Answers to all your Scope 2 emissions questions
In our previous article, we reviewed Scope 1 emissions questions. In this article, we take a deep dive into Scope 2.
- What are Scope 2 Emissions?
- How are Scope 2 emissions calculated?
- What are Scope 2 emission factors?
- What are location-based and market-based Scope 2 emissions?
- How do you reduce Scope 2 emissions?
- What are the benefits of reducing Scope 2 emissions?
What are Scope 2 Emissions?
Scope 2 refers to emissions from acquired and consumed electricity, steam, heating, and cooling. These emissions are a consequence of activities of the reporting organization but occur at sources owned or controlled by another organization (for example, they are owned or controlled by an electricity generator or utility).
How are Scope 2 emissions calculated?
To calculate scope 2 emissions, the Corporate Standard recommends multiplying activity data (MWhs of electricity consumption) by source and supplier-specific emission factors to arrive at the total GHG emissions from electricity use.
What are Scope 2 Emission factors?
Scope 2 emission factors are based on the average emissions intensity of the grid or utility providing the purchased electricity or energy.
- Emission Factors for Scope 2 in the US are found at US EPA Emissions and Generation Resource Integrated Database (eGRID). Emission factors can be found at https://www.epa.gov/climateleadership/ghg-emission-factors-hub
- The emission factors file contains “Total Output Emission Factors” and “Non-baseload emission factors”. A total emission output factor represents the average emissions intensity of all electricity generated on a grid over a defined period, weighted by total electricity generation. This factor is appropriate for Scope 2 emission calculations and for Scope 3 Category 3 – T& D loss emissions in accordance with the GHG Protocol. Corporate GHG inventories (Scopes 1–3) are attributional. This emission factor allows attributing the emissions to all grid users.
- A non-baseload emission factor estimates the emissions intensity of electricity that responds to incremental changes in demand—i.e., the generation that ramps up or down when load changes. These are “consequential” emission factors and are used to model electrification impacts, estimate demand response benefits, and perform abatement or avoided emissions analysis. Non-baseload factors are usually higher because marginal generation is dominated by fossil units rather than renewables or nuclear.
- Worldwide Scope 2 emission factors at Institute for Global Environmental Strategies (IGES) List of Grid Emission Factors List of Grid Emission Factors
What are location-based and market-based Scope 2 emissions?
There are two methods for calculating emissions from purchased energy: Location-based and Market-based.
The location-based method calculates Scope 2 emissions based on the average emissions intensity of the electricity grid where a facility is located. It considers the emissions associated with the electricity generation mix of the specific geographic area where the facility operates.
The market-based method calculates Scope 2 emissions based on a company’s purchase of renewable energy or other low-carbon energy attributes (RECs or guarantees of origin). It considers emissions reductions achieved by procuring renewable energy or similar products. The emissions associated with the purchased renewable energy are subtracted from the total emissions. This method incentivizes and rewards companies for investing in renewable energy and actively reducing their carbon footprint through clean energy procurement.
How do you reduce Scope2 emissions?
- Reduce your energy consumption
- Facilities: If you are a tenant, look for Green Leases. If you own the building, implement improved weatherization and insulation in buildings, use LED lighting, and upgrade to ENERGY STAR appliances. Use smart energy grids and meters to track energy consumption in real time and identify inefficiencies.
- Data Centers and IT Hubs: Use energy efficient equipment and optimal temperatures in data centers and virtualize servers where possible.
- Use renewable or clean energy sources for your electricity needs:
- Install on-site renewable energy sources like solar panels or wind turbines.
- Purchase energy with lower emissions intensity using Energy Attribute Certificates, called Guarantees of Origin (GOs) in the EU and Renewal Energy Certificates (RECs) in the US. Purchasing RECs can contribute to reducing carbon emissions by increasing renewable energy on the grid.
- Use Power Purchase Agreements (PPAs), long-term contracts to purchase electricity directly from a renewable energy provider.
What are the benefits of reducing Scope 2 emissions?
- Reducing Scope 2 emissions through energy efficiency improvements directly translates to operational cost savings for the company.
- Installing on-site solar or purchasing clean energy accelerates the decarbonization of grids, an important lever to scale and speed climate action to limit temperature rise to below 1.5C
- Tax incentives, rebates, or government grants might be available for Installing energy-efficient equipment or on-site solar.
- Reducing Scope 1 and 2 Emissions will help achieve goals and targets for science-based initiatives, improve scores and ranking in CDP or EcoVadis assessments, and help you be prepared for any regulations on emissions.
Computing your Scope 1 and Scope 2 emissions, sets you up for reporting your environmental impact to your customers, investors and regulators. Companies that measure and implement reduction targets see brand improvements, gain competitive advantages, and benefit from cost savings and rise in investor confidence.
Calculating your carbon footprint can be a daunting task. If you need help measuring your carbon footprint, Contact Us for a free guide and check out additional Carbon Accounting resources.
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