Carbon Reporting Using Real-Time Data: Submetering The Production Line
GridDuck CEO, Gregor Hoefter, argues for the transition to a low-carbon economy. But while businesses make the right noises about reducing their emissions, most carbon metrics are currently based on assumptions. Our carbon reporting is location-based and tariff-based, giving clients a full picture of their GHG emissions for each product and process step.
One-fifth of the world's carbon emissions come from global production sectors, with manufacturing a large contributor. A first step towards reducing the carbon footprint of manufacturing is accurate carbon reporting.?
GridDuck can measure the energy-related carbon of a production line by calculating the emissions per kWh using real-time location-based and tariff-based data. This innovation will help companies get ahead of regulations to disclose Scope 3 emissions and it will ultimately help with setting and meeting environmental targets.
What Are Scope Emissions?
The Greenhouse Gas Protocol – a global standard for measuring and managing emissions – splits companies’ emissions into three types:?
Currently, reporting on Scope 3 emissions – which can be downstream or upstream –? is
voluntary in the UK, but it’s likely this will change as consumer demand and government pressure combine to drive companies to reduce their carbon emissions as much as possible.?
Your Scope 3 Is My Scope 1
Reporting on Scope 3 emissions is more complicated than either Scope 1 or Scope 2 because it includes your supply chain. Let’s say you own a bakery. To calculate the emissions of producing a loaf of bread, you need to first look at the farm the grain comes from. The farmer’s carbon emissions are easy enough to calculate because they come from two likely sources: the petrol to run the tractor and the fertilizer being used.?
When the farm ships the grain to a flour mill, the mill will use electricity to turn it into flour. When the flour mill reports its Scope 1 emissions, for example, it’s only what comes from the mill. But their Scope 3 emissions will include the farmer’s Scope 1 (what it takes to produce the grain).?
The bakery’s Scope 1 emissions could come from several sources but are likely to include the electricity for the ovens, transportation and to run the shop. Scope 3, meanwhile, would be the emissions from the farm and the flour mill combined, as they are part of the supply chain. The longer the chain, the more complex it becomes. The vital point is that across the entire supply chain, energy plays a significant role.?
Energy makes up only 8% of a food producer’s emissions, while the other 92% is supply chain. However, since energy accounts for 35% of emissions globally, most of your supply chain emissions will be energy-related too.
Are Assumption-based Metrics Still Good Enough??
Relying on suppliers to report their emissions data is a common barrier for Scope 3. To add to the complexity, many emissions from subcontractors are based on assumptions. A car manufacturer, for instance, will have the emissions for producing a tyre but this might have been based on an academic paper and not true for every factory. Is that good enough when it’s now possible to have accurate measurements based on readily available data? Much of carbon reporting is assumptions-driven, yet it demands the same rigor as financial reporting.?
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According to the CDP, a global nonprofit that runs the environmental disclosure system for companies, supply chain emissions are on average 11.4 times higher than operational emissions. This figure is more than double previous estimates because emissions reporting has improved. That alone demonstrates why accurate reporting is essential. Furthermore, figures from 2022 show that 92% of the emissions from European companies are Scope 3 but only 37% of these are being addressed by corporate decarbonisation measures.?
One of the CDP’s recent reports found that over half of reporting companies (estimated at 18,500) leave out Scope 3 emissions. This despite regulatory pressures to disclose them.?
GridDuck’s Carbon Reporting
It’s time to capitalise on the transition to a low-carbon economy by putting data at the heart of your business. Our solution is to measure each production line's energy consumption and to multiply that by the CO2/kWh at the time, available through National Grid data in real time. And this makes a difference because late afternoon electricity, for instance, is more carbon intensive than mid-morning. Even where your factory is based will affect how much carbon you produce; electricity, for example, is cleaner in some parts of the UK than others.?
By using our solution, manufacturers will be able to see what the emissions are for every item made. In other words, we allow you to submeter? the entire production line for transparency and accuracy. This practice will become more common for the reasons we already outlined. In fact, it was a car parts manufacturer that gave us the idea to offer this service to clients.?
Why? Because he said automakers were asking for more granular emissions data – an accurate number for each car part they were making. Both the EU and the UK are getting increasingly strict on this level of carbon reporting.?
In addition to National Grid data, we would use tariff-based data pulled from meters. The better the data the better the measurement and carbon reporting. We can provide the sensors and clamps to accurately measure this in near real time for your production line. We then offer the analysis through GridDuck’s dashboard on a half-hourly basis – giving our clients a full picture of GHG emissions per process step and per end product quantity.?
The Regulatory Landscape on Carbon Reporting
The laws are changing quickly and many companies are likely to be caught out. The European Sustainability Reporting Standards (ESRS) requires large and listed companies to report on the environmental impact of corporate activities using a common standard. The CDP estimates that 50,000 businesses will need to report on their activities in 2024.?
Currently, this doesn’t necessarily include Scope 3 emissions for all but the largest of companies (over 500 employees), but this will change from 2025 as it widens out; listed SMEs will follow suit a year later. The UK is likely to fall into step with the EU and is already consulting on the practicality of Scope 3 emissions reporting.?
Meanwhile, the UK will introduce a carbon border tax in 2027. Goods imported into the UK from countries with a lower carbon price (or none at all) will have to pay a levy by 2027, ensuring products from overseas face a comparable carbon price to those produced in the UK. The levy is being introduced to speed up decarbonisation.?
To sum up, companies that have a full understanding of their carbon emissions, including the indirect emissions, will be better able to measure, manage and reduce them – and will get ahead of regulations to be introduced soon. This has benefits for the environment and society and will avoid the reputational risks associated with doing nothing.?
We are entering a data-driven revolution. With technological advances in gathering and analysing data sources, we are now in a position to accurately report on emissions and transition to a low-carbon economy, which is the only option for the future.
To find out more about how GridDuck can calculate your carbon emissions with granular data, book a call using Calendly. ?