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    March 19, 2015

    How to Track Electricity Emissions in the GHG Inventory

    Generation of electricity, steam, heating, and cooling accounts for 40 percent of global greenhouse gas (GHG) emissions1It is imperative that companies learn how to properly categorize, calculate and report these emissions.


    First, companies must account for all plausible sources of emissions. In order to accurately do so, each source must be categorized under one of three recognized emissions scopes, as established by the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard.

    Scope 1 are direct emissions from sources owned or controlled by the reporting company, e.g. emissions from company owned or operated boilers or vehicles.

    Scope 2 are from the generation of purchased or acquired electricity, steam, heat and cooling.

    Scope 3 are all the other indirect emissions which are related to the reporting company’s activities, such as the embodied emissions of purchased goods and services, business travel in third-party owned vehicles, or the emissions associated with electricity which is lost in the transmission and distribution system used for delivering purchased electricity.


    Calculating Scope 2 emissions has become increasingly difficult in the years since the publication of the corporate standard because of wider consumer choice in electricity suppliers and products with inconsistent and incomparable data2

    There are two methods for calculating Scope 2 electricity emissions.

    The location-based method3 calculates emissions from their local power grid, revealing what the company is physically putting into the air.

    The market-based method4 looks to emissions that company is responsible for through its purchasing decisions.

    In order to ensure accuracy, the GHG Protocol has published Scope 2 Guidance which provides a consistent, transparent way for companies to show how different types of electricity purchases count toward their emissions targets. In this way, corporations can choose how to procure electricity based on the emissions profile of providers, and providers can calculate and relate accurate carbon footprint performance to customers5.

    GHG Protocol Calculation Tools

    The Greenhouse Gas Protocol provides toolsets for electricity and most other sources in order help companies establish comprehensive and reliable inventories of their GHG emissions. Each toolset comes with a PDF guidance document for instruction, and an Excel workbook to execute calculations.


    It is currently mandatory for sources that emit 25,000 metric tons of more of carbon dioxide (CO2) equivalent to report emissions data to the EPA. However, many companies choose to voluntarily report their emissions data as part of a broader sustainability reporting initiative.

    Sustainability reporting increases accountability for environmental impact, which enhances trust between the business and its employees, stakeholders and society. Publishing a sustainability report that includes emissions data introduces and promotes an environment of continuous improvement. By freely adhering to standards such as ISO 26000, the Global Reporting Initiative, and the Carbon Disclosure Project, companies can communicate progress in reducing emissions, increasing transparency and allowing the business to publicize environmental goals.

    [3] Ibid.
    [4] Ibid.

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