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Carbon footprinting

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The easy introduction into carbon footprinting.

The easy introduction into carbon footprinting.

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  • 1. Carbon footprinting Greenhouse gas inventories made easy Henk Harmsen, 2008 carbonmetrics.com
  • 2. Voluntary carbon reductions T he measures to reduce emissions of greenhouse gases are not sufficient to revert or even stabilize climate change. Therefore more, and more stringent ance of these protocols require the reporting organi- zation to make choices on scope and the baseline year against which future emissions are measured. The reduction measures may still not be enough to meet the target of your company. In that case you can offset emissions by buying emission reductions. These measures will be introduced. This brings a price to the Setting a emission reduction target means that you reductions can come from a variety of emission reduc- emissions of greenhouse gases [“carbon”]. Where have an idea of the possibilities of emission reductions tion schemes. The best known are the Clean Develop- there are prices, there are costs and benefits. It is not in your organization and the costs thereof. Otherwise ment Mechanism [CDM] and the Voluntary Carbon surprising that 70% of listed companies are evaluating you do not know whether your reduction is feasible. In Standard [VCS]. the financial impact of those costs and benefits. some cases it is possible to get emission rights for There are some issues to take into account when The first step will be to measure the emissions: this is those reductions, and this requires separate protocols buying offsets from voluntary schemes: these reduc- called a carbon footprint. There are several protocols and procedures. tions are not included in the national emission admin- available to do this. The best known is the Greenhouse istrations of countries - and therefore not accounted Gas Protocol, the most compact is ISO14064-1. Appli- for officially. carbonmetrics.com
  • 3. Designing a carbon footprint T he carbon footprint is the amount of greenhouse gas emissions that it emitted during the reporting period. In order to get this, you will need to undertake three activities. First you need to design and set up an GHG inventory: the emissions sources and their emissions. Then you collect and process greenhouse gas emission data. The resulting emission report is often verified by a third party. Both the GHG Protocol and the ISO14064-1 standard leave some important choices open for the user. The first step in the design of an emission inventory is therefore to see what these choices are, what consequences they have, and take a decision on the application in your specific case. What are these choices? Organizational boundaries You may have different installations, and you have 2 main options for consolidating these emissions: the control approach and the equity approach. In a con- trol approach you account for all GHG emissions from facilities over which you have financial or operational con- trol. In an equity share approach you would account for GHG emissions in proportion to the percentage ownership over the facility. A special case is leased assets. In a financial control or equity share approach you don’t own or operate the emission sources. Therefore you would report these emissions as scope 3. In anoper- ational control approach you would report 100% of the emissions. Base year You have to set a base year so you can follow the emission trend. You can choose a sin- gle base year, an average of several years or a rolling base year [the base year is always last year]. There may be circumstances that require the recalculation of the GHG inventory. For example, you may have detected an error in the calculation methodology or emission sources have been transferred in or out the or- ganizational boundaries. You will have to develop a policy for this, stating how the recalculation has to take place, and at at what threshold. Operational boundaries You have to decide which emissions you report. Re- porting of direct emissions and energy indirect emissions is mandatory. Reporting of other indirect emissions [scope 3] is not, and there is also no definition of what these emissions are in your particular case. So you have to decide whether you report scope 3 emissions or not. Then you decide which emissions you would report. carbonmetrics.com
  • 4. Emission scopes Direct emissions [scope 1] are the greenhouse gas emissions from sources that are owned or controlled by the reporting organisation. Most of these direct emissions are the result of combustion of fossil fuels in installations [e.g. boilers, turbines] or in mobile sources [like company trucks and cars]. The term “direct emissions” comes from ISO14064-1 Greenhouse gases — Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emis- sions and removals. The term “scope 1” comes from The Greenhouse Gas Protocol, A Corporate Accounting and Reporting Standard of WBCSD/WRI. “Scope 1” and “direct emissions” have the same meaning. Reporting of scope 1 is mandatory if you apply the ISO standard or the GHG Protocol. Indirect emissions [scope 2] are greenhouse gas emissions from imported power, elec- tricity and heating or cooling. This energy is consumed by your organization, but generated elsewhere. Sometimes an installation has its own power generation, and it exports to the grid. In that case, the emissions are already reported under scope 1 [see above]. The emissions are not subtracted from scope 1 or 2 emissions. Reporting of scope 2 is mandatory if you apply the ISO standard or the GHG Protocol. Other indirect emissions are greenhouse gas emissions which are a conse- quence of an organization's activities, but arise from greenhouse gas sources that are owned or controlled by other organizations. These emissions come from the productions of inputs other than energy [that would be scope 2]. So, scope 3 is everything that is related to your operations, but not scope 1 or 2 because you don’t own or control the emission sources. For example, when you take a plane the emission source is owned by the airline company, not you. The definition of scope 3 is very wide. Companies are free to report only commuting emissions [e.g. use of cars by employees], whereas emissions from the use of their products may be far more important [e.g. use of cars by your clients, if you produce cars]. Emissions can originate from sources that are not “owned or controlled” by the organization. This can the case if these sources are leased [e.g. cars, offices]. The reporting organization can choose to report emissions from these sources under scope 3. Reporting of scope 3 is not mandatory. When scope 3 is not [completely] reported, then the value of the carbon footprint is strongly reduced - you just don’t have a complete picture. carbonmetrics.com
  • 5. Monitoring emissions M onitoring systems have 3 main components: a data collection system, a data processing and reporting sys- tem and the organization. Data collection The data collection system is required to get activity data. These are the quantitative measures or activities that cause greenhouse gas emissions, such as tons of diesel combusted. The data can be measured directly, such as flow meters, electricity meters and the weighting of trucks. Often the measurements are done by third parties in case of which you get an invoice with the quantity on it, such as nat- ural gas or power delivered. In the first case, you would have to make sure that the measurement instruments are correctly installed and calibrated. In the second case, you would cross-check the invoices with your own [production] data. For each parameter [what] you have to decide on a measurement frequency [when], responsi- bilities for maintenance and reading [who and how], location of the equipment or filing of invoices [where]. Data processing The collected activity data are often transposed: for example, the raw data are typed into a spreadsheet. The data are then checked for errors [recording and transposing], and out- liers [extreme or unlikely values]. You can then process the data, which consists of documented calculation steps. “Documented” means that a third party can come to the same end result using the same raw data. The end result is the carbon footprint report, which specifies emissions according to type of GHG [CO2, CH4, N2O, SF6, PFCs, HFCs]; operational scope [direct emissions, energy indirect emissions, other indirect emissions]. The emissions may be reported fully [100%: operational or financial control], or proportional to ownership of the emission source [equity share]. Organisation Monitoring systems don’t work without organisation. The staff involved must know what they are doing [know-how] and be motivated to do it [know-why]. This is not always evident, since monitoring is normally an extra task on top of the daily core activities. People must know who is doing what, and this requires a definition of roles and responsibilities. Special atten- tion is required here for third parties, for example an external laboratory. Finally, there must be a quality assurance and quality control system. This means that the whole process from record to report is set up and checked in such a way that emissions data are accurate, complete, transparent and consistent. carbonmetrics.com
  • 6. Verifying emission reports V erification of the emission report has 3 possible reasons. It may be a require- ment: for example, participation in a greenhouse gas emissions trading scheme. Companies find that their report is more credible if a third party has installations participating in the European Union Emissions Trading Scheme and project participating in the Clean Development Mechanism. Materiality defines when an error is “bad” in the eyes of the person that wants to checked it. And the quality of reporting improves, since verifiers will have recom- do something with the emission report [e.g. an emission authority]. mendations for improving the monitoring and reporting system. Upon completion of the verification, the DOE declares that there the GHG asser- A verification consists of checking whether the reporting organization has fol- tion is free of material errors. That is, there may still be errors […omissions, mis- lowed the rules for greenhouse gas emission accounting. These rules may be statements], but these should be smaller than the materiality threshold. So, if the ISO14064-1 or the GHG Protocol; sometimes they are laid down in a validated mon- emission reduction is 10000 ton CO2 and the materiality 5%, then the verifier has itoring plan [e.g. EU ETS, CDM]. found all errors that are > 500 ton CO2e and the sum of individual errors that may Verification standards The most compact one is ISO 14064-3 Greenhouse gases — remain are < 500 ton CO2e. Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions. Depending on the context, there are other protocols, for example for carbonmetrics.com
  • 7. IPCC 2006 Guidance on National Greenhouse Gas Emission Inventories. The IPCC 2006 guidance is the basis for most other GHG Protocols, and contains emission factors and lower heating values. There is good news: all these factors are summarized on http://www.carbonmetrics.com/ ipcc.html. The IPCC 2006 itself can be found at http://www.ipcc-nggip.iges.or.jp/public/2006gl/index.html. EMEP/CORINAIR National registries in the European Union also use EMEP/CORINAIR, which can be found on http://reports.eea.europa.eu/ EMEPCORINAIR4/en/page002.html. EU ETS Emissions trading in the European Union was launched in 2005 and covers the CO2 emissions of over 11 500 installations in all member states. Guidelines for monitoring of emissions from the participating sectors: combustion installations [> 20 MWth], oil refineries and coke ovens; metal ore roasting or sintering; pig iron or steel production; cement, glass or ceramic products; paper or pulp. You can get the guidelines at http:// eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:229:0001:01:EN:HTML GHG Protocol The GHG Protocol “Corporate Accounting and Reporting Standards (Corporate Standard)” was launched by WBCSD and can be found on http://www.ghgprotocol.org/standards/corporate-standard. ISO 14064-1 The GHG Protocol was the basis for “ISO 14064-1 Greenhouse gases -- Part 1: Specification with guidance at the organization level for quanti- fication and reporting of greenhouse gas emissions and removals”. The ISO standard can be ordered at http://www.iso.org/iso/ catalogue_detail?csnumber=38381 UNEP GHG Indicator The United Nations Environment Program [UNEP] came up with its “UNEP Guidelines for Calculating Greenhouse Gas Emissions for Businesses and Non-Commercial Organizations” as early as 2000. The protocol can be downloaded on http://www.uneptie.org/energy/tools/ghgin/ index.htm API Compendium The American Petroleum Institute published the “Compendium of Greenhouse Gas Emission Methodologies for the Oil and Gas Industry”.http://www.api.org/ehs/climate/new/upload/2004_COMPENDIUM.pdf. At this website, www.api.org, you will also find the SANGEA soft- ware for the oil & gas industry. Greenhouse gas IPIECA Guidelines The International Petroleum Industry Environmental Conservation Association [IPIECA] publishes the “Petroleum Industry Guide- lines for Reporting Greenhouse Gas Emissions”. http://www.ipieca.org/activities/climate_change/downloads/publications/ghg_guidelines.pdf. protocols CCAR The California Climate Action Registry has developed the “General Reporting Protocol”. http://www.climateregistry.org/resources/docs/ protocols/grp/GRP_V3_April2008_FINAL.pdf. ICAO A specialized calculator is made available online by the International Civil Aviation Organization [ICAO]. http://www2.icao.int/public/cfmapps/ carbonoffset/carbon_calculator.cfm. CDM The Executive Board of the CDM approves so-called methodologies for projects that are small-scale [AMS], large scale [AM and ACM] and af- forestation and reforestation [AR-AM]. These methodologies can be found on http://cdm.unfccc.int/methodologies/index.html. ISO14064-2 The ISO standard for project-based emission reductions is “ISO 14064-2: 2006 Greenhouse gases -- Part 2: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements”. http://www.iso.org/iso/ catalogue_detail?csnumber=38382. VCS Voluntary Carbon Standard 2007 can be downloaded at http://www.v-c-s.org/documents.html. The VCS Program aims to provide a global standard for the approval of voluntary offsets. The Gold Standard can be downloaded at http://www.cdmgoldstandard.org/. It aims only at renewable energy and energy efficiency projects that actively promote sustainable development. ISO14064-3 Specification with guidance for the validation and verification of greenhouse gas assertions is the most compact verification and vali- dation guidance available. It can be purchased via www.Iso.ch carbonmetrics.com
  • 8. About the author Copyright notice Henk Harmsen has 20 years international environmen- © Henk Harmsen, CarbonMetrics, 2008. tal management experience. He has worked for the You can do what this text whatever you like, as long as United Nations, KPMG, engineering firms, Pricewater- you say where you got it from. houseCoopers. Greenhouse gas experience from 2000 includes carbon footprinting, capacity building, moni- toring and verification in the Netherlands, Belgium, Comments France, Italy, Tunesia, China, Qatar, Algeria, Mexico, Visit the website at www.carbonmetrics.com, or leave Nicaragua, Brasil and the United Kingdom. me a message at henk@carbonmetrics.com. Henk Harmsen 2008.10.18 14:13:41 +02'00' carbonmetrics.com