Scope 1 emissions – Best read

Scope 1 emissions

Scope 1 emissions are emissions from sources owned or controlled by a reporting entity. For example, emissions from equipment, a vehicle or production processes that are owned or controlled by the reporting entity are considered Scope 1 emissions. These emissions include all direct emissions within the entity’s inventory boundary.

The combination of organizational and operational boundaries make up a reporting entity’s inventory boundary, which is also called the reporting boundary. Refer to Organizational boundaries for information on organizational boundaries and Operational boundaries for information on operational boundaries.

The GHG Protocol is designed to avoid double counting GHG emissions. That is, two or more reporting entities should never account for the same emissions as Scope 1 emissions. For example, emissions from the generation of heat, electricity or stream that is sold to another entity are not subtracted from Scope 1 emissions but are reported as Scope 2 emissions by the entity that purchases the related energy.

Theoretically, if every entity and individual throughout the world reported their GHG emissions using the same organizational boundary (e.g., equity share, financial control or operational control approach), the total of all Scope 1 emissions would equal the total GHGs emitted throughout the world.

Types of Scope 1 emissions

The GHG Protocol describes four types of Scope 1 emissions: stationary combustion, mobile combustion, process emissions and fugitive emissions. The type of emissions that are included in Scope 1 will vary based on the industry and business model of the reporting entity.

For example, an office-based reporting entity that leases its facilities under operating leases may only have material Scope 1 emissions from mobile combustion because they own or operate a fleet of sales and delivery vehicles, whereas a manufacturing reporting entity may have Scope 1 emissions of all types, such as those from mobile combustion from the operation of on-site forklifts, stationary combustion from the operation of on-site dryers that are part of the manufacturing process, fugitive emissions from on-site refrigeration units and process emissions from off-gassing from the product as it goes through the manufacturing process.

The GHG Protocol includes optional calculation tools for each of these emission categories(https:// ghgprotocol.org/calculation-tools#cross_sector_tools_id).

Stationary combustion

Stationary combustion is the combustion of fuels in stationary equipment owned or controlled by the reporting entity. Stationary equipment can include boilers, furnaces, burners, turbines, heaters, incinerators, generators and engines.

Stationary combustion emissions are often created as part of the process to generate heat, electricity or steam. However, emissions from the generation of purchased or acquired heat, electricity or steam consumed by the reporting entity are Scope 2 emissions. Refer to Scope 2 Emissions for discussion of Scope 2 emissions.

Mobile combustion

Mobile combustion is the combustion of fuels in mobile equipment owned or controlled by the reporting entity. Mobile equipment can include ground vehicles, ships and planes. Mobile combustion emissions are often created during the transportation of personnel, materials, products and waste.

Process emissions

Process emissions are emissions created by physical or chemical processing used by a reporting entity to manufacture or refine materials. These emissions also include emissions generated by processing waste. Examples of process emissions include COz emitted from manufacturing concrete and PFCs emitted from smelting aluminium.

Fugitive emissions

Fugitive emissions are intentional and unintentional releases of GHGs from equipment and property owned or controlled by the reporting entity. These releases include equipment leaks, such as those from air conditioners or refrigerators, as well as emissions from coal piles, pits, wastewater treatment ponds, cooling towers and gas processing facilities.

Biogenic emissions

Biomass contains carbon that was initially removed from the atmosphere through photosynthesis and includes wood, vegetation and roots. Biomass also includes biofuels. The GHG protocol requires a reporting entity to exclude direct C02 emissions generated from the combustion of biomass and biofuels from its Scope 1 emissions. However, the direct CH4 and N20 emissions generated by the combustion of biomass should be included in Scope 1 emissions.

Calculation of Scope 1 emissions

The first step to calculate Scope 1 emissions is to identify all sources of Scope 1 emissions included in the categories listed in Types of Scope 1 emissions within a reporting entity’s inventory boundary. Once all the sources havebeen identified, a reporting entity needs to determine a calculation approach.Scope 1 emissions

There are multiple methods for calculating GHG emissions, including the following:

  • Direct monitoring (i.e., measuring the concentration of GHGs and the rate of emissions from operations and processes)
  • Calculating emissions based on a mass balance equation (i.e., an equation balancing the material entering and leaving a system based on the law of physics that matter cannot be created nor destroyed) or stoichiometric equation (i.e., an equation using the reactants and products in a balanced chemical equation) specific to a process or facility, often based on the inputs consumed
  • Estimating the GHGs emitted using activity data and emissions factors
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When determining which calculation approach to use, a reporting entity should select the most accurate calculation approach available that is consistent with the GHG Protocol’s reporting objectives, which acknowledge that reporting emissions should not be prohibitively expensive. For example, many reporting entities do not have the equipment or information needed to apply the direct monitoring or mass balance/stoichiometric equation calculation approaches.

Therefore, estimating GHG emissions using activity data and emissions factors is currently the most common approach used by reporting entities. However, regulators may require a reporting entity to monitor or measure emissions data for regulatory reporting purposes (e.g., the Environmental Protection Agency (EPA) may require some entities to monitor certain emissions using a direct monitoring approach). A reporting entity should consider all available emissions data when determining the correct calculation approach to use.

The formula to calculate Scope 1 emissions in metric tons of the relevant GHG (tGHG) based on activity data and emissions factors is as follows:

Activity data X Emissions factor = Metric tons of the relevant GHG (tGHG)

However, referring to the definition of carbon dioxide equivalent(s), the GHG Protocol considers COze to be the universal unit of measurement for GHGs. Therefore, the calculated metric tons of the relevant GHG needs to be converted to metric tons of COze by applying the GWP of the applicable GHG, which can be simplified to the following formula to calculate Scope 1 emissions in metric tons of COze (tCOze):

Activity data X Emissions factor X Global Warming Potential (GWP) = tCO2e

Activity data

Activity data is the number of times that a specific activity occurs for which an emissions factor is available and can be applied. For Scope 1 emissions, activity data is often denominated in fuel consumed (e.g., gallons of gasoline, cubic feet of natural gas) or units of product produced.

The activity data that a reporting entity obtains will depend on the nature of the operations of the reporting entity.

For example, industrial reporting entities will likely require different or additional activity data than a reporting entity in a non-industrial sector. For example, an industrial reporting entity may need to calculate the rate of GHG emissions from a production process, which can be directly monitored.

Actual activity data, such as the amount of fugitive emissions emitted by an office building air conditioning system, may not always be available. In such cases the reporting entity should estimate the relevant activity data. If significant. the nature of these estimates should be disclosed, as discussed in Required diclosures.

Emissions factors

An emissions factor is a value that represents the quantity of a specific GHG (or COze) emitted for a specific unit of activity. For example, COz emissions by fuel type for specific vehicles are common emissions factors used for calculating Scope 1 mobile emissions.

Emissions factors may come from third parties or be internally developed. When using third-party emissions factors, a reporting entity should use emission factors, where possible, that are publicly available.

A reporting entity should assess all emissions factors used, whether internally developed (i.e., custom) or third-party maintained, for appropriateness and reliability. Questions to consider when making this assessment may include:

  • Who issued the emissions factors? Are they a reputable organization? Do they have the appropriate expertise to issue emission factors?
  • What is the underlying data for the emission factors and calculation methodology used? Is the underlying data credible and supported?
  • What years do they represent? Are there any lags? How often are they updated?
  • What is the boundary for the emissions factors? Are they geographical/industry-specific?
  • What are the units of the emission factors? Which GWP are incorporated?
  • Is the nature of the emission factor appropriate given the activity data being used (e.g., fuels can have both stationary and mobile combustion emission factors, so the correct factor should be selected)?
  • Are there any adjustments made to the emissions factors (e.g., radiative forcing, well-to-tank, lower heating value vs. higher heating value)?

Not all of the considerations above are relevant for each type of emission factor. If a company chooses to use internally developed emissions factors, additional effort will be necessary to assess the appropriateness of using such factors.

A reporting entity should pay particular attention to the units of measure for third-party emissions factors. For example, emissions factors may be presented in a different measurement of the activity than the underlying data (e.g., gallons vs. liters of fuel). An understanding of the units of measure of the emissions factors and any necessary conversion is critical to calculating accurate Scope 1 emissions.

Third parties may periodically update the published emissions factors based on updated or more precise data. When multiple vintages (e.g., year the emissions factor was published) of an emissions factor are available, the GHG Protocol does not specifically require the use of the most recent emissions factor.

However, the GHG Protocol requires a reporting entity to use the most appropriate, accurate and precise and highest quality emissions factor available for each calculation. We believe that when multiple vintages of emissions factors are available, a reporting entity should use the most recent emissions factor for the full period presented unless an earlier emissions factor is the most appropriate, accurate and precise and highest quality in the specific circumstances.

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However, if emissions factors are issued after the company has begun its emissions inventory calculation, it may not be practical for an entity to apply the newly issued emissions factors. A reporting entity should develop a policy for when it updates newly issued emissions factors.

Additionally, if an emissions factor is updated during the year, we believe a single emissions factor (e.g., the new or the old based on facts and circumstance) should be used for the full year to be comply with the GHG Protocol’s consistency principle (see GHG accounting and reporting principles).

In general a reporting entity should disclose the emissions factors used to provide users of the sustainability information with appropriate context related to the reported emissions. To the extent an internally developed emissions factor is used, more detailed disclosures are warranted to be consistent with the GHG Protocol’s transparency principle (see GHG accounting and reporting principles).

A disclosure about an internally developed emissions factor may include a description of the underlying data, calculation methodologies, units, time period, boundaries, and any adjustments because this information would not otherwise be available to a user of the sustainability information as it would be for a publicly available third-party emissions factor.

Calculation tools

The GHG Protocol provides several calculation tools (generally spreadsheets) on their website (https:// ghgprotocol.org/calculation-tools) to assist reporting entities in calculating Scope 1 emissions. The use of these tools is optional and not required by the GHG Protocol. These tools are divided into three categories applicable to corporate entities:

  • Cross-sector tools: Tools that can be applied regardless of the sector in which the reporting entity operates
  • Sector-specific tools: Tools that are only applicable to reporting entities that operate in specific sectors
  • Country-specific tools: Tools that are customized for emissions in certain developing countries (e.g., China, India)

Most tools use the same structure and contain guidance on how to use the tool. The guidance for each calculation tool often contains the following:

Disclosure of Scope 1 emissions

The Corporate Standard provides specific required and optional disclosures for Scope 1 emissions. The required disclosures have to be included in the report that includes the Scope 1 emissions metric for it to be presented in accordance with the GHG Protocol.

Optional disclosures do not have to be included in the report that includes the Scope 1 emissions metric for it to be presented in accordance with the GHG Protocol.

Here is Standard 9 Reporting GHG Emissions, which includes disclosure checklist with a comprehensive list of all required, recommended and optional disclosures established by the GHG Protocol.

Required disclosures

A reporting entity is required to disclose the following information for Scope 1 emissions:

  • Total Scope 1 emissions in units of COze, presented gross (i.e., without the impact of any GHG sales, purchases, transfers or allowances) and separately from Scope 2 emissions
  • Total Scope 1 emissions disaggregated by each of the seven GHGs separately in metric tons of each GHG and metric tons of COze
  • Direct COz emissions from biologically sequestered carbon (disclosed separately from Scope 1 emissions)
  • Methods used to calculate Scope 1 emissions, including a reference or link to any calculation tools used

When disclosing the method used to calculate Scope 1 emissions, we believe a reporting entity should reference the emissions factors used and include a description of the data sources (e.g., to the extent material, actual activity data or estimated activity data).

Additionally, we believe a reporting entity should include a description of any significant assumptions used in its calculation of Scope 1 emissions. See Required disclosures for the general required disclosures established by the GHG Protocol that are not related specifically to Scope 1 emissions.

The following example illustrates how Scope 1 emissions should be disclosed on an aggregated and disaggregated basis. This example is not a complete example of an emissions report and only presents a limited number of disclosures related to Scope 1 emissions. Scope 2 emissions and Scope 3 emissions, as well as certain general disclosure requirements, are excluded for purposes of this illustration.

Example of disclosure of Scope 1 emissions

In 20X3 Company A calculated the following direct GHG emissions (i.e., Scope 1 emissions) within its reporting boundary:

  • 115 metric tons of COz, of which 15 metric tons of COz were emissions from burning biofuels (i.e., biologically sequestered carbon)
  • 5 metric tons of NzO
  • 20 metric tons of CH4

Company A prepared a report in accordance with the GHG Protocol. To convert the various greenhouse gases to COze, it used the most recent 100-year GWP values published by the IPCC (at the time of this example, NzO GWP of 273 and CH4 GWP of 28).

Below is an excerpt of some disclosures related to Scope 1 emissions presented by Company A in its sustainability report:

Fifteen metric tons of C02 were emitted from the burning of biofuels in the reporting period.

We estimated Scope 1 emissions using the Stationary Combustion and Transport or Mobile Combustion tools provided by the GHG Protocol. These emissions were primarily generated by our fleet of company vehicles and manufacturing equipment. Stationary combustion emissions factors were obtained from the IPCC 2006 Guidelines for National Greenhouse Gas Inventories, and mobile combustion emissions factors were obtained from the US EPA Climate Leaders (updated May 2008).

The global warming potentials for each GHG are sourced from the Intergovernmental Panel on Climate Change Sixth Assessment Report, 7.SM.6 Tables of greenhouse gas lifetimes, radiative efficiencies and metrics. Actual activity data based on fuel usage was used in both the stationary and mobile combustion calculations.

Scope 1 emissions

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Optional disclosures

Although the optional disclosures are not required by the GHG Protocol, it is obvious that they should be made if the reporting entity determines that excluding them would make the presentation of the GHG emissions misleading.

Excerpt from GHG Protocol:

Chapter 9 – Information on emissions and performance

A reporting entity has the option to disclose Scope 1 emissions data at a more disaggregated level than required above if the disaggregation increases the transparency of the information. This includes disaggregation of Scope 1 emissions data by business unit, facility, country, source type (see Types of Scope 1 emissions), or activity type (e.g., transportation, generation of electricity). Other optional Scope 1 disclosures include the following:

  • Scope 1 emissions from the generation of electricity, heat or steam that is sold or transferred to other entities
  • Scope 1 emissions from GHGs that are not C02, CH4, N20, HFCs, PFCs, SF6 or NF3 but have a GWP identified by the IPCC, separately from the emissions for the reported Scopes, along with a list of those GHGs included in the inventory

See Optional disclosures for other optional disclosures included in the GHG Protocol that are not specifically related to Scope 1 emissions.

Scope 1 reporting requirements from the SEC proposal, California climate laws, ESRS and ISSB standards

Under the SEC proposal, a reporting entity would disclose gross Scope 1 emissions in metric tons of C02e, both in the aggregate for Scope 1 and for each of the seven GHGs within Scope 1. Disclosure of Scope 1 emissions would be required regardless of materiality.

The impact of purchased or generated offsets would be excluded from these calculations and separately disclosed. A registrant would also be required to disclose GHG intensity metrics for each scope in terms of metric tons of C02e per unit of total revenue and per unit of production for that entity’s industry.

The California Climate Corporate Data Accountability Act (SB-253) requires reporting entities that had more than $1 billion in annual revenue in the previous fiscal year and do business in California to annually disclose their Scope 1 emissions in accordance with the GHG Protocol. These disclosures should be made in metric tons of C02e, both in the aggregate for Scope 1 and for each of the seven GHGs for Scope 1.

The California Greenhouse gases: climate-related financial risk law (SB-261) requires reporting entities with more than $500 million in annual revenue in the previous fiscal year that do business in California to biennially disclose climate-related information in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which include reporting Scope 1 emissions.

The ESRS requires an entity to separately disclose aggregate Scope 1 emissions in metric tons of C02e, if material, with the impact of purchased or generated offsets excluded and separately disclosed. An entity is permitted to disaggregate those emissions, including by the seven GHGs or by country, but disaggregation is not required. The ESRS requires additional disclosures, including the percentage of Scope 1 GHG emissions under regulated emissions trading schemes.

The ISSB standards require a reporting entity to disclose aggregate Scope 1 emissions in metric tons of C02e, but a reporting entity wouldn’t be required to report emissions for each of the seven GHGs. The impact of purchased or generated offsets would be excluded from these calculations and separately disclosed. Scope 1 emissions are only required to be disclosed if material. Disclosure of intensity metrics is not required.

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