Part 2: What are Scope 2 Emissions and How to Monitor Them in Your Organisation.
In the last newsletter, we talked about Scope 1 emissions, which is one of the three scopes to monitor and report Greenhouse Gas (GHG) emissions. Scope 2 emissions are specified under the NGER legislation and must be reported as well for certain identified businesses. For everyone else it is currently voluntary.
What are Scope 2 Emissions?
Similar to Scope 1 emissions, they make up about 10% of GHG emissions.?
Scope 2 emissions are the greenhouse gases released into the atmosphere from the consumption of purchased electricity, steam, heat and cooling by a company such as the electricity used to power a factory, office or electric vehicles owned by the company.??
What are the differences between Scope 1 and 2 Emissions?
?When compared to Scope 1 that monitors what your organisation produces, Scope 2 emissions are called indirect emissions because the physical CO2 emissions resulting from an organisation’s activities occur at sources it doesn’t own or control.?
For example, a power station burns coal to create electricity, the electricity is transmitted to a factory or office and used there to power its computers, machines and lighting. Scope 1 emissions from one business form part of Scope 2 emissions for another business. In order to understand this, we need to first understand the different forms of energy tracked with Scope 2 emissions.?
Four Forms of Energy Tracked With Scope 2 Emission
1. Electricity
Electricity is generated from power plants burning fossil fuels. For most organisations, electricity is purchased from third party providers and delivered from the grid and is consumed. Hence, electricity can be the most significant contributor to Scope 2 emissions.?
However, an important factor to consider is that electricity can be accounted for in Scope 3 emissions when used and lost by the power generator during manufacturing, transmission and distribution (T&D losses).?
On-site electricity generation is growing quickly. Let’s look at solar panel installations, for example. The type of electricity generation and solar power will determine how the greenhouse gas emissions are reported.
In addition, the carbon accounting for electric vehicles (EVs) usage in organisations is managed under Scope 2.
2. Purchased Steam
A useful form of energy for large industrial processes, heating, and cleaning. Steam can also be produced by using energy in combustion assets such as boilers or thermal power plants.?
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3. Heating
There are many forms of heat sources. Often, heat will be utilised from hot water. Typically, organisations will purchase from other companies. Thus, this makes heating sources a Scope 2 emission.?
4. Cooling
Cooling agents (e.g. chilled water) provide third party resources for organisations. Similar to heating, cooling can be purchased from other companies and is considered a Scope 2 emission.?
Scope 2 Emissions are either location-based or market-based?
Location based refers to the average emission factors for the local grid— Whereas market-based uses the contractual instruments in competitive energy markets and calculations consider factors such as green tariffs, Renewable Energy Certificates, and Off-Site Power Purchase Agreements (PPA).?
Where should your organisation start with monitoring Scope 2 emissions?
In most cases, Scope 2 emissions can be calculated based on the consumptions outlined in energy bills ( especially with electricity). For steam, heat, and cooling, contacting your provider will help you understand how each is produced.?
However, there are times when monitoring Scope 2 emissions can be difficult to understand.?
Allow Carbon Offset Advisory to simplify your scope emission monitoring process?
Scope 2 emissions can be challenging to monitor for the first time. Let Carbon Offset Advisory help with monitoring not only your Scope 2 emissions but Scope 1 and 3 as well.?
We help businesses in a wide variety of niches including:?
Regardless of niche and company size, we can provide a tailored approach to help you measure your organisation’s scope emissions. In addition, we? help you zoom out and provide a long term plan to help your business become net-zero.?
Message me today to discuss where to begin.
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