Do you know sector CO2?

Are you looking for ways to be a better and more strategic sustainability advocate? It's essential to focus a company's limited resources - both human and financial capital - on actions that improve the material parts of the business model, not actions that look and feel good but are not material.

When it comes to environmental sustainability, one of the most material actions is CO2 reduction. CO2 reduction requires us to understand the proportion of greenhouse gas emissions generated by a business model.?There are lots of ways to slice and dice CO2 emissions. Let's examine them at a high level, by fuel source and sector. This will help us be more strategic and intentional about where we focus our advocacy.

Step 1: four sectors

The U.S. Energy Information Administration (EIA) provides energy-related CO2 emissions (emissions from conversion of energy sources/fuels to energy) by fuel source and end-use sectors. First let’s look at what is included in each of the four end-use sectors: transportation, industrial, residential, commercial. Which sector is your company in?

Step 2: three fuel sources

Next we will use the EIA spaghetti chart to trace the CO2 emissions from fuel source (petroleum, natural gas, coal) to sector (transportation, industrial, residential, commercial).

Source: Of the 4.9 billion metric tons of CO2 in 2021, the most came from petroleum 46%, then natural gas 34%, and coal 21%. Who is using it?

End use sector:?Looking at the 4.9 billion metric tons by sector, the biggest user was transportation 37%, then industrial 28%, residential 19%, and commercial 16%.

At the bottom is a call-out of the electric power sector which includes electricity-only and combined-heat-and-power (CHP) plants whose primary business is to sell electricity, or electricity and heat, to the public. CO2 emissions from electricity sales to each end-use sector are allocated proportionally to the amount of sales to each end-use sector. End-use sectors on the right bar chart include the CO2 emissions from the electricity sales allocated to each (gray lines).

Example

To walk through how the relationships work, let’s follow the petroleum brown line to transportation…

78% of petroleum’s 2.2BMTs flow to transportation, and that represents 97% of transportation’s CO2 emissions.?Natural gas was 3% of the transportation sector’s CO2 emissions and its associated electric emissions were less than 1%. So for the transportation sector, the material impact comes through reducing petroleum use because that is the vast source of its CO2 emissions.

Find your company’s sector to understand what energy source is driving its sector CO2 emissions.

Bottom line

Know a company's business model and its material source of emissions.?Focus your advocacy in the material areas. You can read much more about the data at the EIA website, link below.

Sources & further learning

Website: Energy and the environment explained by EIA, https://www.eia.gov/energyexplained/energy-and-the-environment/where-greenhouse-gases-come-from.php

Disclaimer: Sustainability Navigator is Elba Pareja-Gallagher's personal ESG newsletter published every Monday. Views expressed are her own. Corrections and respectful feedback are always welcome.