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Published byMinistry of Natural Resources and Environment (NRE) Malaysia
In partnership withUnited Nations Development Programme (UNDP) Malaysia
Prepared byEco-Ideal Consulting Sdn Bhd
Version 1.518 April 2014
Copyright:Government of Malaysia and UNDP MalaysiaQuotations permitted with source credit
National Corporate GHG Reporting Programme for Malaysia
MYCarbon GHG Reporting Guidelines
Version 1.5
Revision History of This DocumentVersion Date Description
1.5 18.04.2014 Included the grid emissions factors for year 2012 (page C7, Annex C).
1.4 25.03.2014 Revised Figure 4, page 8.
Revised typo in Annex C: Global Warming Potential (GWPs), Default Values and Emissions Factors
Revised Annex E: Example Reporting Template Ver. 1.2.
1.3 10.03.2014 Revised Step 3 information to include GWPs, list of default values and emissions factors (Annex 3 - Global Warming Potential (GWPs), Default Values & Emissions Factors) (page 24, Chapter 4).
Included the reporting tips for unit check (page 24, Chapter 4).
Included a note on the exclusion of CH4 and N2O gases produced from fuel combustion for simplification in Table 5 (page 36, Chapter 4).
Changing sequences of annexes from Annex C and onwards.
1.2 17.01.2014 Included the reference of the usage of grid emission factor, Tool to calculate the emission factor for an electricity system in the reporting tips (page 24, Chapter 4).
1.1 31.12.2013 Included the reporting tips for reporting and base year (page 24, Chapter 4).
Revised Annex C (List of Emission and Conversion Factors) and Annex D (Example Report Template)
MYCarbon GHG Reporting Guidelines
ForewordMYCarbon is the National Corporate Greenhouse Gas (GHG) Reporting Programme for Malaysia which is the first of its-kind in this country. MYCarbon will be implemented by the Ministry of Natural Resources and Environment (NRE) Malaysia and supported by the United Nations Development Programme (UNDP) Malaysia. It recognises the important roles and supports from the private sectors in moving Malaysia towards a low-carbon economy. MYCarbon will serve as a programme to measure the countrys progress in achieving the national emissions reduction target.
One of the MYCarbon development aims is to establish supporting instruments for the reporting programme and this can be achieved through the formulation and application of standards and guidance. Accordingly,
MYCarbon GHG Reporting Guidelines is developed and consists of an overall guidance for corporate accounting and reporting. These guidelines are applicable to all organisations of all sizes and shall be used by the organisations in their GHG reporting to ensure consistency and comparability of data.
These guidelines are prepared with the help of many individuals, businesses and organisations from institutions in Malaysia through extensive stakeholders consultation in making it as practical as possible. I gratefully acknowledge the work and expertise provided by all who have kindly reviewed and successfully prepared these guidelines.
These guidelines will be periodically updated and improved based on the feedback and experiences gained along the way. Revisions to this document and supporting documents will be included to improve the Malaysia Governments overall ability to accurately account for and report GHG emissions over time. Comments and suggestions towards future improvement of these guidelines are most welcomed and can be sent to [email protected].
YB Datuk Seri G. PalanivelMinisterMinistry of Natural Resources and Environment (NRE)Malaysia
Table oF ConTenTsForeword
List oF Figures
List oF tabLes
List oF acronyms
cHaPter 1 introduction
1.1 Climate Change and its Economic Impacts 1
1.2 Overview of the MYCarbon Programme 2 1.2.1 Reporting Entity 3
1.3 Benefits of Corporate GHG Reporting 4
1.4 Guidelines 4 1.4.1 Information Sources and References 4 1.4.2 Objectives 6
1.5 Overview of Process 6
cHaPter 2 setting tHe accounting and rePorting boundaries
2.1 Geographical Boundaries 10
2.2 Organisational Boundaries 10
2.3 Operational Boundaries: Identify the GHG Emissions Sources 12 2.3.1 Scope 1 (All Direct Emissions) 12 2.3.2 Scope 2 (Indirect Emissions) 12 2.3.3 Scope 3 (Other Indirect Emissions) 12 2.3.4 CO2 Emissions from Biogenic Combustion 13
cHaPter 3 tracking emissions over time (base year)
3.1 Choosing a Base Year 17
3.2 Recalculating Base Year Emissions 18 3.2.1 Develop a Base Year Recalculation Policy 18 3.2.2 Determine whether the Base Year needs to be Recalculated 18
MYCarbon GHG Reporting Guidelines
cHaPter 4 identiFying and caLcuLating gHg emissions
4.1 Calculation and Emissions Factor 22
4.2 Common Emissions Sources and Activity Data 26
4.3 Applying Calculation Tools 32
cHaPter 5 rePorting gHg emissions
5.1 Key Principles of Accounting and Reporting 40
5.2 Managing Reporting Quality 41
5.3 Accounting for GHG Reductions 41
5.4 Data Confidentiality 42
5.5 Timing of Annual Reporting 43
5.6 Required Information of Reporting 43
cHaPter 6 auditing and veriFication
6.1 Objectives 44
cHaPter 7 setting gHg targets
7.1 Steps in Setting a Target 46
annex a stePs to determine organisationaL boundaries
annex b stePs to determine oPerationaL boundaries
annex c gLobaL warming PotentiaLs (gwPs), deFauLt vaLues and emissions Factors
annex d List oF emissions and conversion Factors
annex e examPLe rePort temPLate
Annex F comParing absoLute and intensity targets
gLossary and key terms
lisT oF FiguresFigure 1: MYCarbon objectives 2
Figure 2: Illustration of MYCarbon framework 3
Figure 3: Benefits of corporate GHG reporting 4
Figure 4: Overview of process 7-8
Figure 5: Overview of accounting and reporting boundaries 9
Figure 6: Overview of organisation boundary 10
Figure 7: How to determine organisational boundaries 11
Figure 8: Illustration of scopes and emissions across a value chain 12
Figure 9: Example of emission sources 13
Figure 10: Steps in identifying and calculating an organisations emissions 22
MYCarbon GHG Reporting Guidelines
lisT oF TablesTable 1: Basic rules for base year emissions recalculations 18
Table 2: Four (4) main emissions source categories 23
Table 3: Malaysian grid emission factor 24
Table 4: List of emissions sources information 26
Table 5: Various industry sectors GHG sources and activities 34
Table 6: Classification of reporting organisations 41
Table 7: Steps in setting and tracking performance 46
lisT oF aCronymsACI Airports Council InternationalAF Alternative fuels CaCO3 Calcium carbonate CaO Calcium oxide CCAR California Climate Action Registry CCX Chicago Climate Exchange CDM Clean Development Mechanism CEET Carbon Emissions Estimation Tool CEM Continuous emissions monitoring CEO Chief Executive Officer CESCL IFC Climate Change Unit CF4 Tetrafluoromethane CFC Chlorofluorocarbon CH4 Methane CHCl3 Chloroform CHP Combined Heat and Power CSI Cement Sustainability InitiativeCSR Corporate Social ResponsibilityCO2 Carbon dioxide DECC Department of Energy and Climate Change (United Kingdom) Defra Department for Environment, Food and Rural Affairs (United Kingdom) EE Energy Efficiency ESI Electricity Supply Industry EPA Environmental Protection Agency (United States) EU ETS European Union Emission Trading Scheme FAQ Frequently Asked Question FY Fiscal Year GDP Gross Domestic Product GHG Greenhouse Gas GWP Global Warming Potential HCFC Hydrochlorofluorocarbon HF Hydrogen fluoride HFC Hydrofluorocarbon HHVs Higher heating values IAI International Aluminium InstituteICF International Compensation Fund ICFPA International Council for Forest and Paper Associations IEA International Energy Agency
MYCarbon GHG Reporting Guidelines
IFC International Finance Corporation IPCC Intergovernmental Panel on Climate Change IPIECA International Petroleum Industry Environmental Conservation Association ISO International Organization for Standardization IT Information Technology LPG Liquefied Petroleum GasesLFGTE Landfill-gas-to-energy LKD Lime Kiln Dust MADA Muda Agricultural Development Authority (Malaysia) MgO Magnesium oxide MGTC Malaysian Green Technology Corporation MSIC Malaysia Standard Industrial Classification Na2CO3 Sodium carbonateN2O Nitrous oxide NCASI National Council for Air and Stream Improvement NF3 Nitrogen triflouride NGO Non-governmental organisation NH3 Ammonia NOx Nitrogen oxide NRE Ministry of Natural Resources and Environment (Malaysia) NSCR Non-Selective Catalytic ReductionP2 Pollution Prevention PCC Precipitated calcium carbonate PFC Perfluorocarbon RE Renewable Energy ROC Registration of Company SbCl5 Antimony pentachloride SF6 Sulphur hexafluoride T&D Transmission and distribution TNB Tenaga Nasional Berhad (Malaysia) TOC Total organic carbon UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change US United States WBCSD World Business Council for Sustainable Development WRI World Resources Institute WTE Waste-to-energy
inTroduCTion provides a brief introduction to climate change and its economic impact,gives an overview of the MYCarbon programme and what are the benefits that lie behind the corporate GHG reporting. Besides that, it also introduces the key aspects of MYCarbon Reporting Guidelines and its process overview to enable the readers to have a better understanding of the guidelines.
1.1 Climate Change and its economic Impacts Climate change is real and at our footstep. The impact is being felt in Malaysia, e.g.
floods and droughts which cause revenue and productivity losses and have put peoples health at risk. Generally, climate change is due to the increase in GHG emissions, especially
the GHGs covered by the United Nations Framework Convention on Climate Change (UNFCCC)/ Kyoto Protocol currently the GHGs are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen triflouride (NF3) which cause changes in ambient temperature, extreme weather events, rise in sea water level and rapid long-term changes in weather patterns which are induced by human activities.Climate-related natural disasters can be costly and a study from 2011 Economics of Climate Change for Malaysia project stated that:
Flood Several major floods in Johor 2006/ 2007 - RM
1.5 billion losses. Kedah flood 2010 - RM 500 million losses.
Kedah waterlogging as a result of too much rain - RM 65 million to take care of 8,000 ha of paddy fields.
Allocation for floods have risen from RM 56 million (3rd Malaysia Plan) to RM 1 billion (10th Malaysia Plan) - an indication of how serious the floods have become in terms of national planning.
drought Agricultural Development Authority (MADA)
paddy planting in 1978 which costed RM 350 million - due to 360,000 tons of paddy destroyed.
2004 major water shortages in Klang Valley for several weeks - over RM 100 million losses.
Drought season in Sabah @ Teluk Likas, Kota Kinabalu by Mohd Azrone Sarabatine.Berita Harian, 2010
Flood @ Kampung Haji Baki, Sarawak
1
MYCarbon GHG Reporting Guidelines
Stakeholder consultation workshops
1.2 overview of the MYCarbon ProgrammeMalaysia has announced the intention to work towards up to 40% reduction in emissions intensity of Gross Domestic Product (GDP) by year 2020 based on the year 2005 level provided that technology transfer and financial support are provided from the developed countries.
In managing climate change, Malaysia has initiated a programme called MYCarbon National Corporate GHG Reporting Programme for Malaysia in August 2013. MYCarbon aimed for an advanced GHG reporting and management by organisations in Malaysia, particularly those in the private sectors.
Specific objectives of the programme are to:
Figure 1: MYCarbon objectives
The MYCarbon framework is developed by taking into consideration suggestions and comments from the participants who have attended
the two stakeholders consultation workshops held in year 2012.
2
An illustration of the framework developed in October 2012 is as shown below:
Figure 2: Illustration of MYCarbon framework
This framework is designed to guide and assess the development of a true and fair account of organisations emissions report. The focal point serves as an organisation structure which manages and coordinates MYCarbon as a whole. This is then supported by the development of national reporting standard and guidance and the support measures such as fiscal incentives, awards, etc. From time to time, the framework will be revised to be consistent with the national committee/council and in line with on-going programmes both nationally and internationally. A web-based submission of report will be applied and the data will be kept under a national registry. It is expected to receive a corporate/entity level of accounting and reporting. If needed by the reporting entity, carbon management services provider and carbon management audit provider are essential in assisting them in the reporting.
For more information, please visit: www.mycarbon.gov.my.
1.2.1 reporting entityMYCarbon defines the reporting entity the type of organisations required to report its GHG emissions to the programme at the corporate level. Under corporate-level reporting, an organisation reports emissions from all of its facilities, subsidiaries and other organisations as determined by its organisational boundaries.
Defining the reporting entity at the corporate level is consistent with the definitions and rules of financial accounting which are based on either ownership or control approach.
Carbon Management Services Provider
(if needed)
Supports Measurese.g. scal incentives, awards,
training etc.
Corporate/ Entity Level Accounting and Reporting
National Corporate GHG Reporting Programme for
Malaysia
National Reporting
Standard & Guidance
Focal Point
National Registry(Web-based Report)
Carbon Management Audit Provider
(if needed)
Organisation A Company A Industry A
Organisation B Company B Industry B
MYCarbon
National Committee/
Council
On-going programmes nationally and internationally
3
The Greenhouse Gas
Protocol: A Corporate Accounting and Reporting Standard (revised edition) is
developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD) in year 2004.
More information is available at this weblink: http://www.ghgprotocol.org
The Greenhouse Gas
Protocol: A Corporate Accounting and Reporting Standard (revised edition) is
developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD) in year 2004.
More information is available at this weblink: http://www.ghgprotocol.org
MYCarbon GHG Reporting Guidelines
1.3 Benefits of Corporate GHG reportingThere are direct benefits to organisations in the accounting and reporting of GHG emissions, including:
Facilitate climate change reportingProvide detailed GHG data sourcePower development of future policies and measuresCreate synergies between renewable energy (RE)/ energy eciency (EE) sector and waste sector
Deliver corporate sustainability and accountabilityCarbon reductions identication will lead to enhanced eciency and competitiveness
Recognition of a level of environmental integrityEnhance awarenessConsidered as best business practices
Government &Researcher
Business Sector
Civil Society
Figure 3: Benefits of corporate GHG reporting
1.4 GuidelinesThis MYCarbon Reporting Guidelines (hereafter referred to as Guidelines ) has been prepared to meet the demand in accordance with the programmes targeted outcome and to help the organisations to take action themselves to manage and reduce GHG emissions. The organisations are required to use these Guidelines when reporting their GHG emissions.
These Guidelines is neither designed for quantifying the reductions from individual GHG mitigation projects nor does it include strategies for reducing GHG emissions. Each organisation is expected to take into account its own circumstances in utilising these Guidelines.
1.4.1 Information Sources and referencesThe principal source of information used in developing these guidelines is:
A Corporate Accounting and Reporting Standard
4
These Guidelines has also made reference to the following internationally relevant existing GHG accounting and reporting programmes and standards:
The Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard (October 2011)
The Greenhouse Gas Protocol: Measuring to Manage: A Guide to Designing GHG Accounting and Reporting Programs (December 2007)
International Organization for Standardization (ISO) 14064-1: Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals
Department for Environment, Food and Rural Affairs (Defra), United Kingdom: Guidance on How to Measure and Report your Greenhouse Gas Emissions (September 2009)
The Climate Registry: General Reporting Protocol 2.0
Australian Government: National Greenhouse and Energy Reporting System Measurement (July 2013)
Environment Canada, Facility Greenhouse Gas Emissions Reporting Program: Technical Guidance on Reporting Greenhouse Gas Emissions (April 2013)
INTERNATIONAL
STANDARD
ISO14064-1
First editio
n
2006-03-01
Refe
rence number
ISO14064-1
:2006(E)
ISO
2006
Greenho
use g
ases
Part 1:Sp
ecification with
guidan
ce at the
organization
level fo
r quantificatio
n and
reporting of
greenhouse g
as emission
s
and removals
Gaz
effet de serre
Partie
1: Spcificatio
ns et lig
nes directrices, au
niveau des organism
es,
pour la qua
ntification et la dcla
ration des missio
ns et
des suppressio
n
des ga
z effet de serre
Vervielf
ltigtmitErla
ubnis
derISOInternatio
nalOrganizatio
nforStandardizatio
n,erte
iltdurchDIN
DeutschesInstitu
tfrNorm
unge.V., in das interne Netzwerk der TV Rheinland Group eingespeichert.
5
MYCarbon GHG Reporting Guidelines
1.4.2 objectivesThe main purpose of these Guidelines is to provide information to facilitate reporting by organisations using the above standard, i.e. A Corporate Accounting and Reporting Standard (Corporate Standard) on a voluntary basis for their operations in Malaysia. It is for the organisations to understand the emissions that they are responsible for, know how much they are emitting and which activities are causing the highest emissions.
Standardised approaches in these Guidelines will increase the consistency and transparency in GHG accounting and reporting among the organisations. At the same time, it will also help to simplify and reduce the costs of preparation and compilation.
1.5 overview of ProcessThese Guidelines provide a comprehensive facilitation on the core issues of GHG accounting and reporting at an organisation level. Organisations might find it helpful to start by looking at Figure 4.
Below is a list of frequently asked questions (FAQs) with directions to the relevant chapters.
How should the reporting entity be defined? CHAPTER 1
How should I define my geographic boundary? CHAPTER 2
How do I deal with complex company structures and shared ownership? CHAPTER 2
What is the difference between direct and indirect emissions and what is their relevance? CHAPTER 2
Which indirect emissions should I report? CHAPTER 2
What is a base year and why do I need one? CHAPTER 3
My emissions change with acquisitions and divestitures. How do I account for these? CHAPTER 3
How do I identify my organisations emission sources? CHAPTER 4
What kinds of tools are there to help me calculate emissions? CHAPTER 4
What data collection activities and data management issues does my organisation haveto deal with? CHAPTER 4
What determines the quality and credibility of my emissions information? CHAPTER 5
How should I account for and report GHG offsets that I sell or purchase? CHAPTER 5
What information should be included in a GHG public emissions report? CHAPTER 5
Should I get my emissions data verified? CHAPTER 6
What is involved in setting an emissions target and how do I report performance inrelation to my target? CHAPTER 7
6
Does your parent company/ organisation report GHG emission?
Has any Scope 1 & 2 emissions been excluded from this report? (Chapter 2.3)
Insert diagram to depict your operational boundaries (Chapter 2.3)
Are Scope 3 emissions included in this report? (Chapter 2.3)
Explain for exclusion
NOYES
Information on emissions (Chapter 2.3 & 4)
Reporting period (Chapter 5.5)
Organisation information
Organisation boundary (Chapter 2.2)
OPTION2
Financial Control(list and Yes/No)
OPTION1
Equity share(list and %)
OPTION3
Operational Control(list and Yes/No)
Insert diagram to show the relationship of the reporting subsidiary as well as other subsidiaries (Chapter 2.2)
NOYES
Specify and justify their exclusion
YES NO
Scope 1, 2, 3 & total in mtCO2e
All UNFCCC/ Kyoto Protocol GHGs in mt
Each scope disaggregated by source types in mtCO2e
Biogenic combustion in mtCO2e
7
MYCarbon GHG Reporting Guidelines
Figure 4: Overview of process
Has this report been prepared by an external consultant?
Verication / Assurance (Chapter 6)
Fill in consultants contact information
YES NO
Reduction initiativescompared to BAU
scenario
Base year (Chapter 3)
Recalculations policy
Context trigger recalculations
Year chosen Scope 1, 2, 3 & total in mtCO2e
All UNFCCC / Kyoto Protocol GHGs in mt
Each scope disaggregated by source types in mtCO2e
Biogenic combustion in mtCO2e
Methodologies and emission factors (Chapter 4)
Self-assurance or self-verication
Veried by a third party registered with NRE
Reduction strategies and targets (Chapter 7)
Overall reductiongoal
Active emissionsreduction target
Future emissionsreduction target
Emissions overtime trend graph
Optional information
Declaration
Information on emissions and performance
Information on worldwide operations emissions
Information on carbon osetting (Chapter 5.3)
8
An organisation needs to clearly identify its boundaries to develop a consistent GHG accounting and reporting. Chapter 2
seTTing The aCCounTing and reporTing boundaries sets out the approach to determine an organisations accounting and reporting boundaries. The key questions to be answered in this chapter are:
How should I define my geographical boundary? How do I deal with complex company structures and shared ownership?
What is the difference between direct and indirect emissions and what are their relevance? Which indirect emissions should I report?
Geographical boundaries determine within which organisations physical location will be included in a GHG accounting and reporting.
Organisational boundaries determine which organisations will be included in a GHG accounting and reporting based on the organisations ownership or control over those organisations.
Operational boundaries determine which GHG emissions will be included in the GHG accounting and reporting based on the organisations ownership or control over emission sources at each of those organisations.
Figure 5: Overview of accounting and reporting boundaries
9
Parent company
Company A
Company C
Company D
Company B
Ship eet Powergeneration
unit
Owned/ controlled building
Car eet Leased factory
Owned/ controlled building
Leasing buildingDirect and indirect emissions
ORG
ANIS
ATIO
N
BOU
ND
ARIE
SO
PERA
TIO
NA
L BO
UN
DA
RIES
Source: Adopted from GHG Protocol Corporate Standard Accounting and Reporting Standard
MYCarbon GHG Reporting Guidelines
2.1 Geographical BoundariesFor the geographical boundaries, it requires only the operations in Malaysia to be accounted for and have its emission sources reported.
If an organisation wishes to report its worldwide emissions, separation of the emissions report and verification statement will be required, i.e. one for Malaysia-only and one for worldwide emissions. The organisation must also use appropriate methodologies and default values based on the location where the emissions occur.
2.2 organisational BoundariesOne of the first steps in developing a GHG emissions accounting and reporting is for the organisations to decide and stipulate what their organisational boundary is. An organisation selects an approach for consolidating GHG emissions and then consistently applies the selected approach to define the operations and processes that constitute the organisations.
The three established approaches (equity share, financial control and operational control approaches) that can be used to consolidate GHG emissions are:
Figure 6: Overview of organisation boundary
Organisation boundary
Equity share approach Control approach
An organisation account for GHG emissions from operations according to its share of equity in the operation (typically aligned with ownership percentage).
An organisation account for 100% of the GHG emissions from operations over which it has control over. It does not account for GHG emissions from operations in which it owns an interest but has no control. There is a potential for double-counting if more than two (2) organisations hold mutual interests but use dierent approaches. The control approach can be dened in either nancial or operational terms.
An organisation has nancial control over the operations if it can direct the nancial and operating policies with a view of gaining economic benets from its activities.
Financial control approach
An organisation has operational control over an operation if the organisations or one of its subsidiaries have full authority to introduce and implement its operating policies regarding the specic operations.
Operational control approach
10
The diagram in Figure 6 depicts a clearer view on how an organisation can determine its organisational boundaries. For example, a parent company (reporting entity) which
Figure 7: How to determine organisational boundaries
chooses to report its emissions based on financial control should consider reporting on 100% of its emissions.
If it chooses to report based on operational control then it should report on 100% of emissions from
operations it controls where as if it chooses to report based on equity share X%, then it
should report on X% of its emissions.
case study: Company Theta Reporting on the
basis of operational control
In the oil and gas industry, ownership and control structures are often complex. A group may own less than 50% of a ventures equity capital but have operational control over the venture. On the other hand, in some situations, a group may hold a majority interest in a venture without being able to exert operational control, for example, when a minority partner has a veto vote at the board level. Because of these complex ownership and control structures, Theta, a global group of energy and petrochemical companies has chosen to report its GHG emissions on the basis of operational control. By reporting 100% of GHG emissions from all ventures under its operational control,irrespective of its share in the ventures equity capital, Theta can ensure that the GHG emissions reporting is in line with its operational policy including its Health, Safety and Environmental Performance Monitoring and Reporting Guidelines. Using the operational control approach, the group generates data that is consistent, reliable and meets its quality standards.
Parent company
Control condition?Approach to emission
reporting
Financial controlReport on 100% of
emissions
Operational controlReport on 100% of
emissions from operations it controls
Equity share X%Report on X% of
emissions
reporting tipsMeasure or calculate an organisations emissions based on Malaysian operations
only.
It may be challenging to collect data from the organisations operations. However, organisations should make best endeavours to collect data from their Malaysian operations to give a complete picture of their operations. Emissions outside of Malaysia geographical boundary should report separately.
Additional tips for determining boundary lines can be referred to Annex A - Steps to Determine Organisational Boundaries.
reporting tipsApply the chosen organisational boundaries
approach consistently.
The operational control approach will be the main option and equity share approach will serve as an alternative option followed by the financial control approach. The operational control approach is recommended because the potential of controlling and reducing GHG can be more realistic through activity control.
Level of Control
Wholly-owned
Partially-owned with financial and operational control
Partially-owned with financial control; no operational control
Partially-owned with operational control; no financial control
Not owned but have a capital or financial lease
Not owned but have an operating lease
% GHG emissions to report
100%
100%
0%
100%
100%
100%
2.3 operational Boundaries: Identify the GHG emissions SourcesAfter an organisation has determined its organisational boundaries in terms of its own control, it can then set its operational boundaries where an organisation need to identify which activities in their organisation/ organisations are responsible for GHG emissions being released into the atmosphere. This involves identifying emissions associated with its operations, categorising them as direct or indirect emissions and
choosing the scope of accounting and reporting.
Corporate Standard c a t e g o r i s e s emissions sources into Scope 1, Scope 2 and Scope 3 activities. A summary of the different types of emission sources is illustrated and described in Figure 8.
Figure 8: Illustration of scopes and emissions across a value chain
2.3.1 Scope 1 (All direct emissions)Direct emissions occur from sources that are owned or controlled by the organisations, for example, emissions from combustion in owned or controlled boilers, furnaces or vehicles and emissions from chemical production in owned or controlled process equipment. Direct CO2 emissions from the combustion of biomass shall not be included in Scope 1 but reported separately (see Chapter 9 of the Corporate Standard).
GHG emissions not covered by the UNFCCC/Kyoto Protocol, e.g. chlorofluorocarbons (CFCs), nitrogen oxide (NOx), etc. shall not be included in Scope 1 but maybe reported separately (see Chapter 9 of the Corporate Standard).
2.3.2 Scope 2 (Indirect emissions)Indirect emissions are GHG emissions which are being released into the atmosphere and are associated with the generation of purchased electricity consumed in its owned or controlled equipment or operations in the organisations. The emissions are a consequence of the organisations activities but which occur at sources which the reporting organisation does not own or control. Transmission and distribution (T&D) losses are considered emissions of the company or organisation that controls the T&D operations.
2.3.3 Scope 3 (other Indirect emissions)Scope 3 is a consequence of the activities of the organisations but occurs from sources not owned or controlled by them. Some examples of Scope 3 activities are extraction and production of purchased materials, transportation of purchased fuels and the use of sold products and services. Leased assets, outsourcing and franchises may be accounted in Scope 3.
CO2 SF6 CH4 N2O HFCs PFCs
SCOPE 2INDIRECT
SCOPE 1DIRECT SCOPE 3
INDIRECT
purchased electricity for own use
company owned
vehiclesfuel combustion
product use
outsourced activities
production of purchased materials
business travel
waste disposal
contractor owned vehicles
NF3
Source: Adopted from GHG Protocol Corporate Standard Accounting and Reporting Standard
MYCarbon GHG Reporting Guidelines
12
The programme proposed that reporting for Scope 3 emissions to be voluntary at the start of the programme. Nonetheless, it shall be encouraged. Sectors with particularly high Scope 3 emissions shall be prioritised.
2.3.4 Co2 emissions from Biogenic CombustionCO2 produced from the combustion of biomass or biofuels, i.e. combustion of biomass for electricity and/or heat generation should be reported separately to emissions in Scopes 1, 2 and 3; reported for informational purposes, but not included in organisations totals. This is because the CO2 would have been emitted anyway when the plants from which the biomass are derived, decay naturally at the end of their life.
However, two other GHGs, N2O and CH4 are commonly emitted when biomass is combusted. These would not be emitted during natural decay and any N2O or CH4 emissions from biomass or biofuel consumption should therefore, be included in the organisations GHG emissions under the three scopes.
CO2 produced from biomass or biofuels not as a result of the combustion of biomass or biofuels, i.e. industrial fermentation should also be reported within the scopes.
Figure 9: Example of emissions sources
Scope 1: Direct
Mandatory
Fuels Combustion (e.g. boilers, gensets
or turbines)
Owned Vehicle (e.g. trucks, trains, ships, airplanes and cars)
Process Emissions (e.g. cement, aluminium
and waste processing)
Fugitive Emissions (e.g. air-conditioning
and refrigeration leaks and methane leaks
from pipelines)
Scope 2: Indirect
Mandatory
Consumption of purchased electricity,
heat, steam and cooling for own use
Scope 3: Other
indirectOptional
Purchased materialsand fuels (e.g.
extraction, processing and production)
Transport-relatedactivities, from / to point of ownership
transfer (e.g. commuting, business
travel, distribution)
Waste disposal (e.g. waste and recycling)
Leased assets, franchising and
outsourcing
Sold goods and services (e.g. use of goods and services)Note:
Some examples of Scope 3 activities. There are a total of 15 activities which fall under Scope 3.
reporting tipsMandatory: Organisations must determine and measure/ calculate emissions that fall
under their Scopes 1 and 2.
It is recommended to draw a diagram depicting the boundary for the reporting organisation.
Optional: Organisations to include Scope 3 emissions and how many levels up the supply chain they want to investigate.
The Corporate Standard states that Scope 3
emissions should be reported if they are: (a) Significant in the context of the whole GHG
accounting and reporting(b) Material to stakeholders(c) Easy to reduce
Additional tips to decide which Scope 3 emissions to measure or calculate can be referred to Annex B - Steps to Determine Operational Boundaries.
13
reporting tipsMandatory: Organisations must determine and measure/ calculate emissions that fall
under their Scopes 1 and 2.
emissions should be reported if they are: (a) Significant in the context of the whole GHG
accounting and reporting(b) Material to stakeholders(c) Easy to reduce
Additional tips to decide which Scope 3 emissions to measure or calculate can be referred to Annex B - Steps to Determine Operational Boundaries.
case study: How does a large retail trade organisation, company Alphai identifies which of its activities release GHG
emissions into the atmosphere?
The Company Alpha diagram below shows which activities were included and excluded in its GHG emissions reporting.
The dotted line represents the boundary line. Every source of emissions located within the dotted line is included in Company Alphas GHG emissions reporting while the ones located out of the dotted line are not included.
Company Alphas approach:
Scope 1 These are the direct GHG emissions that originate from assets that Company Alpha owns or controls. For example, these include emissions from gas and other fuel consumption in their stores, distribution centres and offices. Company Alpha also includes emissions from fuel consumption in their owned vehicles transporting the products that they sell. As well as energy, Company Alpha also includes emissions from refrigerant gas leakage from systems in their stores or their vehicles.
Scope 2 This includes the indirect GHG emissions from the generation of electricity and district heating which Company Alpha uses.
Scope 3 This includes other indirect GHG emissions generated along Company Alphas value chain. Under Scope 3 emissions, Company Alpha reports business travel and emissions from distribution arranged by them but provided by third parties. Business travel includes travel by air, rail, company car, taxi and short-term hire car.
Company Alpha follows the operational control approach to help them determine when to include emissions within their GHG emissions. Company Alphas operational boundary (shown in the diagram) includes operations where they have full authority to introduce and implement operating policies. In the case of emissions from distribution, Company Alpha also includes journeys which are provided by third parties but have been arranged by them. These are included in their Scope 3 emissions.
The main direct emissions-generating activities of Company Alpha are the operation of stores and distribution centres (property), the transport of goods (distribution) and employee business travel.
14
Alpha owned and leased oces and buildings
Refrigerantemissions
Alpha distribution centres
Primary distribution
(UK only) Secondary distribution
Trunking
Business travel
Alpha owned and leased
stores
Alpha homedelivery
Store and oce construction and
demolition
International freight
Production of goods, and provision of
services
Supplier transport
Customer transport
Consumption and disposal
of goods
Waste recycling and disposal
Employee commuting
case study:
Company Lambda Accounting for out sourced transportation services
Company Lambda serves large loads and special transport needs as well as worldwide express package and document deliveries and offers courier, express, parcel, systemised and speciality business services. The company found that 98% of its emissions originate from the transport of goods via out sourced partner transportation firms. Each partner is required, as an element of the subcontract payment scheme, to enter data on vehicles used, distance travelled, fuel efficiency and background data. This data is used to calculate total emissions via a tailored calculation tool for out sourced transportation which gives a detailed picture of its Scope 3 emissions. Linking data to specific carriers allows the company to screen individual carriers for environmental performance and affect decisions based on each carriers emissions performance which is seen through Scope 3 as Lambdas own performance. By including Scope 3 and promoting GHG reductions throughout the value chain, Lambda increased the relevance of its emissions accounting and
reporting, expanded opportunities for reducing its impacts and improved its ability to recognise cost-saving
opportunities. Without Scope 3, Lambda would have lacked much of the information needed to
be able to understand and effectively manage its emissions.
15
Other activities are excluded for two main reasons: a lack of data (e.g. emissions from waste) or because they fall outside of Company Alphas direct control (e.g. use phase of goods). It is possible that any of the activities currently excluded be included as better information becomes available in the future or as Company Alpha is able to influence those activities more directly. It is also important to note that Company Alpha is taking steps to reduce emissions in some areas even though full data is not yet reported, e.g. through products GHG emissions report and diverting 100% of waste from the landfill.
In line with their operational control approach, emissions from the following businesses and sources are not included in the reporting: Company Alphas mobile services these are delivered using Company Betas mobile network
infrastructure and these emissions are reported within Company Betas GHG emissions. Company Gamma Company Alpha owns a part stake in this business and do not have full
operational control. Company Alphas direct home delivery these are carried out by separate companies where
Company Alpha does not have control over the delivery operations. Independent external assurance of Company Alphas GHG emissions reporting
has been provided by sustainability consultancy Company Delta.
Scope
Scope 1
Scope 2
Scope 3
TOTAL
emissions (tCo2)
6,500
52
327,642
334,194
Image courtesy of Castillo Dominici / FreeDigitalPhotos.net
Other activities are excluded for two main reasons: a lack of data (e.g. emissions from waste) or because they fall outside of Company Alphas direct control (e.g. use phase of goods). It is possible that any of the activities currently excluded be included as better information becomes available in the future or as Company Alpha is able to influence those activities more directly. It is also important to note that Company Alpha is taking steps to reduce emissions in some areas even though full data is not yet reported, e.g. through products GHG emissions report and diverting 100% of waste from the landfill.
In line with their operational control approach, emissions from the following businesses and sources are not included in the reporting: Company Alphas mobile services these are delivered using Company Betas mobile network
infrastructure and these emissions are reported within Company Betas GHG emissions. Company Gamma Company Alpha owns a part stake in this business and do not have full
operational control. Company Alphas direct home delivery these are carried out by separate companies where
Company Alpha does not have control over the delivery operations. Independent external assurance of Company Alphas GHG emissions reporting
has been provided by sustainability consultancy Company Delta.
MYCarbon GHG Reporting Guidelines
FAQ
1. Am I required to report emissions from the combustion of biomass?Yes, it is necessary for reporters to calculate and report the quantity of CH4 and N2O emissions from the combustion of biomass materials. This does not include emissions resulting from land clearing. The CO2 emissions from biomass combustion must be calculated and reported separately in the report.
These CO2 emissions should not be included as part of the total emissions. However, the CH4 and N2O emissions are to be included in each of the GHG type emissions totals. Materials to be considered as biomass materials are:
Plants or plant materials, animal waste or any product made of either of these Wood and wood products, charcoal and agricultural residues and wastes (including organic
matter such as trees, crops, grasses, tree litter or roots) Biologically-derived organic matter portion in municipal and industrial wastes; inclusive of
wastewater treatment sludge from pulp and paper plants. It is important to note that only the biomass portion of industrial or municipal waste should be included in this category. If the portion derived from fossil fuels is combusted, the emissions from this portion must follow the rules for non-biomass based sources
Bio-alcohols Black liquor Gas from landfill Gas from sludge Animal- or plant-derived oils
2. If most of the CO2 emissions from my organisation are from the burning/combustion of natural gas in the boilers and furnaces, do they count as CO2 emissions from the combustion of biomass
1 ?No, because fossil fuel is a standard commercial natural gas and hence, does not fall into the category of biomass fuels. All GHG emissions from the commercial natural gas combustion (e.g. CO2, CH4 and N2O) must be reported and counted in emissions totals or when the organisation is assessing reporting threshold.
Only specialised, biomass-derived gas (e.g. CH4 produced from a digester or landfill and usually used on site) would be considered as a biomass fuel.
1 CO2 emissions from the combustion of biomass materials are not included in the total for stationary fuel combustion as it is assumed that the biomass is produced in a sustainable manner.
16
Image courtesy of renjith krishnan / FreeDigitalPhotos.net
TraCking emissions over Time (base year) describes the major steps for establishing a base year. The key questions to be answered in this chapter are:
What is a base year and why do I need one? My emissions change with acquisitions and divestitures. How do I account for these?
Establishing a base year is important for organisations in order to track its emissions over time. The reasons that lie behind this are because
of the organisations may be restructured over time such as acquisitions, divestments and mergers and they may also need to track emissions over time in response to a variety of business goals, including:
Public reporting Established GHG targets Managing risks and opportunities Addressing the needs of investors and other
stakeholders
A meaningful and consistent comparison over this time requires a recalculation of historic emissions data. Accordingly, organisations need to choose and report on a base year.
3.1 Choosing a Base YearBase year should be the earliest year that verifiable emissions data is available. It can be chosen either as a single year or a multi-year average (e.g. 2006-2008). Reasons for choosing that particular year need to be specified.
The reporting base year can also be used as a basis for GHG targets base year to set and track progress towards a GHG target.
17
reporting tipsA multi-year average may help smooth out unusual fluctuations in GHG emissions that would make a single years data unrepresentative of the organisations
typical emissions profile.
Organisation which chooses to have its base year data similar with its emissions year data should not need to report its base year data provided that it is clearly mentioned in the report.
For new reporting organisation, the base year can be the same as the reporting year.
reporting tips
To allow meaningful comparisons, organisation should use the same method to calculate their emissions in subsequent years as they do in their base year. If organisation changes their method of calculation, adjust the base year calculations accordingly.
reporting tipsA multi-year average may help smooth out unusual fluctuations in GHG emissions that would make a single years data unrepresentative of the organisations
typical emissions profile.
Organisation which chooses to have its base year data similar with its emissions year data should not need to report its base year data provided that it is clearly mentioned in the report.
For new reporting organisation, the base year can be the same as the reporting year.
reporting tips
It is recommended that an organisation only recalculate its base year if the changes meet their significance threshold. The assumptions used in making base year emissions recalculations should be included.
MYCarbon GHG Reporting Guidelines
3.2 recalculating Base Year emissions
3.2.1 develop a Base Year recalculation PolicyA base year recalculation policy should be developed which clearly explains the basis and context for any recalculations and should be applied in a consistent manner. If applicable, the policy shall state any significance threshold applied for deciding on historic emissions recalculation. Organisations need to determine the significance threshold that triggers base year emissions recalculation and to disclose it whereas the verifier will confirm the organisations adherence to its threshold policy.
Significance threshold determination may want to take into account the cumulative effect of different scenarios to the organisations base year emissions. To recalculate an organisations GHG emissions data, it can be done either for all years between the base year and the reporting year or just the previous year and the reporting year following a base year recalculation. In some circumstances following very large structural changes or mergers, it may be simpler to roll an organisations base year forward to its current reporting year.
3.2.2 determine whether the Base Year Needs to be recalculatedThe following process can be the key to determine whether an organisation needs to recalculate its base year:
Identify any changes that have occurred to the organisation in the reporting period which may require a base year recalculation
Apply the conditions in the table below to help to determine which changes may require a base year recalculation
Table 1: Basic rules for base year emissions recalculations
Change Scenario Base Year recalculation
Mergers, Acquisitions and Divestitures
1. Acquisition of (or in sourcing) facility from another organisation
a. Facility existed in organisations base year
Recalculate organisations base year to include the emissions from the new facility (at the level the emissions were in its base year).
In respect of in sourcing, recalculate organisations base year if the acquired emissions were not included in its base year emissions total and will be included in its current years total.
b. Facility that did not exist in organisations base year
No base year recalculation is required.
18
case study: Company Iota Recalculation
of base year emissions because of acquisition
Company Iota consists of two (2) business units (A and B). In its base year (Year 1), each business unit emits 25tCO2. In Year 2, the company undergoes organic growth, leading to an increase in emissions to 30tCO2 per business unit, i.e. 60tCO2 in total. The base year emissions are not recalculated in this case. At the beginning of Year 3, the company acquires production facility C from another company. The annual emissions of facility C in Year 1 were 15tCO2 and 20tCO2 in Year 2 and 3 respectively. The total emissions of Company Iota in Year 3, including facility C are therefore, 80tCO2. To maintain consistency over time, the company recalculates its base year emissions to take into account the acquisition of facility C. The base year emissions increase by 15tCO2 the quantity of emissions produced by facility C in Iotas base year. The recalculated base year emissions are 65tCO2. Iota also (optionally) reports 80tCO2 as the recalculated emissions for Year 2.
Change Scenario Base Year recalculation
2. Disposal of (or outsourcing) a facility to another company
a. This facility existed in organisations base year
Recalculate organisations base year to subtract the emissions from the disposed facility (at the level the emissions were in its base year).
In respect of outsourcing, recalculate organisation base year if the out sourced emissions were included in its base year emissions total and will not be included in its current years emissions total.
b. Facility that did not exist in organisations base year
No base year recalculation is required.
Mergers, Acquisitions and Divestitures
3. Transfer of ownership or control of emissions sources. This includes changes in lease status
Increased ownership should be treated in the same way as a new acquisition (follow scenarios 1a and 1b conditions above).
Decreased ownership should be treated in the same way as a disposal (follow scenarios 2a and 2b conditions above).
4. Organic growth:
Increase in production output Change in product mix Opening of new plants or operating units owned or
controlled by the company
No base year recalculation is required.
5. Organic decline:
Decrease in production output Changes in product mix Closing of plants or operating units owned or controlled
by the company
No base year recalculation is required.
Changes in Quantification Methodologies or Errors
6. Changes in emission factors or methodologies (e.g. change in activity data) that reflect real changes in emissions (i.e. changes in fuel type or technology)
No base year recalculation is required.
7. Changes in measurement methodologies, improvements in the accuracy of emission factors or activity data or discovery of previous errors or number of cumulative errors
Recalculate base year emissions to be consistent with new approach or to correct errors.
Where there have been changes for which it is recommended to recalculate an organisations established base year if these meet the significance threshold in the organisations base year recalculation policy.
19
case study: Company Iota Recalculation
of base year emissions because of acquisition
Company Iota consists of two (2) business units (A and B). In its base year (Year 1), each business unit emits 25tCO2. In Year 2, the company undergoes organic growth, leading to an increase in emissions to 30tCO2 per business unit, i.e. 60tCO2 in total. The base year emissions are not recalculated in this case. At the beginning of Year 3, the company acquires production facility C from another company. The annual emissions of facility C in Year 1 were 15tCO2 and 20tCO2 in Year 2 and 3 respectively. The total emissions of Company Iota in Year 3, including facility C are therefore, 80tCO2. To maintain consistency over time, the company recalculates its base year emissions to take into account the acquisition of facility C. The base year emissions increase by 15tCO2 the quantity of emissions produced by facility C in Iotas base year. The recalculated base year emissions are 65tCO2. Iota also (optionally) reports 80tCO2 as the recalculated emissions for Year 2.
case study: Company Eta Recalculation of base year
emissions because of divestments
Company Eta consists of three (3) business units (A, B and C). Each business unit emits 25tCO2 and the total emissions for the company are 75tCO2 in the base year (Year 1). In Year 2, the output of the company grows, leading to an increase in emissions to 30tCO2/ business unit, i.e. 90tCO2 in total. At the beginning of Year 3, Eta divests business unit C and its annual emissions are now 60tCO2, representing an apparent reduction of 15tCO2 relative to the base year emissions.
However, to maintain consistency over time, the company recalculates its base year emissions to take into account the divestment of business unit C. The base year emissions are lowered by 25tCO2 the quantity of emissions produced by the business unit C in the base year. The recalculated base year emissions are 50tCO2 and the emissions of Eta are seen to have risen by 10tCO2 over the three (3) years. Eta (optionally) reports 60tCO2 as the recalculated emissions for Year 2.
MYCarbon GHG Reporting Guidelines
20
25
25
30
30
30
30
20
30
30
20
20
25
25
15
15
30
30
20
20
10
25
50
60
25
50
80
Figure reported in respective years
Facility C emissions
1 2 3
1 2 3
Recalculated gures
IOTA
EM
ISSI
ON
S
Facility C
Unit B
Unit A
Base Year
Increase in Production
Iota Acquires C
Legend
Source: Adopted from GHG Protocol Corporate Standard Accounting and Reporting Standard
25
25
30
30
30
30
30
30
25
25
30
30
30
10
25
50
60
25
50
60
Figure reported in respective years
1 2 3
1 2 3
Recalculated gures
ETA
EM
ISSI
ON
S
Unit C
Base Year
Increase in Production
Eta Divests C
Legend
25
30
30Unit B Unit A
Source: Adopted from GHG Protocol Corporate Standard Accounting and Reporting Standard
case study: Company Kappa Recalculation of base year emissions because of acquisition of a facility that came into existence after the base year was set
Company Kappa consists of two (2) business units (A and B). In its base year (Year 1), the company emits 50tCO2. In Year 2, the company undergoes organic growth, leading to an increase in emissions to 30tCO2 per business unit, i.e. 60tCO2 in total. The base year emissions are not recalculated in this case. At the beginning of Year 3, Kappa acquires a production facility C from another company. Facility C came into existence in Year 2, its emissions being 15tCO2 in Year 2 and 20tCO2 in Year 3. The total emissions of Company Kappa in Year 3, including facility C are therefore, 80tCO2. In this acquisition case, the base year emissions of company Kappa do not change because the acquired facility C did not exist in Year 1 when the base year of Kappa was set. The base year emissions of Kappa therefore, remain at 50tCO2. Kappa (optionally) reports 75tCO2 as the recalculated figure for Year 2 emissions.
Once the organisations boundaries have been established and a base year is recognised,the organisations are then able to calculate their GHG emissions.
21
25
25
30
30
30
30
30
30
25
25
30
30
20
25
50
60
25
50
60
Figure reported in respective years
1 2 3
1 2 3
Recalculated gures
KAPP
A E
MIS
SIO
NS
Unit C
Base Year
Increase in Production
Kappa Acquires C
Legend
20
Unit B Unit A
15
15 20
Source: Adopted from GHG Protocol Corporate Standard Accounting and Reporting Standard
idenTiFying and CalCulaTing ghg emissions explores the issues in identifying and calculating GHG emissions in terms of its calculation and emissions factors and applying calculation tools. The key questions to be answered in this chapter are:
How do I identify my organisations emissions sources?
What kinds of tools are there to help me calculate emissions?
What data collection activities and data management issues does my organisation have to deal with?
4.1 Calculation and emissions FactorTo ensure accurate GHG accounting and reporting, the organisations must apply appropriate and consistent calculation method and emissions factors. There are generally five (5) steps in identifying and calculating an organisations emissions as shown in the figure below:
Figure 10: Steps in identifying and calculating an organisations emissions
Identify sources
Select calculation approach
Collect data and choose emissions factors
Apply calculation tools
Roll-up data to corporate level
Source: Adopted from GHG Protocol Corporate Standard Accounting and Reporting Standard
case study: Company Kappa Recalculation of base year emissions because of acquisition of a facility that came into existence after the base year was set
Company Kappa consists of two (2) business units (A and B). In its base year (Year 1), the company emits 50tCO2. In Year 2, the company undergoes organic growth, leading to an increase in emissions to 30tCO2 per business unit, i.e. 60tCO2 in total. The base year emissions are not recalculated in this case. At the beginning of Year 3, Kappa acquires a production facility C from another company. Facility C came into existence in Year 2, its emissions being 15tCO2 in Year 2 and 20tCO2 in Year 3. The total emissions of Company Kappa in Year 3, including facility C are therefore, 80tCO2. In this acquisition case, the base year emissions of company Kappa do not change because the acquired facility C did not exist in Year 1 when the base year of Kappa was set. The base year emissions of Kappa therefore, remain at 50tCO2. Kappa (optionally) reports 75tCO2 as the recalculated figure for Year 2 emissions.
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Step 1: Identify SourcesFirst of all, an organisation should identify its direct and/or indirect emissions sources in each of its processes, products or services. Typically, GHG emissions occur from the four (4) following source categories:
Table 2: Four (4) main emissions source categories
The identification of direct emissions is referred to as Scope 1 emissions, electricity indirect emissions are Scope 2 emissions while other indirect emissions are categorised as Scope 3 emissions.
Step 2: Select Calculation ApproachThe next step in calculating GHG emissions is to select the calculation approach. There are several approaches which could be taken such as the following:
a) Direct measurement of GHG emissions by monitoringb) Calculated based on mass balance or stoichiometric basis specific to a facility or processc) Application of documented emissions factors
Direct monitoring may be expensive and difficult to be implemented. On the other hand, the most common approach for calculating GHG emissions is to apply documented emissions factors to known activity data from the organisations. Depending on each organisation, they should use the most accurate calculation approach available which is appropriate for reporting. If it is not possible to calculate emissions from known activity data, the organisation needs to estimate its emissions and extrapolate on the basis of known activity data. All the methods used have to be justified and explained during reporting.
Step 3: Collect data and Choose emissions FactorsGenerally, for most small to medium-sised companies and for many larger companies, Scope 1 emissions are calculated based on the purchased quantities of commercial fuels using published emissions factors while for Scope 2, emissions are primarily calculated from metered electricity consumption and supplier-specific, local grid or other published emissions factors. As for Scope 3, activity data such as fuel use or passenger miles and published or third-party emissions factors will be used. In most cases, source- or facility-specific emissions factors are preferable to more generic or general emissions factors if they are available. Section 4.2 Common Emissions Sources and Activity Data provides detailed information on the possible activity data for each of the scopes.
Local emissions factors will be applied for Scope 2 purchased electricity, i.e. the grid emissions factor calculated in the Study on Grid Connected Electricity Baselines in Malaysia by Malaysian Green Technology Corporation (MGTC).
23
Stationary combustion
Mobile combustion
Process emissions
Fugitive emissions
Combustion of fuels in stationary equipment Examples: boilers, furnaces, burners, turbines, heaters, incinerators,
engines, flares, etc.
Combustion of fuels in transportation devices Examples: automobiles, trucks, buses, trains, airplanes, boats, ships,
barges, vessels, etc.
Emissions from physical or chemical processes Examples: CO2 from the calcination step in cement manufacturing,
CO2 from catalytic cracking in petrochemical processing, PFC emissions from aluminium smelting, etc.
Intentional and unintentional releases Examples: equipment leaks from joints, seals, packing, gaskets,
fugitive emissions from coal piles, wastewater treatment, pits, cooling towers, gas processing facilities, etc.
reporting tips
Measure or calculate emissions from the 7 GHGs covered by the UNFCCC/ Kyoto Protocol.
reporting tips
The grid emissions factors will be updated every year or when necessary and therefore, the latest values available should be used for GHG reporting which is in accordance with the methodology used to calculate the emissions factor, i.e. Tool to calculate the emissions factor for an electricity system, version 01,EB35, Annex 12. For emissions factors or values other than those for Scope 2 purchased electricity such as the carbon content of fuel, calorific/heating value of fuel, fuel density, oxidation fraction or any other process-specific factors or values, the values recommended (due to the reasons that they are more accurate / suitable / easily available, etc.) by the respective calculation tools used, e.g. the calculation tools available from GHG Protocol shall be followed. In case there are no recommendations provided or the recommended factors are not available or appropriate for use, the Intergovernmental Panel on Climate Change (IPCC)s default values can be used (Source: http://www.ipcc-nggip.iges.or.jp/public/2006gl/index.html). In all other cases where the IPCCs default values are not available for use, values from other reputable, commonly-used or official sources can be used provided that justification is provided and the sources are stated.
Designing a good data collection system can reduce errors caused by in accurate data and/or data input mistakes. Some good data collection practices include:
Requesting data in familiar units Requesting data from metered or measured
sources when possible; they may be more accurate than purchase records
Establishing internal control systems to catch errors
Undertaking regular checks for technical errors. Technical errors include incomplete identification of emissions sources, use of incorrect methods or assumptions, use of incorrect data, and mistakes in data entry
reporting tips
The final unit of the GHG emissions are in tCO2. In the calculations, it is important to take note and convert the activity data into the desired unit, compatible with the emissions factors before you calculate the data. For example:
A MWh x B tCO2/MWh = C tCO2For some calculations, data in other units might be provided. Ensure that all the units are compatible before you come out to the final calculation by referring to the list of unit conversion factors in Annex C - Global Warming Potentials (GWPs), Default Values & Emission Factors). For example:
C tCO2 x D (GWP) = E tCO2e
MYCarbon GHG Reporting Guidelines
reporting tips
The grid emissions factors will be updated every year or when necessary and therefore, the latest values available should be used for GHG reporting which is in accordance with the methodology used to calculate the emissions factor, i.e. Tool to calculate the emissions factor for an electricity system, version 01,EB35, Annex 12. For emissions factors or values other than those for Scope 2 purchased electricity such as the carbon content of fuel, calorific/heating value of fuel, fuel density, oxidation fraction or any other process-specific factors or values, the values recommended (due to the reasons that they are more accurate / suitable / easily available, etc.) by the respective calculation tools used, e.g. the calculation tools available from GHG Protocol shall be followed. In case there are no recommendations provided or the recommended factors are not available or appropriate for use, the Intergovernmental Panel on Climate Change (IPCC)s default values can be used (Source: http://www.ipcc-nggip.iges.or.jp/public/2006gl/index.html). In all other cases where the IPCCs default values are not available for use, values from other reputable, commonly-used or official sources can be used provided that justification is provided and the sources are stated.
Designing a good data collection system can reduce errors caused by in accurate data and/or data input mistakes. Some good data collection practices include:
Requesting data in familiar units Requesting data from metered or measured
sources when possible; they may be more accurate than purchase records
Establishing internal control systems to catch errors
Undertaking regular checks for technical errors. Technical errors include incomplete identification of emissions sources, use of incorrect methods or assumptions, use of incorrect data, and mistakes in data entry
With reference to The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition), Global Warming Potential (GWP) is a factor describing the radiative forcing impact (degree of harm to the atmosphere) of one unit of a given GHG relative to one unit of CO2. The GWP of methane (CH4) is 25. A list of GWPs of the 7 GHGs covered by the Kyoto Protocol, common default values and emissions factors are in Annex C - Global Warming Potentials (GWPs), Default Value and Emissions Factor. These serve as a source of reference to those who has not decided on any value for the calculations. In case where other values are used, justifications and reasons should be provided.
Step 4: Apply Calculation ToolsThe general equation for calculating GHG emissions are as shown below:
Actual/Estimated Activity Data x Emissions Factor = GHG emissions
In order to provide a single metric that embodies all GHGs, it is a standard practice to report GHG emissions in metric tonnes of carbon dioxide equivalent (mtCO2e). However, other common units have also been used, e.g. tCO2. More details about the application of calculation tools are presented in Section 4.3 Applying Calculation Tools.
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Step 5: roll-up data to Corporate Level
An organisation will need to gather and summarise data from multiple facilities which might be located in different countries and business divisions. But, please note that only Malaysian operations emissions data are accounted in the report. This final step of calculating GHG emissions should be planned carefully so as to reduce the risk of errors, minimise reporting burden and ensure that the information are collected on an approved, consistent basis. It is recommended that a standardised reporting format be used to ensure that the data and information received from different facilities is comparable besides reducing the risk of errors.
The choice of tools and processes used in data reporting depends on the information and communication infrastructure in place. In other words, how easy it is to include new data categories in corporate databases. Besides that, it is also dependent on the amount of detail that corporate headquarters wishes to be reported from facilities. Examples of the data collection and management tools include secure database available over the company intranet or internet (for direct data entry by facilities), spreadsheet templates filled out and e-mailed to corporate or division office (where data is processed further) and paper reporting forms faxed to a corporate or division office (where data is re-entered in a corporate database).
Basically, there are 2 approaches for gathering data from a corporations facilities:
a) Centralised approach individual facilities will report activity/fuel use data to the corporate level where GHG emissions are calculated
b) Decentralised approach individual facilities collect activity/fuel use data, directly calculate their GHG emissions using approved methods and report the data to the corporate level
Not much difference can be found in these two (2) approaches except in where the emissions calculations occur and in what type of quality management procedures have to be practised at each level of the corporation.
One may prefer the centralised approach if the staff at the corporate or division level can calculate emissions data in a straight forward manner on the basis of activity/fuel use data and if the emissions calculations are standard across a number of facilities.
On the other hand, facilities may prefer the decentralised approach if:
GHG emissions calculations require detailed knowledge of the kind of equipment being used at facilities
GHG emissions calculation methods vary across a number of facilities
Process emissions (in contrast to emissions from burning fossil fuels) make up an important share of total GHG emissions
Resources are available to train facility staff to conduct these calculations and to audit them
A user-friendly tool is available to simplify the calculation and reporting task for facility-level staff
Local regulations require reporting of GHG emissions at a facility level
Some common reporting categories for both of the approaches which are recommended to be reported include:
A brief description of the emissions sources
A list and justification of specific exclusion or inclusion of sources
Comparative information from previous years
The reporting period covered
Any trends evident in the data
Progress towards any business targets
25
A discussion of uncertainties in activity/ fuel use or emissions data reported, their likely cause, and recommendations for how data can be improved
A description of events and changes that have an impact on reported data (acquisitions, divestitures, closures, technology upgrades, changes of reporting boundaries or calculation methodologies applied, etc.)
Overall, the reporting organisations should choose the collection approach based on their needs and characteristics. Some may prefer to use a combination of the two (2) approaches to maximise accuracy and minimise reporting burdens. However, the two (2) approaches are not mutually exclusive and should produce the same result.
4.2 Common emissions Sources and Activity dataThe following table lists the most common emissions sources for organisations and the corresponding data that should be collected for these sources. This list is not comprehensive but should serve as a starting point for sources that are likely to appear in organisations.
Table 4: List of emissions sources information
emission-producing activity Potential activity data source
Scope 1
generation of electricity, heat or steamThese emissions result from combustion of fuels in stationary sources, e.g. boilers, furnaces and turbines
1. Fuel consumed in boilers, furnaces and turbines. For example, amount of diesel consumed/month or purchased quantities of commercial fuels (e.g. natural gas/heating oil)
2. Technical specifications of the acquirements3. Electricity bill4. Manual record of power meter5. Pressure, temperature and flow rate can be
used with standard steam tables to calculate the steams energy value
6. Emissions associated with the production of steam are highly dependent on the type of fuel burned. One needs to determine the source of the steam and which fuels were combusted for its production
Physical or chemical processingMost of these emissions result from manufacture or processing of chemicals and materials (e.g. cement, aluminium, adipic acid, ammonia manufacture and waste processing)
For example, CO2 from the calcinations step in cement manufacturing, CO2 from catalytic cracking in petrochemical processing, perfluorocarbon (PFC) emissions from aluminium smelting, etc.
transportation of materials, products, waste and employees
1. Fuel consumed in all type of the vehicles (e.g. amount of petrol filled/month)
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emission-producing activity Potential activity data source
These emissions result from the combustion of fuels in company owned/controlled mobile combustion sources (e.g. trucks, trains, ships, airplanes, buses and cars)
2. Type of fuel use for the vehicles3. Transport allowance given by the company to
employee4. Distance travelled/mileage/length and
duration of flight5. The vehicles condition (e.g. no. of year on the
road, engine efficiency, road condition, etc.)
Fugitive emissionsThese emissions result from intentional or unintentional releases, e.g. equipment leaks from joints, seals, packing and gaskets; methane emissions from coal mines and venting; HFC emissions during the use of refrigeration and air conditioning equipment and methane leakages from gas transport
1. Direct readings or from manual2. Property manager
Any other physical and chemical processing in the physical boundary which will emit or remove GHG. For example, on-site waste or sewage processing facilities in the building
Total water treated in cubic meters (m3) from water bill
Scope 2
Purchased electricity/ electricity consumption 1. Metered electricity consumption 2. Utility bill/monthly energy consumption bill
(Total kilowatt hours (kWh) used)
Purchased steam Purchased steam is typically reported in energy units to better reflect the use of the steam. The conversion of metered steam units to energy units is standardised and based on steam tables. It is recommended that steam purchasers record the quantity (mass), characteristics (temperature and pressures) and total energy of the steam purchased
Scope 3
Purchased goods and services (cradle-to-gate emissions) Extraction of raw materials Agricultural activities Manufacturing, production and processing Generation of electricity consumed by upstream
activities Disposal/treatment of waste generated by
upstream activities Land use and land-use change Transportation of materials and products
between suppliers Any other activities prior to acquisition by the
reporting company
1. Amount and type of fuel consumed by the vehicles
2. Distance travelled by the vehicles3. Mileage claimed4. Transportation allowance/subsidies by the
company5. Energy use for machines, equipment, buildings,
facilities (utility bill and technical specification of all machineries)
6. Amount and type of fuel consumed during the production process (receipts of fuel purchased)
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emission-producing activity Potential activity data source
capital goodsExtraction, production and transportation of capital goods purchased or acquired by the reporting companyExamples of capital goods include equipment, machineries, buildings, facilities and vehicles
1. Amount and type of fuel consumed by the vehicles
2. Distance travelled by the vehicles3. Mileage claimed4. Transportation allowance/subsidies by the
company5. Energy use for machines, equipment, buildings,
facilities (utility bill and technical specification of all machineries)
6. Amount and type of fuel consumed during the production process (receipts of fuel purchased)
Fuel- and energy-related activities(not included in Scope 1 or Scope 2)a. upstream emissions of purchased fuels
Extraction, production and transportation of fuels consumed by the reporting companyExamples include mining of coal, refining of gasoline,transmission and distribution of natural gas, production of biofuels, etc.
b. upstream emissions of purchased electricityExtraction, production and transportation of fuels consumed in the generation of electricity, steam, heating and cooling that is consumed by the reporting companyExamples include mining of coal, refining of fuels, extraction of natural gas, etc.
c. t&d lossesGeneration of electricity, steam, heating and cooling that is consumed (i.e. lost) in a T&D system reported by end-user
d. generation of purchased electricity that is sold to end-usersGeneration of electricity, steam, heating and cooling that is purchased by the reporting company and sold to end-usersreported by utility company or energy retailer
Note: This activity is particularly relevant for utility companies that purchase wholesale electricity supplied by independent power producers for resale to their customers
1. Amount and type of fuel consumed by the vehicles
2. Distance travelled by the vehicles3. Mileage claimed4. Transportation allowance/subsidies by the
company5. Energy use for machines, equipment, buildings,
facilities (utility bill and technical specification of all machineries)
6. Amount and type of fuel consumed during the production process (receipts of fuel purchased)
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emission-producing activity Potential activity data source
upstream transportation and distributionTransportation and distribution of products purchased by the reporting company in the reporting year between a companys tier 1 suppliers and its own operations(including multi-modal shipping where multiple carriers are involved in the delivery of a product)Third-party transportation and distribution services purchased by the reporting company in the reporting year (either directly or through an intermediary), including inbound logistics, outbound logistics (e.g. of sold products and third-party transportation and distribution between a companys own facilities. Emissions may arise from the following transportation and distribution activities throughout the value chain:
Air transport Rail transport Road transport Marine transport Storage of purchased products in warehouses,
distribution centers and retail facilities
1. Amount and type of fuel consumed by the vehicles
2. Distance travelled by the vehicles3. Mileage claimed4. Transportation allowance/subsidies by the
company
waste generated in operationsThis category includes emissions from disposal of both solid waste and wastewater. Only waste treatment in facilities owned or operated by third parties is included in Scope 3This category includes all future emissions that result from waste generated in the reporting year.Waste treatment activities may include:
Disposal in a landfill Disposal in a landfill with landfill-gas-to-
energy (LFGTE) i.e. combustion of landfill gas to generate electricity
Recovery for recycling Incineration Composting Waste-to-energy (WTE) or energy-from-waste
(EfW) i.e. combustion of municipal solid waste (MSW) to generate electricity
Wastewater treatment
Companies may optionally include emissions from transportation of waste
1. Payment bill/receipts from waste contractor2. Production and waste record in the production
plant3. Amount and type of fuel consumed by the
vehicles (when transportation of waste is involved)
4. Distance travelled by the vehicles (when transportation of waste is involved)
5. Energy use in recovery and recycling, incineration (utility bill)
6. Tonnes of waste treated by waste type (e.g. paper, glass, waste to landfill) from waste collection provider
7. Landfill has or does not have a landfill gas collection system
business travelEmissions from business travel may arise from:
Air travel Rail travel
1. Amount and type of fuel consumed by the vehicles
2. Distance travelled by the vehicles3. Mileage claimed
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emission-producing activity Potential activity data source
Bus travel Automobile travel (e.g. business travel in rental
cars or employee-owned vehicles other than employee commuting to and from work)
Other modes of travelCompanies may optionally include emissions from business travellers staying in hotels
4. Transportation allowance/subsidies by the company
employee commutingThis category includes emissions from the transportation of employees between their homes and their worksitesEmissions from employee commuting may arise from automobile travel, bus travel, rail travel, air travel and other modes of transportation Organisations may include emissions from teleworking (i.e. employees working remotely) in this category
1. Amount and type of fuel consumed by the vehicles
2. Distance travelled by the vehicles
3. Transportation allowance/subsidies by the company
upstream leased assetsOperation of assets leased by the organisations (lessee) and not included in Scope 1 and Scope 2 reported by lesseeOnly applicable to organisation that operates leased assets (i.e. lessees). For organisations that own and lease assets to others (i.e. lessors), see downstream leased assets category
1. Leased cars vehicle miles as defined in the leasing contracts
2. Leased office and storage space obtained from internal business data management systems
3. The monetary purchasing volume for leased equipment derived from internal business data management systems
downstream transportation and distributionEmissions from downstream transportation and distribution can arise from:
Storage of sold products in warehouses and distribution centers
Storage of sold products in retail facilities Air transport Rail transport Road transport Marine transport
Companies may include emissions from customers travelling to retail stores in this category which can be significant for companies that own or operate retail facilities
1. Amount and type of fuel consumed by the vehicles
2. Distance travelled by the vehicles
3. Mileage claimed
4. Transportation allowance/subsidies by the company
5. Energy use for machine, equipment, building, facilities (utility bill and technical specification of all machineries)
6. Amount and type of fuel consumed during the production process(receipts of fuel purchased)
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emission-producing activity Potential activity data source
Processing of sold productsThis category includes emissions from processing of sold intermediate products by third parties (e.g. manufacturers) subsequent to sale by the reporting companyIntermediate products are products that require further processing, transformation or inclusion in another product before use and therefore, result in emissions from processing subsequent