Easy as (Scope) 1, 2, 3
Last week I discussed greenhouse gases (GHG). Gases that absorb infrared light and create the greenhouse effect.
These gases are reported under the Greenhouse Gas Protocol. A framework to help organisations measure their emissions footprint. Pretty much every business activity contributes emissions to the atmosphere, either directly or indirectly.
Activities are further divided across three Scopes. Scope 1; direct emissions, Scope 2 and 3; indirect emissions.
We will focus on Scope 3 in the following post next week. In this post we are going to look at Scope 1 and 2.
These emissions occur directly from company operations. Split into four distinct categories:
- Stationary combustion is the burning of fuels, such as natural gas, from equipment such as boilers for heating, ovens and hobs for cooking.
- Mobile combustion is the burning of fuels from moving equipment such as cars, vans, and other vehicles. It is only classed as Scope 1 if the vehicles are owned by the company. If they are leased then they are in Scope 3, something to address in the next post.
- Process emissions occur during industrial processes including carbon dioxide released from petrochemical cracking or smelting of aluminium which releases PFCs. During these processes, emissions are released directly into the atmosphere.
- Fugitive emissions occur from leaking gaskets, joints and seals from air conditioning systems using refrigerants.
Most companies will have stationary and mobile combustion, a large proportion will have fugitive emissions and few businesses will have process emissions.
It is crucial for companies to report and reduce Scope 1 where possible, as this is where businesses have most influence.
Now what about Scope 2.
Scope 2 emissions are indirect emissions from purchased electricity, heat, steam or cooling. They are indirect because fuel has been consumed to generate the electricity. The generation of electricity requires combustions of fuels and the fuel used is the electricity generators Scope 1.
There may be times when companies generate electricity onsite, through an owned CHP system or generator. In this case, the fuel used to generate the electricity is Scope 1.
There are two primary methods for calculating Scope emissions. Market-based and location-based.
A market-based approach is when a company reports on their emissions based on an active choice for an alternative contractual agreement. This may include a renewable energy tariff backed up by recognised certificates such as REGOs.
A location-based approach is for companies using the average emission intensity of the grid. BEIS publish the GHG conversion factors annually which is where you can find the conversion factors for electricity along with many other emissions activities.
Many businesses are now starting to address their carbon footprints. Gathering data from financial systems or enterprise resource planning systems. Using this data and the GHG conversion factors to calculate the carbon dioxide equivalent from business activities and setting a benchmark for future reduction targets.
Businesses usually start with Scope 1 and 2, as they are relatively straightforward to calculate. Scope 3 is much more complex, something we will address in another post further down the line.
If you have any questions about reporting, please feel free to get in touch.