How to Calculate and Measure Greenhouse Gas Emissions

How to calculate Greenhouse gas emissions: A Guide To Measuring Greenhouse Gases

Greenhouse gases (GHGs) are gases in the earths atmosphere that absorb and trap heat from the sun. Without the presence of GHGs, the earth could not sustain its liveable temperature. However, with rapid industrialisation of the global economy and the resulting release of great volumes of man-made GHGs, the planet has experienced abnormal levels of warming.

As GHGs accumulate, prompting a rise in temperatures, there has been a significant shift in the climate system and weather patterns. This shift has the potential to devastate economic and social structures and human health. Therefore, it is critical that corporate and public bodies seek to limit the amount of GHG they produce.

The first step in this process is to measure GHGs from all operational activities. By getting clear insights into a company’s GHG emissions, relevant stakeholders can begin to make effective changes.

Overview of GHGs

The Kyoto Protocol, a landmark international agreement, committed its signatories to reduce the emissions of seven GHGs. The seven gases, collectively known as the Kyoto basket, all contribute to climate change, however, some have a higher warming potential than others.

Carbon dioxide
Carbon dioxide (CO₂) is the GHG primarily responsible for climate change. Not due to its potency but because it is the most abundant GHG in the atmosphere. CO₂ is emitted from a number of different sources including: sites burning fossil fuels, damaged natural carbon sinks such as forests after wildfires and eroded soil beds.

Carbon can be removed through sequestration. This is a process whereby biological matter, such as soils and trees, absorb CO₂ as part of their natural carbon cycle.

Methane
Methane (CH₄) gas comes from livestock farms, natural gas systems and landfill sites. Although methane has a shorter lifespan in the atmosphere than CO₂, it is more efficient at trapping radiation. Therefore, the comparative global warming potential is 25 times greater than CO₂ over a 100 year period.

To reduce methane emissions, industrial plants and waste management sites have introduced methane capture technologies.

Nitrous oxide
40 percent of Nitrous oxide (N₂0) emissions globally come from human activities frequently related to the agricultural sector. The impact of a single pound of nitrous oxide is 300 times the impact of carbon dioxide. Also, once released, the gas can last over 100 years in the atmosphere.

Fluorinated gases (F-gases)
Fluorinated gases are man-made gases. They do not harm the ozone layer but are powerful GHGs with a higher warming effect than CO₂. There are three main F-gases in the Kyoto basket: hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF₆) and nitrogen trifluoride (NF₃).

Since 1990, there has been an increase of 284 % in emissions of hydrofluorocarbons, a compound commonly employed for refrigeration and air conditioning purposes. This large spike has been attributed to the use of hydrofluorocarbons as a substitute for ozone depleting substances.

Despite the range of GHGs, it is standard practice when measuring GHGs to convert all emissions to CO₂ equivalent (CO₂e). Each gas is measured, multiplied by its global warming potential and then aggregated to give total GHG emissions in CO₂ equivalents.

The environmental impact of GHGs

Assessments from the IPCC (Intergovernmental Panel on Climate Change) have outlined the extent to which higher concentrations of GHGs affect the environment.

The series of reports warn of the growing frequency of extreme weather events. The extreme weather includes both intense heat waves and, at the other end of the spectrum, periods of heavy rainfall. These events will naturally lead to increasing droughts, wildfires and floods respectively as well as causing destruction to infrastructure.

The changing weather patterns present a number of risks to economic activity. The agricultural sector is particularly vulnerable. The sector has had to contend with unseasonably warm temperatures and drought conditions, threatening worker safety and crop performance.

With the likelihood of an over one degree rise in global temperatures, certain communities may be displaced entirely.

Why is measuring greenhouse gas emissions crucial for mitigating climate change?

The key to meaningful climate action is to measure GHG emissions. In the absence of an accurate measurement, companies will remain in the dark about where to implement changes.

Any consequential financial or strategic decision relies on access to comprehensive data. Environmental decisions are no different. The reporting process gathers the information stakeholders need and eliminates guesswork and assumptions.

One common assumption, hindering many mitigation efforts, is that energy use is the primary driver of corporate emissions. Energy use generally accounts for less than half of a company’s GHG emissions. In fact, for many, energy consumption amounts to only 20 percent of total GHG output.

Less widely recognised sources of emissions include: employee commuting, business travel, paper use and external web hosting.

Besides providing a path to reducing emissions, the reporting process offers companies a number of secondary benefits.

Firstly, measuring GHG emissions helps companies identify hidden inefficiencies across their operations. These inefficiencies are as much a financial burden as they are an environmental one. For example, certain facilities may use disproportionate amounts of energy compared to others, leading to higher costs.

In addition to managing costs, reporting companies have the opportunity to gain an advantage over their competitors.

The heightened awareness around sustainability has had a clear impact on the markets and consumer behaviour. As well as increasing legislation in this area, there is a growing desire amongst consumers and investors to support companies engaging in good environmental practices.

What are the different methods of measuring GHG emissions?

GHG emissions, for the purposes of measurement, are divided into three categories referred to as scopes. These scopes were developed through the Greenhouse Gas Protocol which seeks to harmonise the approach to corporate reporting worldwide.

The distinction between the three scopes relates to direct and indirect emissions. Direct emissions originate from operations under the reporting company’s ownership. Indirect emissions come from a source that is controlled by a separate third party or from spillage effects – namely transmission and distribution losses.

Scope 1

Scope 1 emissions are direct emissions from the reporting company’s owned facilities and other operations. For example, emissions from consuming combustible fuels for a fleet of vehicles.

Scope 2

This grouping captures indirect emissions. This means emissions from the use of energy which typically comes from a utility provider outside of the reporting company’s ownership structure. Standard Scope 2 emissions include heating and cooling buildings.

Scope 3

The final category for emissions measurement covers all the remaining activities beyond the range of the first two Scopes. This includes all the indirect emissions not contained in Scope 2. Such as employee travel, waste generation and purchased goods and services.

What are the basic steps for calculating GHG emissions?

Determining the scope of GHG reporting
The first task for stakeholders is to define what activities and operations they wish to include in their GHG inventory.

Under the Greenhouse Gas Protocol there are two approaches for determining what constitutes the reporting company going forward. The approaches include equity share or the control approach which breaks down into two further categories – financial control and operational control.

The equity share approach compels the reporting company to account for all the emissions from operations in which they have an ownership stake. For example, if a company has 15 percent equity in their office building, they will only measure and report 15 percent of GHG emissions.

The control approach – the most commonly adopted approach – accounts for all GHG emissions from operations which the reporting company has either operational or financial authority over.

Collect activity data

Once an appropriate approach has been selected, the reporting organisation will begin to collect GHG emissions data.

For Scope 1 and Scope 2 emissions, stakeholders will need to determine what sources in each scope apply to their operations. For example – do employees have access to a company car? Do the operational assets run on natural gas, electricity or a combination of both? Utility bills and other financial statements will give details of the consumption in these areas.

For Scope 3 data, although reporting Scope 3 is currently not compulsory, organisations may choose to distribute a company-wide survey. A survey can elicit emissions data on commuting habits – whether an employee takes a car or public transportation – business travel itineraries and working from home schedules or further purchased goods and services not related to scope 1 and 2 activities.

Calculate emissions
After collection, a quality assurance check is performed to verify the accuracy of the GHG data. With the approved data sets, sustainability analysts can apply the raw data to the corresponding emissions factors and receive the final calculation.

An emissions factor is a value which illustrates the amount of GHG emissions produced by a given activity. It is typically expressed in kilograms (kg) of GHG per unit of activity.

For example, when a car drives one kilometre it produces 0.16kg of CO₂ (UK figures). To calculate the total emissions for a company car, analysts would multiply the number of completed kilometres – over the predetermined reporting period – by the relevant emissions factor.

Compliant reporting

Mandatory sustainability reporting legislation is being introduced around the world. Previous disparate reporting structures are being replaced by consistent, transparent and standardised data requirements. Mandatory compliance reporting currently depends on company size and location. For example, in the UK, companies with more than 500 employees have to comply with TCFD (Task Force for Climate-Related Financial Disclosures) requirements from FY23/24. In the US, listed companies will shortly need to comply with the US SEC requirements. In the EU, companies will need to comply with EU CSRD. Fortunately all these different requirements are all based on ISSB guidelines so are broadly the same.

Companies can also voluntarily report to the CDP who will grade them based on their submission.

How Ecometrica can help

We are accredited experts in climate metrics and since 2008 have been enabling organisations across the globe to effectively and transparently disclose their climate impact in accordance with the latest standards. Our Sustainability Reporting Platform is powered by the largest database of emissions factors, enabling you to be confident in the calculations. The expert guidance of our Sustainability Analysts will make sure your data is robust and accurate, ensuring it is ready to be audited, as well as producing all the reports necessary for compliance and disclosure. We closely monitor changes to regulated requirements, enabling our clients to stay ahead of the curve in an ever-evolving sustainability disclosure requirement landscape.