Calculating Greenhouse Gas Emissions: Is Your Company Ready for Changes?

Measuring greenhouse gas emissions (GHGs) is difficult, time-consuming and potentially very expensive. A clear strategy for measuring GHGs needs to be set from the beginning. Measurement is a quantitative exercise; however, some of the questions surrounding where to draw boundaries and the scope of measurement can be a judgment call.  

Furthermore, it can be harder than previously thought to ensure that data is exact.  For example, it can be hard to quantify energy use when a building is shared with another company. The process of collecting data can be complicated further by the constant development of reporting protocols. This regulatory uncertainty means that companies constantly need to keep abreast of the latest developments. 

For example, there was a the recent update to the Department of Environment, Food and Rural Affairs (DEFRA) guidelines on using conversion factors to calculate greenhouse gas emissions.  If you utilize the DEFRA guidelines on calculating greenhouse gas emissions, then the recent changes could affect your company. 

When greenhouse gas emissions are calculated, the process involves recording the amount of energy utilized using live data and then applying the relevant conversion factors. Conversion factors allow organizations to calculate the GHG emissions from a range of activities. Ensuring that the appropriate factors are in place and correctly applied can be a challenge.  

Making Sense of Calculation Guidelines

There are a number of guidelines for calculating emissions, including DEFRA guidelines and the GHG Protocol. DEFRA has released a new set of guidelines for 2014 and the potential exists for companies using these conversion factors to experience significant shifts in both individual emission factors and overall Scope 1, 2 and 3 emissions.  

There are two major changes that will affect companies using the DEFRA guidelines on conversion factors. These changes affect calculating greenhouse gas emissions from electricity and fossil fuels. The guidelines have split electricity and fossil fuel consumption into two clear sections: emissions created through generation and emissions created through transmission and distribution.  

There is an energy cost in moving electricity and fossil fuels around the network, and according to the new boundaries, any energy spent delivering to your door can be considered a third-party emission and so would fall in Scope 3. Looking specifically at electricity emissions over the last 20 years in the UK, around 5 to 10 percent of electricity emissions have come from the transmission and distribution of electricity around the network. Taking this new approach should have no impact on the overall GHG emissions reports, but it will mean a 5 to 10 percent drop under Scope 2.  

The change in the methodology by DEFRA is designed to provide companies with a greater capability to produce more accurate corporate reports that consider not only Scope 1 and 2, but also Scope 3 emissions. It is hoped that these new guidelines will help companies to identify the difference between direct-activity emissions and upstream emissions as well as provide their customers with a better understanding of their overall emissions.  

For companies that have an existing and effectively deployed EHS software, adapting to new DEFRA guidelines should be a reasonably pain-free experience. If the appropriate indicators correctly are set up within the system, the use of these new emission factors should not require significant effort. 

A switch to a more-segmented reporting could require the implementation of dual GHG indicators for each energy source; the first indicator calculating for Scope 1 or 2 and the second for Scope 3. While these changes undoubtedly will require a re-drawing of existing CO2 baselines, the increased GHG accuracy and reporting capabilities are worth the required effort and will provide companies that adopt this new methodology with a more-accurate overall emissions total.

Ailsa Burns writes about sustainability, often focusing on issues related to managing and reporting sustainability data while working for EHS, sustainability and CSR data consulting firm SustainIt. SustainIt  works with companies that need support managing their sustainability data, maximizing sustainability programs by helping performance manage sustainability data.