Which Approach Should You Choose for Scope 2 Emissions Calculations?

How to select electricity emission factors - Scope 2 guidance

Emissions from purchased electricity fall under Scope 2 of the Greenhouse Gas Protocol (GHGP). Note that upstream emissions are considered under Scope 3 of the GHGP; we will provide guidance separately for this aspect of emissions. According to the GHGP, Scope 2 electricity emissions should be reported using two calculation approaches:

Location-based; and Market-based The location-based approach reflects the average emissions intensity of the local electricity grids, while the market-based approach reflects emissions from electricity supplies that companies have purposefully chosen (or had no option but to use).

Using the earthemission API for Scope 2 Reporting

This document covers accounting for scope 2 reporting using the earthemission API. The API includes numerous emission factors suitable for location- and market-based reporting, and subscribers can add their private supply-specific factors. earthemission is developing an automated approach to emission factor selection; this guidance will be updated upon completion.

Location-Based Approach

Definition

The location-based approach reflects the connection between the collective demand for electricity from the grid and the emissions resulting from electricity generation. Emission factors are calculated as emissions (CO2e) from electricity generation supplied to the grid divided by the energy generated (kWh). It uses grid-average emissions data and electricity output averaged within a defined geographic boundary (e.g., country) and during a defined time period (e.g., one year). It does not vary between electricity suppliers.

** Which Factors to Use**

National Grid-average Emission Factors

1. Grid-average (generation) mix:

   • Total emissions from electricity supplied through the grid divided by the total energy supplied. Often published by national government agencies.

2. Production Mix:

   • Represents electricity generated within a country. Suitable when Grid Mix factors are not available.

3. Subnational (Regional) Grid-average Emission Factors:

   • Use subnational / regional emission factors if available instead of the national factor.

Direct Line Emission Factors

• If an organization buys energy through a direct line from a power plant, use the direct line emission factor instead of the national or regional grid average.

Market-Based Approach

Definition

The market-based approach reports greenhouse gas emissions using emission factors tailored to the reporting organization's electricity purchases. It considers contracts providing specific information about the supply mix and emissions.

Which Factors to Use

Hierarchy of Information / Evidence (Descending Order of Precision)

1. Energy Attribute Certificates (EACs):

   • Apply the emission factor associated with EACs to electricity purchases covered by EACs.

2. Specific Supply Contracts:

   • Use fuel mix or emission factor from the supply contract. Estimate the emission factor if only a fuel mix is given.

3. Supplier Rates:

   • Apply the supplier's residual emissions mix / emission factor or total fuel mix / emission factor.

4. Country / Region Residual Mix:

   • Residual emission factors come from the fuel mix left over after all claims on energy generation. Calculated and published by national governments.

5. Location-Based:

   • Use the location-based factor if no other information is available.