Net Zero, how to calculate emissions, Scope 1, 2, 3, and the UN SDGs

I started Decarb Diary as a place to publicly capture and share what I learn as I enter into a rapid immersion in climate, energy, decarbonisation, etc, over a 3-6 month period to find the most painful problems that I have the skills to help solve. Ultimately I hope this will lead to starting a globally scalable business that will have real impact in the world. Learn more here.

Key Insights and Takeaways

• “Net zero” is when there is a balance between greenhouse gases (GHG) emitted and removed
• There are seven energy and land-use systems - power, industry, mobility, buildings, agriculture, forestry and waste, each with their own challenges
• “Carbon neutral” differs from net zero in that it’s only about offsetting emissions, without having to do anything about those emissions
• Limiting global warming to 1.5°C will help us avoid putting millions more people at risk of life-threatening consequences - this is the ultimate objective
• The Greenhouse Gas (GHG) Protocol is a set of global standardised frameworks to measure and manage greenhouse gas emissions, which is used by Governments and companies across the world.
• The basic formula for calculating emissions is Emissions = Activity Data x Emission Factor (volume of an activity x standard factor for emissions per unit)
• There are seven main gases that contribute to global warming, but CO2 is used as a benchmark for stating the global warming potential (GWP) of all gases, where GWP is expressed in terms of carbon dioxide equivalent, or CO2e.
• Emissions are broken into Scope 1 (the direct emissions your company causes), Scope 2 ( the emissions from the energy you buy), and Scope 3 (all the other indirect emissions tied to your business activities, from the supply chain to the disposal of your products).
• The UN Sustainable Development Goals are a set of 17 goals across areas of health, education, inequality, climate change and more. Organisations can engage by aligning their strategies, operations and initiatives to those that are most relevant to them.

New findings this week (aka Contents)

• What does Net Zero actually mean?
• Categorising emissions by the seven energy and land-use systems
• What’s the difference between ‘net zero’, ‘carbon neutral’ and ‘100% renewable’?
• Why is 1.5°C the climate target?
• The GHG Protocol provides the guidelines on how to measure emissions
• The formula to actually calculate emissions
• The seven gases that contribute to global warming and why we use a carbon dioxide equivalent metric (C02e)
• What are Scope 1, 2, 3 emissions and how they help categorise all the different potential emissions sources.
• What are the UN Sustainable Development Goals and how do organisations use them.

New content sources:

• Solar Insiders podcast, a weekly podcast about the solar industry

What is Net Zero?

Net zero is an ideal state where the amount of greenhouse gases released into the Earth’s atmosphere is equal to the amount removed.

There are seven energy and land-use systems (power, industry, mobility, buildings, agriculture, forestry, and waste) that are heavy GHG emitters and each will need to be transformed to achieve net zero by 2050. Here’s an overview of the requirements for each:

• Power. Addressing physical challenges to emission abatement in power is fundamental to the entire energy transition. That’s because abating emissions in the sectors that consume the most energy—mobility, industry, and buildings—will require a sweeping shift toward electrification. Managing the growth of wind and solar power will be crucial here.
• Mobility. The energy transition requires the decarbonization of transportation, including cars, trucks, aviation, and shipping. There remain fundamental performance gaps between electric vehicles and internal combustion engines in longer-range mobility, including trucking, aviation, and shipping.
• Industry. Fossil fuels are critical to the four material pillars of modern civilization: steel, cement, plastic, and ammonia. Decarbonization of these four industries will be a major challenge. Other industries will be marginally less challenging but will still require extensive retrofitting of existing industrial sites.
• Buildings. Heating accounts for the largest share of emissions from buildings. Heat pumps are a solution here: according to the McKinsey 2023 Achieved Commitments scenario, they could provide most of the heat required by buildings by 2050. The challenges here include ensuring that heat pumps perform well enough in the coldest geographies and managing the impact of peak demand on heat pump performance.
• Raw materials. Lithium, cobalt, and select rare earth minerals are critical in scaling the low-emission technologies that are needed to decarbonize multiple sectors. The challenge here is ensuring that these minerals can be unearthed quickly enough to meet demand.
• Hydrogen and other energy carriers. Hydrogen and biofuels will be needed to decarbonize many domains. Scaling to the necessary extent will require significant land use (for biofuels) and new infrastructure (in the case of hydrogen).
• Carbon and energy reduction. Replacing high-emission technologies with low-emission technologies is important. But reducing overall energy consumption—along with capturing the reduced amount of CO2 that’s still emitted—will also be vital to a successful transition. CCUS will require further technological advancements and the scaling up of technologies that may not even exist today.

Source

Net Zero vs. Carbon Neutral vs. 100% renewable

Net zero - reduce emissions as much as possible, then balance the remaining hard to abate emissions with carbon offsets. These offsets must be removal-based carbon offsets that actively remove GHG from the atmosphere.

Carbon neutral - typically applies to balancing emissions with offsets over a defined period, often without the need to reduce emissions.

100% renewable - the focus here is on getting your entire energy demand/ consumption to be renewables, either by supplying your own with solar, for instance, or balancing your energy consumption by buying it.

Why is 1.5°C the target?

The Paris Agreement (2015) is where it was agreed we need to limit the rise in temperature to well below 2°C, ideally 1.5°C, above pre-industrial levels. Australia initially pledged to reduce emissions by 26-28% below 2005 levels by 2030, a target it has maintained. It was accepted by 195 states.

The world needs to halve emissions by 2030, and halve again and again by 2040 and 2050 to reduce the risk of dangerous climate change. This trajectory is called the Carbon Law.

The Exponential Roadmap Initiative is a collaborative climate initiative uniting companies that are innovators, disruptors and transformers to drive exponential action to halve emissions by 2030.

They help companies take radical climate action across four pillars, as laid out in their 1.5°C Business Playbook: 1) reducing own emissions; 2) reducing value chain emissions; 3) providing and scaling climate solutions; and 4) accelerating action in society.

The lntergovernmental Panel on Climate Change (IPCC), the world’s most authoritative scientific body on climate change, said that urgent and substantial reductions in GHG emissions are necessary to limit warming to 1.5°C, the threshold to avoid putting millions more people at risk of life-threatening consequences, and that it was economically and technically feasible. Some of the key actions include:?

• Peak GHG emissions immediately and before 2025
• Halve Carbon Dioxide (CO2) emissions in the 2030s, relative to 2019
• Reach net zero CO2 emissions in the 2050s and net zero GHG emissions around the 2070.
• Read here for more about climate basics.

How do we know how to measure emissions?

The Greenhouse Gas (GHG) Protocol is a set of global standardised frameworks to measure and manage greenhouse gas emissions, which is used by Governments and companies across the world.

The standards include:

• The Corporate Accounting and Reporting Standard provides requirements and guidance for companies and other organisations preparing a GHG emissions inventory.
• The Corporate Value Chain (Scope 3) Standard allows companies to assess their entire value chain emissions impact and identify where to focus reduction activities.
• The Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC) provides a robust framework for accounting and reporting city-wide greenhouse gas emissions.
• The GHG Protocol Mitigation Goal Standard provides guidance for designing national and subnational mitigation goals and a standardised approach for assessing and reporting progress toward goal achievement.
• The GHG Protocol Policy and Action Standard provides a standardised approach for estimating the greenhouse gas effect of Govt policies and actions.
• The Product Standard can be used to understand the full life cycle emissions of a product and focus efforts on the greatest GHG reduction opportunities.
• The GHG Protocol for Project Accounting is the most comprehensive, policy-neutral accounting tool for quantifying the greenhouse gas benefits of climate change mitigation projects.
• See full documents for all seven standards HERE

How are emissions measured?

At its most basic level, the formula is:

Emissions = Activity Data x Emission Factor

Activity data is the size of a specific activity, process, or product (eg kilometers, kWh of energy, volume, dollars).

Emission factors are standard numbers that tell you how much GHG is emitted for each unit of activity. There is an emissions factor for every type of activity, process or product you can think of.

Some emission factor examples:

• Driving 1 kilometer in petrol car emits 0.192 kg of CO?.
• Using 1 kWh of electricity emits 0.7 kg of CO?, depending on how the electricity is generated (e.g., coal, natural gas, or renewables).
• Burning 1 litre of diesel emits 2.68 kg of CO?.

So if you drove 100 kms in a petrol car, emissions would be 100 x 0.192 = 19.2 kg of CO?.?

There are a number of databases - like the ones on the GHG Protocol website - that provide all of these emissions factors.

Carbon Dioxide Equivalent (CO2e)

It’s worth noting that there are actually seven main gases that contribute to global warming, but because CO2 is so abundant, it’s used as the benchmark for stating the global warming potential (GWP) of all gases. GWP is expressed in terms of carbon dioxide equivalent, or CO2e.?

Because a tonne of carbon dioxide is obviously equivalent to a tonne of CO2e, we can state that the GWP of CO2 is 1. This means that it has the lowest global warming potential of all GHGs – but because we generate it in such great quantities, it is still by far the biggest contributor to human-caused global warming.

There are seven main gases are:

• Carbon Dioxide (CO2) - makes up about 80% of emissions and is the one most people know about. GWP = 1
• Methane (CH4) - a component of natural gas, with the majority of the rest coming from agriculture. GWP = 25, which means that a tonne of methane creates the same warming as 25 tonnes of carbon dioxide.
• Nitrous Oxide (N2O) - naturally produced by bacteria and fungi in the soil and oceans, but for about 250 years has been used as a propellant, eg in aerosols. GWP = 273. It has been estimated that two cans of whipped cream have a carbon footprint of 8.7kg CO2e, which is higher than the average UK household’s daily heating emissions of 7.52kg CO2e.
• Hydroflurocarbons (HFCs) - human-made compounds with a wide range of applications, including refrigeration, air-conditioning, fire extinguishing systems and some asthma inhalers. GWP = up to 12,500.
• Perflurocarbons (PFCs) - a class of chemical compounds used in refrigerants and solvents. The aluminium production industry is one of the biggest generators of this GHG. GWP = 7,390 - 17,340.
• Sulfur hexafluoride (SF6) - mainly used to insulate equipment such as circuit breakers and switches. GWP = 22,800.
• Nitrogen trifluoride (NF3) - main use is in the manufacture of electronic goods such as display screens, solar panels, semiconductors and LEDs. GWP = 17,200.

Source

What are Scope 1, 2, 3 emissions:?

Emissions are broken into three parts: the direct emissions your company causes (Scope 1), the emissions from the energy you buy (Scope 2), and all the other indirect emissions tied to your business activities, from the supply chain to the disposal of your products (Scope 3).

These are important to 1) help chunk down what appears to be a massively complex challenge, and 2) so that we don’t double count.

At a high level:

• Scope 1: Direct GHG emissions occur from sources owned or controlled by the company, such as company-owned vehicles and facilities.
• Scope 2: emissions from energy generation purchased or otherwise brought into the company
• Scope 3: all indirect emissions (not included in Scope 2) that occur in the reporting company's value chain, including both upstream and downstream emissions.

Scope 1 and 2 are relatively straightforward because these are generally in the company’s control.

Scope 3 is harder because these are indirect emissions that occur throughout a company's value chain but are not directly controlled by the company.? However, scope 3 generally makes up 70%+ of a company’s total emissions.

In more detail:

• Scope 1 includes stationary combustion sources (like generators, boilers, furnaces, etc), mobile combustion sources (generally vehicles), refrigeration and air conditioning, and fire suppression equipment.
• Scope 2 tracks at least four types of energy brought ito the company - electricity, steam, and the energy to power heat and cooling (as opposed to the emissions aircons generate in Scope 1).
• Scope 3 (upstream) - all the activities that happen before the company’s operations (like emissions from the products bought by the company, waste generated in operations, business travel, and employee commuting)
• Scope 3 (downstream) - all the activities that happen after the company’s operations (like transportation and distribution by third parties, emissions generated from the product when it’s used by the end user, and end-of-life treatments.

I found this article from Arbor to be a really great overview of the three scopes.

I found this to be another good visual that explains the scopes. From this article.

UN Sustainable Development Goals (SDGs)

The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future.

At its heart are 17 SDGs, which are an urgent call for action by all countries - developed and developing - in a global partnership. They recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.

Within each of the 17 goals there are more specific targets, with 169 targets all up.

Companies and organisations can engage with the UN SDGs by aligning their strategies, operations, and initiatives with the goals that are most relevant and important to their core business activities, products, or services. There is no legal mandate or repercussions, but these can help set the directions and provide guidance and a community of other organisations all working towards the same goals.

Glossary

• GHG = greenhouse gas
• UN SDGs = United Nations Sustainable Development Goals
• IPCC = lntergovernmental Panel on Climate Change
• CO2e = Carbon dioxide equivalent
• GWP = global warming potential

I encourage you to reach out if:

• I've said something wrong or partially wrong,
• there's an additional thing I should know about,
• you think it would be valuable to talk to you, or
• you know someone I should talk to!

Note though, if you don't believe in climate change, please don't spread your misinformation here. My newsletters are not a debate about whether climate change is real - that was settled long ago by actual science, with plenty of overwhelming evidence (and a good dose of common sense).

Cheers,

Dan