, both sources and sinks, that have a significant influence on the level of emissions in particular year, but they can also include sources or sinks that have a large influence on the trend of emissions over time.
Inventory teams probably have a good idea of what the biggest sources and sinks are in your country, such as CO2 from stationary combustion. But there can be many categories not quite as prominent that are still important contributors to total emissions (e.g. CH4 from enteric fermentation or N2O from Agricultural Soils, CO2 from Land converted to cropland). A key category analysis enables you (and inventory teams) to systematically identify these additional key categories.
Key category identification is the foundation for methodological choice during the inventory development process.
The IPCC has defined both quantitative and qualitative approaches to identify key categories.
Which approach is appropriate depends on what inventory information is available, but it is best or good practice to consider both approaches in your analysis.
Quantitative Approaches
Qualitative Criteria

4. Identifying Appropriate Approach for Key Category Analysis
The IPCC provides a decision tree to help countries determine which identification approaches are appropriate. This is the decision tree from the 2006 GL.
Walk through tree briefly use highlighter – if you’ve prepared uncertainty estimates for each category, you should apply both quantitative assessment approaches available.
The tools we will discuss later help applying these approaches.

5. N2O from Agricultural Soils CH4 from Rice Cultivation
Quantitative Approaches for Conducting a Key Category Analysis
Level Assessment
Identify categories that contribute at least 95% of national emissions in the current GHG inventory
Tier 1–sources/sinks are sorted and ranked according to their contribution to total emissions
Tier 2 – same as Tier 1 but accounts for uncertainty
Non-Key Categories
N2O from Agricultural Soils
CH4 from Enteric Fermentation
CH4 from Rice Cultivation
Cement Production
Road Transport
Energy Industries
First, let’s start with reviewing the quantitative approaches to identifying key categories. There are 2 types of quantitative approaches.
The most common quantitative approach for identifying key categories is a level assessment. This is because most countries have one inventory.
A level assessment identifies key categories as those that when summed together in descending order of magnitude, add up to 95% of national emissions for the year of the inventory.
Where does 95% come from? This threshold in the GL is based on evaluation of several inventories and was selected because the analysis demonstrated that ~90% of inventory uncertainty is captured by 95% of emissions.
If you did conduct an uncertainty analysis, you will be able to also prepare a Tier 2 or Approach 2 analysis, weighting the analysis with uncertainty. When including uncertainty, same but you sum contribution of emission categories in descending order of magnitude that until they add up to 90% of emissions.
[Note for readers - Under all approaches, key categories are determined in terms of their contribution to the absolute level of national emissions and removals to current emissions or the trend.]

6. Understanding the Mechanics of the
Quantitative Approaches for Conducting a Key Category Analysis
Understanding the Mechanics of the
Key Category Analysis
Step 1) List all Inventory categories
Emission Category-CO2 X Tonnes
Emission Category-CO2 Y Tonnes
Emission Category-CH4 Z Tonnes
Removal Category-CO2 A Tonnes
Emission Category-N2O B Tonnes
….Emission Category…
I am not going to review in detail the formulas or methods provided by IPCC in 2006 (or GPG) for preparing a level assessment, given the time we have, but we do recommend you review them following this webinar.
Here I am just going to simplify and summarize the concepts behind the GL equations for completing the level assessment.
As you will see, it is a fairly logical approach to identifying key categories.
Step 1 is starting with your inventory results, and to list the categories and subcategories as recommended by the IPCC

7. Step 2) Sort in descending order by contribution to total (absolute)
Quantitative Approaches for Conducting a Key Category Analysis
Step 2) Sort in descending order by contribution to total (absolute)
Emission Category-CO2 Y Tonnes 40%
Emission Category-N2O B Tonnes 25%
Emission Category-CH4 Z Tonnes 15%
Emission Category-CO2 X Tonnes 15%
Removal Category-CO2 A Tonnes 4%
….Emission Category…
Step 2 is calculating contribution of each category in absolute % terms to the total inventory and then sorting and ranking the contribution of each category in descending order as shown here.

8. Quantitative Approaches for Conducting a Key Category Analysis
Step 3) Sum cumulative contribution of sources/ sinks (absolute in descending order) until you reach 95%
Emission Category-CO2 Y Tonnes 40%
Emission Category-N2O B Tonnes 25%
Emission Category-CH4 Z Tonnes 15%
Emission Category-CO2 X Tonnes 15%
Removal Category-CO2 A Tonnes 4%
…Emission Category…
Key
Categories
Sum
95%
Finally, Step 3 involves then summing the cumulative contribution of each category in descending order as show and those categories that cumulatively up to 95% should be identified as key.
The IPCC GL also provides templates for application of the mathematical approaches within a spreadsheet and we have used this as a basis for developing the tools.
There are tools we will discuss later that help applying these approaches.

9. Quantitative Approaches for Conducting a Key Category Analysis
II. Trend Assessment
Identify categories that have trend that is significantly different from the trend of the overall inventory, these categories may not be large enough to be identified by the level assessment.
Tier 1– sources and sinks are sorted and ranked according to contribution to the inventory trend
Tier 2 – same as Tier 1, but accounts for uncertainty.
So we’ve reviewed one quantitative approach to identifying key categories, specifically how to identify categories that have a significant influence on emissions in a given year.
If inventory teams have data for at least 2 years, or you have more than 1 inventory, you also can conduct a trend assessment. These are categories that contribute at least 95% of national trend in emissions (in descending order).
The trend analysis identifies categories whose trend diverges from the trend of the overall inventory and might be missed by just the level assessment.
Again, if inventory teams have conducted an uncertainty analysis, they can conduct a Tier 2 KCA trend assessments.
Again, I am are not going to review in detail the formulas or methods provided by IPCC in 2006 (or GPG) to but we recommend you review them. The concept for the trend analysis is similar to that for the level analysis.

10. Qualitative Criteria include indentifying categories where:
Qualitative Approach to Conducting Key Category Analysis
Qualitative Criteria include indentifying categories where:
Mitigation techniques and technologies applied
Expected emission growth
Uncertainties not yet quantified, but presumed high
Not yet included in inventory (completeness)
Other criteria
UNFCCC CGE training materials
UNDP Managing the GHG Inventory Process
The quantitative approaches we’ve just discussed depend on scope and completeness of the current or previous GHG inventories and may not identify all key categories that should be prioritized in your inventory planning process.
The IPCC guidelines outline some qualitative approaches to identifying key categories. Expert judgement help with qualitative assessment.
Here we’ve listed some of the criteria you can use to qualitatively assess key categories:
The first example, if emissions from an emission category are being reduced significantly through the use of Mitigation Techniques and Technologies, it is good practice to identify these categories as key because it is important to closely reflect the mitigation effects in the inventory estimates.
Next, if inventory agencies expect emissions from a source category to grow significantly in the future or expect removals to decline, they should be considered as key categories. You should consider economic changes anticipated in your country that may impact trends within certain sectors, and then subcategories.
IF inventory agencies are not explicitly taking uncertainty into account by using the Tier 2 method, they may want to identify the most uncertain emission or removal categories as key. This approach will help most in terms of really reducing overall inventory uncertainty, by focusing efforts on improving estimates of highly uncertain categories.
Finally, if there are emission categories that have not yet been included, you may want to consider whether any of these qualitative criteria apply, and if so they could be considered potential key categories.
The CGE training materials and the UNDP manual “Managing the GHG Inventory Process” also adds potential other considerations for key categories. The manual also provides some general rules of thumb for identifying key sources.

11. Other General Consideration for Conducting Key Category Analysis
With appropriate disaggregation, the KCA can highlight important source and sink subcategories:
Use subcategory disaggregation suggested by IPCC
IPCC Good Practice Guidance, Ch. 7, Table 7.1
IPCC 2006 Vol. 1, Ch. 4 Table 4.1
Evaluate GHGs from a single category separately
CO2 from Road Transportation
CH4 from Road Transportation
N2O from Road Transportation
Important to include sub-categories for larger emissions sources:
Ag/LULUCF
Land converted to Cropland
Land Converted to Grassland
Etc.
Fossil Fuel Combustion (FFC) in the Energy Sector
Splitting Stationary FFC into Energy vs. Manufacturing vs. Residential
Disaggregate further by fuel types
Splitting Transport into Road Transport vs. Aviation vs. Water-borne
Purpose of a KCA is to prioritize inventory categories, so it is important to make sure your inventory is sufficiently disaggregated so that is helpful. If analysis is at aggregated level, it will be less helpful in directing resources to more discrete improvement plan.
READ slide

12. National System Templates
Key Category Analysis
Tools: Template Workbook and ALU
To assist inventory compilers/coordinators in performing your key category analysis we have created two tools:
First, you can follow the template to take you through the analysis and understand how to document the results
To conduct the analysis, you can use the Key Category tool we have created. This tool works in Microsoft Excel or OpenOffice, and is available on the EPA website.
The IPCC GL also provides templates for application of the mathematical approaches in a spreadsheet and we have used this as a basis for developing the tools.
National System Templates
Template 5 is the Key Category Analysis
Key Category Tool
Helps calculate Key Categories for you using Microsoft Excel or OpenOffice Calc

13. Where to Obtain the Key Category Analysis Tool
Download Link
The link to download the tool from our website is listed here and once you get to the webpage, scroll down half-way down the page in the template workbook section.
We will distribute the tool and demo after this presentation as well.

14. Capable of all Quantitative Approaches
Background on the Key Category Analysis Tool
Consistent with 2006 GL
Improves and corrects for errors in IPCC Good Practice Guidance Ch. 7
Capable of all Quantitative Approaches
Tier 1 Level and Trend Analysis
Tier 2 Level and Trend Analysis
Generates summary table to insert in KCA template

15. Recommended materials: Review this presentation
Preparing to Conduct Key Category Analysis
Recommended materials:
Review this presentation
Review IPCC GL as appropriate:
IPCC Good Practice Guidance Ch. 7 – Methodological Choice and Recalculation
IPCC 2006, Vol. 1, Chapter 4 – Methodological Choice and Identification of Key Categories
Review EPA documentation template
Collate Inventory summary table consistent with categorization recommended by the IPCC GL

16. Activity Data Uncertainty Emission factor uncertainty
Preparing to Conduct Key Category Analysis: Sample Inventory
Sector
Category
Gas
Base year (1990)
Current year (2000)
Activity Data Uncertainty
Emission factor uncertainty
Energy Gg %
1A1
Energy Industries
CO2
11,458
16,000
10% 5%
N2O
CH4
1A2
Manufacturing Industries and Construction
6,537
8,200 1 11
1A3b
Road transportation
13,257
15,057
15% 2
Residential
2,999
3,344 3% 70 73
Industrial Processes and Product Use
2A1
Cement Production
4,500
4,699
2B5
Carbide Production
2C1
Iron and Steel Production
4,973
4,831
2C4
Magnesium Production
1,355
1,500 7%
Aluminum
924
1,025
12%
CF4 -
C2F6
Agriculture, Forestry and Other Land Use
3A1
Enteric Fermentation
371
368
50%
3A2
Manure Management
155
164
120% 6
3B1a
Forest Land Remaining Forest Land (Emissions)
57,549
65,450
20%
25%
Forest Land Remaining Forest Land (Removals)
-85,361
-69,323
3B3b
Forest Land Converted to Grassland (Emissions)
37,373
40,655
Waste 4A
Solid Waste Disposal
232 4b
Biological Treatment of Solid Waste 4 4D
Wastewater Treatment and Discharge: Domestic 65 40
27%
35%

17. Filling in the Key Categories Table
Again, once you have completed the KCA using the tool, you should document the analysis and you are encouraged to report and include this in the inventory reported as part of your next national communication.
In the template, teams can document
Which KCA approaches were conducted
What the key categories are
Their % contribution to total emissions or the trend in emissions
Any improvements that are needed
The KCA tool saved with your analysis and the completed template also provide archives for future inventories.

18. How this Tool and Template Will Help!
Key Category Analysis
How this Tool and Template Will Help!
In this tool and template:
Identify all key categories of GHG emissions
Rank emissions sources
Describe and document how you completed the key category analysis (KCA)
Help the inventory team:
Key Category Summary
This tool and template gives an inventory team a place to:
Identify all key source categories of GHG emissions in their country
Rank emissions sources in terms of contribution to national totals and trends using methods from the IPCC 2006 GL.
Describe and document how they completed the key category analysis
Application of the tools will help the inventory team :
Conduct a Key Category Analysis
Perform an optional uncertainty analysis
Identify the most important sources of GHG emissions in their country
Communicate key categories to the UN
Identify areas that should be focused on for improving estimates in the future.
Conduct a KCA
Perform an optional uncertainty analysis
Identify the most important GHG categories
Communicate key categories to the UN
Identify areas for improving estimates

19. Thanks For Your Attention!
Mausami Desai
I hope you have found this overview and demo helpful.
We hope you have a better understanding of the purpose and approaches for preparing a key category analysis.
Thank you so much for you attention, and I’d be happy to answer any questions.
U.S. EPA Inventory Preparation Tools