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Fundamentals of GHG Accounting

by | May 2, 2022 | ESG

Introduction & Overview

Many companies are beginning to consider what to do to manage their greenhouse gas (GHG) emissions for various reasons, including reducing their environmental impact, preparing for regulation and evolving disclosure requirements, increasing energy efficiency, and/or establishing a reputation as an environmental leader.

The first step in analysing risks, lowering emissions, and measuring performance are to assess the sources and emissions (e.g., carbon footprint). Furthermore, many firms are voluntarily publishing data on their emissions in corporate social responsibility (CSR) reports, and an increasing number of organizations are determining and reducing their emissions. In the meantime, the scope of GHG emissions calculated under the established Accounting and Reporting System, CSR reporting, GHG accounting, and the like is normally restricted to the reporting company’s emissions, so contributions through energy-saving product lines and the spread of lower greenhouse gas-emitting products are not reflected when businesses evaluate their emissions.

Large, powerful corporations are expected to promote efforts to decrease emissions at small and medium-sized businesses by reducing emissions in their supply chains. In fact, in contrast to measures between large and small businesses, it is expected that when major businesses band together, they would be able to accomplish higher emissions reductions than they could have done individually. As a result, GHG accounting from the perspective of the supply chain is intended to help organizations coordinate their activities.

Organizational Boundaries

Organizational boundaries aid in determining a company’s direct carbon impact. The World Business Council and World Resources Institute for Sustainable Development established 2 different boundary-setting methodologies known as the WBCSD/WRI GHG Protocol in their study on carbon accounting to assist corporations in understanding and determining organisation boundaries for GHG accounting. The equity shares strategy and the control approach are the two options.

According to the control method, you should measure emissions for all operations over which you seem to have realistic control, whether at your own or leased facilities. The equity share concept proposes that you assess emissions from facilities in which you have a stake. The most important piece of advice is to pick the most thorough method and then use it regularly. Clean Air-Cool Planet, for example, has four offices in the Northeast; these offices are effectively leased suites of rooms that take up a fraction of larger office space.

It actually makes sense for CA-CP to use control-based instead of ownership (equity share)-based limits to produce a comprehensive inventory. Many colleges and universities, on the other hand, possess real estate related to college activities but not directly controlled by the institution, such as student or employee housing. When faced with the decision of whether to include these facilities, which are owned by the university but managed by the tenants, the college must decide whether it will obtain a clearer overview of its climate impact by consistently applying organisational boundaries implementation of control approach, or equity share approach, across the institution.

Operational Boundaries & Scope 1,2, 3 Emissions

To achieve carbon neutrality, you must first understand and articulate the breadth of your direct effect. An organisation must construct an operational border after identifying its organisational boundary, which will define the extent of three categories of GHG emissions inside that organisational boundary.

Scope 1: Direct Emissions

If a company retains direct control over energy production or uses fossil fuels in its activities, it must report under Scope 1. Direct GHG emissions originate from sources owned or managed by the firm, such as combustion in owned or operated boilers, furnaces, autos, and other vehicles, as well as emissions from chemical manufacturing in owned or controlled processing equipment.

Scope 2: Emissions from Purchased Power

Under Scope 2, when a corporation consumes energy, it must disclose the emissions connected with that consumption. The extent of emissions is usually easy to determine, and metres are frequently used as a reference. The use of bought power in the company’s own or controlled equipment or operations might result in indirect GHG emissions.

Scope 2 emissions (purchased electricity) are considered part of a company’s current footprint and therefore must be accounted for when building a carbon neutrality plan, despite the fact that they are generated off-site by utility providers. Scope 2 estimates based on market data are a wonderful method to see where you might be able to run more ecologically friendly than the grid currently permits.

Scope 3: Indirect Emissions

Scope 3 emissions are still considered optional when it comes to reporting. These emissions are produced as a result of the firm’s operations, but they arise from sources that the firm does not own or regulate, such as supplier activities.

In order to assess the breadth of emissions associated with their activities, companies will almost probably be obliged to do a lifecycle analysis and identify the whole supply chain. Even if you’re not going to use Scope 3 categories, it’s a good idea to consider how to compute them and which one would be the most beneficial.

Tracking, Calculating, Reporting and Managing

Businesses may measure their operational efficiency and sustainability by measuring the greenhouse gas (GHG) emissions created by the power they use to run their activities. Tracking and reporting emissions allows your firm to be more transparent with its investors, clients, and the general public, improve efficiency and reduce wasteful energy expenses, and get a better understanding of energy use patterns. Average Annual Emissions Factors and Real-Time Emissions Data are the two main methods for tracking your emissions.

Average Annual Emissions Factors

It calculates how much GHG the grid emits over the course of a year. Because the grid’s emissions intensity fluctuates substantially over the year, this technique is less reliable when comparing emissions reductions at various times in time.

Real-time Emissions Data

Emissions in Real-Time Data is quickly becoming the preferred method of assessing GHG emissions. Real-time data, generated by interval metres and/or smart metres, lets you see what is happening in your location instantly. As a result, it is far more efficient in terms of building management than monthly utility bill data. Not only that, but real-time data enhances the accuracy of your GHG accounting and makes demand-response more effective.

Calculating GHG emissions: Emissions calculation is a multi-step procedure. Only after paying close attention to quality control concerns and the essential activity data can an accurate and meaningful inventory be created. Then, and only then, should emissions be calculated. For assistance on the whole inventory preparation process, GHG accounting and calculation is based on and particularly suggests referring to the GHG Protocol’s Corporate Standard.

The GHG Protocol suite of tools allows businesses to create thorough and reliable inventories of their greenhouse gas emissions. Each tool is based on industry-recognized best practices that have been thoroughly tested.

It’s no surprise that tracking, calculating, reporting, and managing GHG emissions (scopes 1, 2, and 3) is becoming increasingly important to many businesses. As a framework, the GHG protocol report includes a number of requirements for various organisational levels. These can aid in the measurement and attainment of your sustainability mission and goals. Your indirect, direct, and supply chain emissions are important indicators to track as part of your sustainability plan and reporting. And in order to implement your sustainability plan, you must first identify your environmental hotspots and viable emission-reduction options.

Everything you need to know about tracking and calculating GHG emissions: https://www.env.go.jp/earth/ondanka/supply_chain/gvc/en/files/GuideLine.pdf

Data Collection: Quantifying GHG Emissions

Data collection is an important aspect of a country’s national inventory protocols for estimating and reporting greenhouse gas emissions and reductions on a regular basis. Wherever feasible, existing standard statistical organisations and other official data should be used to develop systematic, formalised data collecting. Data gathering best practices are customised to country circumstances and assessed on a regular basis.

Finding and processing existing data (i.e., data produced and maintained for other statistical or administrative purposes beyond the inventory) as well as creating new data through surveys or measurement campaigns are all part of the data gathering operations. Interactions between inventory compilers and stakeholders will occur during data gathering for the GHG accounting.

Even though much of the data is publicly available on the internet, these exchanges may be the most time-consuming aspect of the emission inventory compilation process.

A yearly data feed will be required from a network of data suppliers. Depending on national conditions, this network may encompass national statistics agencies, ministries, international organisations, academics, economic sectors such as industry, commerce, transportation, and service sector, and others. Maintaining data flows, enhancing estimates, creating estimates for new categories, and/or replacing existing data sources when those currently utilised are no longer available are all tasks linked to data gathering.

Steps in Data collection:

Fundamentals of GHG Accounting

Calculating Annual Emissions

GHG calculation in GHG accounting for each GHG-emitting operation at any plant can be done by following these instructions. Unless otherwise specified, each column in your spreadsheet will most likely correspond to each step listed below. Extra columns in the spreadsheet can and should be included to reflect additional procedures or information unique to your business.

Step 1: Identifying the pollutants

The Greening Chemistry tab enables users to calculate the CO2 equivalence of over 200 substances. Chemicals in the list include those specified by both the International Panel on Climate Change (IPCC) and the EPA’s GHG Reporting Rule. Carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4), chlorofluorocarbons (CFCs), multiple hydrofluorocarbons (HFCs), numerous perfluorocarbons (PFCs), and sulphur hexafluoride are among the compounds (SF6). Each of these substances’ CAS numbers and global warming potentials is also provided by the programme.

Step 2: Emission factors

Specify the emission factor for each pollutant, with the exception of CO2e, HFCs, and PFCs, which are each given as a sum of many separate compounds. Specify the emission factor for each chemical component for HFCs and PFCs. Remember to provide the necessary units when using uncontrolled emission factors.

Step 3: Global Warming Potential

Except for CO2e, list the “global warming potential” (GWP) of each pollutant.

Step 4: Mass emission rate

Calculate the Mass Emission Rate in lb/hr for each pollutant except CO2e. Using the following formula, compute the emission rate:

  • Emission factor (lb/unit) x capacity (unit/hr) = mass emission rate (lb/hr).

Step 5: Maximum uncontrolled mass emission

Determine the maximum uncontrolled mass emissions of each pollutant, except CO2e, using the following method:

  • Maximum annual uncontrolled mass emissions (tonnes) = mass emission rate (lb/hr) x 8760 (hrs/yr.) x 0.0005 (tons/lb)

Step 6: Calculate Maximum uncontrolled CO2 equivalent

  • Max uncontrolled CO2e (tons/yr.) = [1 x uncontrolled CO2 (tons/yr.)] + [25 x uncontrolled CH4 (tons/yr.)] + [298 x uncontrolled N2O (tons/yr.)] + [22800 x uncontrolled SF6 (tons/yr.)] + [GWPPFCn x uncontrolled PFCn (tons/yr.)] + [GWPPFCn x uncontrolled HFCn (tons/yr.)]

Step 7: Pollution control Efficiency

Indicate the effectiveness of pollution control. Each pollutant’s efficiency should be stated. If no control exists for a certain pollutant, enter “zero” as the control efficiency. Do not enter a CO2e pollution control efficiency.

Step 8: Maximum Controlled mass efficiency rate

  • Max. controlled mass efficiency rate [lb/hr] = Mass emission rate (lb/hr) x (100 – Pollution control efficiency) ÷ 100

Step 9: Maximum Controlled mass emissions

  • Max. controlled mass emissions [tons/year] = Maximum Controlled Mass Emissions (tons/year) x (100 – Pollution control efficiency) ÷ 100.

Step 10: Maximum Controlled CO2 Equivalent

  • Max controlled CO2e (tons/yr.) = [1 x-controlled CO2 (tons/yr.)] + [25 x controlled CH4 (tons/yr.)] + [298 x controlled N2O (tons/yr.)] + [22800 x controlled SF6 (tons/yr.)] + [GWPPFCn x controlled PFCn (tons/yr.)] + [GWPHFCn x controlled HFCn (tons/yr.)]

Step 11: Calculate Actual emissions

To get mass emissions in tonnes per year using the preceding formulae, replace real operating parameters and/or hours per year run for the maximum capacity. Then, as indicated in Step 10, multiply these computed real mass emissions by the GWP for each pollutant and add them together to yield CO2e.

Step 12: Limited controlled mass and CO2 emissions

The restricted regulated emissions are computed by taking into consideration all of the operational constraints of the source you intend to comply with within this application. These restrictions include restrictions on the number of hours of operation and the amount of material consumed.

GHG accounting Calculations tools: https://ghgprotocol.org/calculation-tools

 

Author

  • The author has done a master's in Environmental science and is currently working as chief Environmental Advisor with New Delhi State Government.

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