How to Calculate Scope 2 Emissions Accurately

Understanding Scope 2 emissions is a key part of assessing a company’s environmental footprint. These emissions are indirect greenhouse gases from purchased electricity, steam, heating, and cooling consumed by an organization. Calculating these emissions supports corporate sustainability and environmental reporting. This article outlines the steps to accurately calculate Scope 2 emissions for your organization.

Identifying Scope 2 Energy Use

The first step in calculating Scope 2 emissions is identifying all sources of purchased energy. This involves creating an inventory of every facility, operation, or asset that consumes purchased electricity, steam, heating, or cooling.

Examples of Scope 2 energy sources include electricity from the utility grid, district heating, or purchased steam for industrial processes. Ensure all energy consumption points within your organizational boundary are identified. This process helps prevent omissions for subsequent calculations.

Collecting Consumption Data and Emission Factors

Accurate Scope 2 emission calculations require two types of data: energy consumption figures and emission factors. Energy consumption data, detailing the amount of electricity, steam, heating, or cooling used, is found on utility bills, smart meter readings, or energy management systems. Invoices specify quantities for purchased steam, heating, or cooling.

Collect consumption data in consistent units, such as kilowatt-hours (kWh) or megawatt-hours (MWh) for electricity, and gigajoules (GJ) or British thermal units (BTUs) for heating and cooling. Unit consistency simplifies applying calculation formulas.

Emission factors represent the greenhouse gases released per unit of energy consumed. These factors convert energy consumption into emissions. Reliable emission factors are sourced from authoritative bodies like the Environmental Protection Agency (EPA) or the International Energy Agency (IEA).

For location-based calculations, use grid-average emission factors, which reflect the average emissions intensity of the electricity grid in a specific region. These factors account for the mix of fuel sources. Market-based calculations require supplier-specific emission factors, detailing emissions from the specific energy product purchased. These are obtained from energy attribute certificates (EACs), Power Purchase Agreements (PPAs), or residual mix factors.

Choosing a Calculation Approach

Organizations use two main methodologies for calculating Scope 2 emissions, as outlined by the Greenhouse Gas (GHG) Protocol: the location-based approach and the market-based approach. The location-based approach reflects the average emissions intensity of the grids where energy consumption occurs. This method uses grid-average emission factors, published by national or regional authorities.

This approach shows the emissions associated with the local electricity grid’s power generation mix. It does not account for specific contractual energy arrangements. The location-based method offers a standardized way to compare emissions across entities operating within the same grid.

The market-based approach reflects emissions from the specific electricity products companies have chosen. This method uses supplier-specific emission factors, often derived from contractual instruments like Energy Attribute Certificates (EACs) or Power Purchase Agreements (PPAs). These instruments prove that renewable energy was generated and delivered to the grid.

If specific contractual instruments are unavailable, a residual mix factor is used. This factor represents the emissions of the remaining, undifferentiated electricity on the grid after specific energy purchases. Many reporting frameworks, including the GHG Protocol, require reporting Scope 2 emissions using both approaches. This dual reporting provides a comprehensive view of both grid emissions intensity and procurement decisions.

Applying Calculation Formulas

After collecting consumption data and emission factors, apply the formulas to calculate Scope 2 emissions. The formula is: Scope 2 Emissions = Energy Consumption × Emission Factor. Apply this formula to each identified energy source.

For a location-based calculation, multiply your total electricity consumption (e.g., kWh or MWh) by the regional or national grid-average emission factor. For example, if your grid’s emission factor is 0.4 metric tons of CO2 equivalent per MWh, and you consumed 100 MWh, your location-based emissions would be 40 metric tons of CO2 equivalent. Ensure unit consistency; convert consumption units if needed before multiplying.

For a market-based calculation, use supplier-specific emission factors or factors from contractual instruments. If you purchased renewable energy supported by Energy Attribute Certificates (EACs), emissions for that consumption portion would be zero or low. For any remaining consumption not covered by specific instruments, apply the residual mix factor for your region. This factor accounts for the portion of the grid’s electricity not specifically attributed.

Once individual calculations are complete, aggregate these figures. Sum the emissions from all purchased electricity, steam, heating, and cooling sources to get a total Scope 2 emissions figure for your organization. This total measures your indirect emissions from energy consumption for the reporting period.

Ensuring Accuracy and Transparency

After calculating Scope 2 emissions, maintain strong data management and documentation. Keep detailed records of all energy consumption data, including utility bills, meter readings, and invoices from energy providers. These records serve as evidence supporting your reported emissions figures.

Document the specific emission factors used, noting their source, vintage, and any assumptions. Documenting calculation steps and methodologies ensures the process can be replicated and understood.

Implement internal review processes to check for errors and ensure consistency. This verification can involve cross-referencing data sources or having a separate team member review calculations. For external reporting, especially for larger organizations, third-party verification of emissions data enhances credibility and reliability.