How to Calculate Your Company's Greenhouse Gas Emissions
In these challenging times, many companies, especially from the manufacturing and construction industries, are already committed to addressing the reduction of greenhouse gas emissions. However, in the coming years, the topic will also become increasingly relevant for SMEs from other, less emissions-intensive industries. To keep track of the many terminologies, we have already written a blog article on the topic of CO2-neutral vs. climate-neutral, in which we briefly explain and differentiate between some of the most common climate-related terms.
The purpose of this article is to discuss the important steps in calculating greenhouse gas emissions in companies and how greenhouse gas neutrality can be achieved with the help of CO2 reductions and/or offsets.
When the term "greenhouse gas emission" is used, the first thing that comes to mind is polluters from the transportation sector: cars, trucks, airplanes, etc. burn fossil fuels to be powered and then emit exhaust gases (including CO2). However, the IPCC report (2014) shows that the transportation sector is only the 2nd most emitting greenhouse gas. In fact, the most emissions-intensive sector is the energy sector, which is responsible for almost one-third of total global greenhouse gases. Only in third place is industry.
Share of Emissions by Main Sector in 2014 – Sectoral Greenhouse Gas Emissions by IPCC Sectors
The Greenhouse Gas (GHG) Protocol is the most recognized international standard among experts for greenhouse gas accounting by companies. It distinguishes between three types of emissions, the three "scopes".
- Scope 1 emissions, are "direct emissions" from company-owned or controlled sources.
– emissions generated by certain machines in the company's own production or generated by the company's own fleet of trucks or cars.
- Scope 2 emissions, are also referred to as the "indirect emissions" associated with the purchase of energy.
– Emissions associated with the purchase of electricity from an electricity supplier or directly from the electricity producer. Here, the energy source (coal, natural gas, wind power, etc.) largely determines the level of emissions per kWh.
- Scope 3 emissions, are all indirect emissions that are not included in Scope 2 and that occur within the value chain of the company under consideration.
– Both upstream and downstream stages of the company's value chain can be included.
When reporting under the GHG Protocol, there is a disclosure requirement for Scope 1 and Scope 2 emissions. Disclosure of Scope 3 emissions is voluntary and varies widely depending on which actors and activities in the supply chain are included. Scope 3 emissions are also the most complicated to determine, as there is often a risk of double counting emissions data or lack of access to the necessary data.
A Guide to GHG Emissions Calculation and Greenhouse Gas Neutrality.
As every path to emission reduction and greenhouse gas neutrality is individual and also complex, our experts will be happy to accompany you through the various steps, from the identification of weak points to the successful implementation of solutions, reporting and communication.
Feel free to contact us for a no-obligation initial consultation.