Demystifying Greenhouse Gas Emissions: A Guide to Scope 1, 2 and 3

By Harry Cann, Carbon & Energy Consultant.

As the globe grapples with the challenges presented by climate change, it has become essential for organisations to firstly quantify and then take steps to mitigate their greenhouse gas (GHG) emissions.

The pressure to take action has intensified amid increasing regulatory reporting requirements, such as SECR and TCFD, and growing expectations among stakeholders.

Here, we will be covering the basics of measuring GHGs, focusing on scope 1, 2, and 3 emissions.

The figure below outlines the three emission scopes and the associated greenhouse gases which are currently reported on:

• Carbon dioxide (CO₂)
• Methane (CH₄)
• Nitrous oxide (N₂O)
• Hydrofluorocarbons (HFCs)
• Perfluorocarbons (PFCs)
• Sulphur Hexafluoride (SF₆), and
• Nitrogen Trifluoride (NF₃)

Since all these gases have different global warming potentials, these gases are standardised into one metric known as carbon dioxide equivalent (CO₂e) when completing a GHG inventory.

Scope 1 Emissions: Direct Emissions

Scope 1 emissions are a direct result of operational activities which occur from sources owned or controlled by an organisation. These emissions are usually the most straightforward emissions to quantify. The following are examples of Scope 1 emissions.

• Fuel combustion: The most common emissions from fuel combustion are typically from natural gas in heating systems and various fuels in company owned vehicles. This includes the use of fuels to generate electricity, but this does not include purchased electricity.
• Industrial processes: Emissions from industrial activities such as chemical reactions and any emissions from manufacturing equipment.
• Fugitive emissions: these are most commonly emissions from HFCs in refrigeration or air conditioning units.

Scope 1 emissions are usually quantified using emission factors which are standardised values for each fuel type and gas type. However, it is essential for companies to have accurate measuring and tracking systems in place to accurately calculate the total fuel consumption.

Scope 2 emissions: Energy indirect emissions

The emissions associated under this scope refer to the generation of purchased electricity, heat, steam, or cooling. Calculating Scope 2 emissions can be done in two ways, using the emission factor for the location it is being consumed (location-based) or calculating emissions based on the electricity that organisations have chosen to purchase (market-based). Both methodologies require the total electricity consumption in kWh.

A benefit of reporting under the market-based methodology is it allows for companies to utilise the purchasing of renewable electricity, through instruments such as Renewable Energy Certificates (RECs). By ensuring electricity consumption is sourced from renewable generation, emissions can be reported as zero under the market-based methodology.

Scope 3 emissions: Other indirect emissions

Scope 3 emissions are the broadest category and include all other indirect emissions, both upstream and downstream, that occur in the value chain of an organisation.

Scope 3 quantification contains 15 emission categories which relate to specific mechanisms of a business. The 15 emission categories, seen in the figure above, cover emissions from everything a company purchases, all business travel and employee commuting, freight activities, and many other areas.

Importantly, Scope 3 emissions usually account for more than 90% of the total GHG inventory, which is why more importance must be placed on reducing Scope 3 emissions if we are to meet our Net Zero aspirations.

A wide range of data and information is required to calculate Scope 3 emissions, ranging from financial data to product-specific emission factors which are often a result of supplier engagement programmes. Typically, the first step when calculating Scope 3 emissions is to undertake a screening assessment to identify where your emission ‘hotspots’ are. From this assessment a plan can be formulated to focus effort, to improve the underlying data quality and enhance the accuracy of the Scope 3 calculations.

As better data becomes available, the complexity of Scope 3 calculations can increase, often requiring complex models to quantify emissions more accurately.

At Envantage we work in partnership with our clients, listening closely to what they want to achieve and bringing our knowledge and experience of carbon services to help secure the best possible solution for their organisations. We have completed Scope 3 quantifications for a wide range of companies including Plastek and our clients tell us they like the fact that they know the people who are delivering their services, and that we spend time getting under the skin of their business. By working closely with our clients in this way, we can ensure their carbon strategy is tailored to meet their individual needs. You can read more of our case studies here.

Why should your business be measuring GHG emissions more accurately?

Understanding and quantifying greenhouse gas emissions is a critical step in the journey towards sustainability and climate action. This journey has financial, reputational and direct business benefits through the protection of existing customer relationships and the development of new ones.

By measuring and reporting emissions accurately and more comprehensively, organisations can identify opportunities and set targets for emissions reduction, and contribute to a more sustainable future. As the world continues to address the challenges of climate change, a clear understanding of GHG quantification across all scopes is essential for making informed decisions and taking meaningful action towards a low-carbon future.

To see how we can help you quantify your GHG emissions, please get in touch with one of our experts, using hello@envantage.co.uk
or 0161 448 7722.

Categories

• Carbon
• Envantage

Tags

• Carbon reduction
• Updates

Share this article