Understanding How Companies Can Report Scope 2 Emissions
Posted on 01 August 2023
Business Analyst – RE24
An Electrical Engineer and a Data Scientist. Experienced Business Analyst.
To combat climate change and promote sustainability, businesses around the world are becoming increasingly concerned about their carbon emissions. By understanding and accurately reporting your indirect emissions, you can significantly reduce your carbon footprint. Scope 2 emissions which include energy purchased and consumed by a company, are a crucial aspect of environmental reporting. Here, we’ll walk you through the two primary methods; location-based and market-based.
The Location-Based Method:
Companies calculate emissions based on statistical data and electricity output within a specific geographic area and defined time period. This approach uses generation-only emission factors. They measure emissions associated with the amount of electricity consumed and exclude transmission and distribution losses or upstream lifecycle emissions.
The Market-Based Method:
To truly reflect the choices made by consumers regarding their electricity supply, the market-based method is the way to go. It considers contractual instruments and agreements, accounts for the actual emissions associated with your energy choices.
The Common Challenge Of Double Counting
Companies that own generation facilities supplying the same grid region where their consumption occurs should treat their grid consumption as though it were supplied by their own facilities. It is treated as “on-site” generation. This means no additional emissions are reported in scope 2. This avoids double counting between both scope 1&2 emissions.
Applicability Of Dual Reporting
Companies with any operations in markets providing product or supplier-specific data in the form of contractual instruments, need to report scope 2 emissions in two ways and label each result according to the Location-Based and Market-Based Method. This overall method is also termed “dual reporting.”
You need to assess whether the market-based method applies to your operations. If any of your operations fall under this category, the market-based method must be applied to your entire corporate inventory for consistency. You can use the location-based method in-case market-based method data is not applicable or available for your operations.
How To Calculate Scope 2 Emissions?
In a nutshell, to calculate scope 2 emissions,
- Multiply activity data from each operation by the emission factor for each applicable greenhouse gas (GHG).
- Multiply GHG emissions totals by global warming potential (GWP) values, to obtain the total emissions in CO2 equivalent (CO2 e).
RE24 Reports Scope 2 Emissions, By Abiding GHG Protocol!
As an online energy marketplace, we encounter Scope 2 emission reporting very often. Herre’s how we do it in accordance with GHG Protocol.
Scope 2 emission reporting is vital for companies to understand and reduce their environmental impact. By utilising this method, you can gain valuable insights into their energy consumption and contribute to a greener future.
Let’s join hands and create a greener, cleaner future for generations to come. Together, we can make a difference!