How to measure GHG emissions: A quickstart guide

Measuring and Managing Greenhouse Gas Emissions (GHG)

Climate change is an increasing concern globally. Companies are being urged to take responsibility for their environmental impact, including their contribution to greenhouse gas (GHG) emissions. Measuring and managing greenhouse gas (GHG) emissions can help companies mitigate risks, identify room for improvement across their supply chains, and demonstrate leadership in sustainability.

However, many organizations may be uncertain about how to begin measuring their GHG emissions. In this article, we’ll give you an overview of how a company should measure its emissions and ensure regulatory compliance.

HOW DO YOU MEASURE GHG EMISSIONS?

The most widely used international accounting tool for government and business leaders to understand, quantify, and manage corporate greenhouse gas emissions is the Greenhouse Gas Protocol. It provides the accounting framework for nearly every GHG standard and program in the world. While there are many intricacies regarding GHG emission measurement, here are the general steps to take.

STEP 1: DEFINE ORGANIZATIONAL BOUNDARIES

For a company to report on its GHG emissions, it must first determine the boundaries of emissions reporting based on its organizational structure. There are two distinct approaches to setting organizational boundaries: equity share and control.

As defined by the GHG Protocol, equity share is when a company accounts for GHG emissions according to its share of equity in the operation. It is typically a reflection of the company’s percentage of ownership of the operation.

With the control approach, a company accounts for 100% of the GHG emissions from operations over which it has control. That means that it does not take into account GHG emissions from operations that it owns but does not control. Control is defined as either operational or financial. The important thing to keep in mind is that various GHG emission reporting goals may require different approaches, with many companies using both.

STEP 2: DEFINE YOUR OPERATIONAL BOUNDARIES

Once you’ve defined your organizational boundaries, you must then identify your operational boundaries for both direct and indirect GHG emissions.

Under the GHG Protocol, emissions are categorized into three categories of GHG emissions, called scopes:

Scope 1: Direct GHG emissions occur from sources that are owned or controlled by the company, for example, emissions from combustion in owned or controlled boilers, furnaces, vehicles, etc.
Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat, cooling or steam.
Scope 3: Scope 3 is all the indirect emissions not covered in Scope 2 that are generated through the value chain of the reporting company, including upstream and downstream activities by other supply chain actors.

Depending on its business goals, the company can decide to account for only Scope 1 and Scope 2, or include relevant Scope 3 to categorize its emissions at the operations level.

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STEP 3: CHOOSE YOUR BASE YEAR

For a company to be able to calculate GHG emission reduction over time, it is important to select a base year during which it has verifiable and comprehensive GHG emissions data. Ideally, businesses should recalculate their emissions each year to assess performance levels and consider any structural changes. This is particularly important if the company needs to meet voluntary public GHG targets or regulatory standards.

Once the base year is chosen, you can then set your GHG reduction targets, either an absolute emissions target or an intensity emissions target.

STEP 4: IDENTIFY GHG EMISSIONS SOURCES

The next step is to identify sources of GHG emissions within the chosen organizational boundaries. Regardless of the products, services or processes a company has, it generates direct and/or indirect GHG emissions typically from 4 sources: stationary combustion, mobile combustion, process emissions and fugitive emissions. You can read the definitions on page 41 of this guide. If your company is just getting started in GHG emissions reporting, your focus should be on identifying and reducing direct emissions sources.

STEP 5: SELECT A CALCULATION APPROACH

To calculate GHG emissions, you need activity data and emission factors. The type of calculation approach depends on data availability and the operations’ nature. Usually, monitoring the actual flow and concentration of greenhouse gasses (GHG) directly isn’t common. Instead, we often estimate emissions based on calculations related to the specific processes at a facility.

The most typical way to figure out GHG emissions is by using emission factors. These are scientifically determined ratios, from researchers or government agencies, that connect the amount of GHGs produced to the activity level at the source of the emissions. They are typically given in terms of the weight of GHGs emitted per unit of energy used, the volume of industrial output, distance traveled, or other relevant units.

Guidelines from the Intergovernmental Panel on Climate Change (IPCC) suggest various calculation methods, from using basic emission factors to direct monitoring. But in many scenarios, especially when direct monitoring is either unavailable or too expensive, we can get pretty accurate emission data from information about fuel use.

The Greenhouse Gas Protocol also offers various calculation tools that are either cross-sector or sector-specific. Many experts agree that a company may require several calculation tools in order to effectively measure GHG emissions.

STEP 6: COLLECT AND CALCULATE

To begin reporting on its total GHG emissions, a company will need to gather data from various sources, such as databases and spreadsheet reports. Different teams can report activity/fuel use data to a centralized department that is responsible for GHG emissions reporting. Alternatively, each department reports and calculates GHG emissions (activity data and emissions factor).

End-to-end traceability platforms, like OPTEL’s Optchain, can simplify data collection and calculation. Acting like a supply chain control tower, it captures GHG emissions data from any digitalized or paper-based source, centralizes it, and calculates your GHG inventory for Scope 1, 2 and 3 emissions in real time. These comprehensive and automatic carbon tracking capabilities offer several benefits. OptchainTM:

Easily collects data from all entities and suppliers (no matter how many!) that fall under your organizational and operational boundaries;
Calculates your products’ carbon footprint;
Selects and changes emission factors as you want to use for your carbon inventory calculations;
Track and monitor Scope 3 emissions thanks to the platform’s seamless connectivity with internal systems your supply chain stakeholders use.

What’s more, Optchain goes beyond GHG emissions reporting. While it can be used as a standalone carbon tracking solution, it can be layered onto other solutions, such as responsible sourcing, recycling, among other sustainability solutions.

Need more information on how to measure your GHG emissions? Want more details on how GHG is calculated?

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“Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain” (EPA, 2023).

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