GHG for beginners

A good chance you’ve come across it lately: the GHG protocol

What exactly is the GHG protocol, and why should your organization care? Is it important to understand how it works, and if so, how does it work? In this blog, I’ll break down the basics of the GHG protocol with clear examples. Got questions afterward? Feel free to reach out!

First things first: what and why?

Let’s start with what the GHG protocol is and what you need to know about it as an organization. GHG is short for GreenHouse Gases. The GHG protocol is a globally used standard for measuring the emissions of an organization, both direct and indirect emissions. To be able to properly compare those emissions, every form of emissions is calculated as the so-called CO₂ equivalent.

For SMEs it is increasingly more important to track these emissions as stakeholders more frequently started asking about them, such as customers, investors and shareholders. However, it’s not necessary to fully understand the GHG protocol. To be honest, it’s quite a complex monster, but luckily there are solutions available to make it more accessible. Such as the Green Otter.

Using our tool you can easily comply with the GHG protocol without knowing it. Perfect!

How is the protocol structured?

Want to know more about the GHG Protocol? Hold on tight, here we go.

The goal is to calculate a figure that represents the company’s emissions. We break this down into three categories (called ‘scopes’), but more on that shortly. For each ‘scope’, we want to calculate a number. There are, of course, many different greenhouse gases, such as methane (CH₄), carbon dioxide (the well-known CO₂), and ozone (O₃). Each gas has a different impact on global warming, so everything is converted into what is known as a CO₂ equivalent (CO₂eq for short). For example, methane has 28 times the impact, so 1 kilogram of methane equals 28 kilograms of CO₂ equivalent.

To arrive at this number, we need to perform some calculations. Let me explain with an example: suppose we burn 50 liters of gasoline with a company car. How much CO₂eq emissions does that produce? The fuel was once crude oil, which was extracted, transported, refined into gasoline, transported again, filled into the car, and then burned. To convert this to CO₂eq, we use emission factors: a multiplier to calculate CO₂eq. For gasoline, the factor is 3.073 kg CO₂eq per liter. So, in this example: 50 liters of gasoline is 50 * 3.073 = 153.650 kg CO₂eq.

Now that this is clear, let’s look at the previously mentioned ‘scopes’. The protocol requires you to divide your emissions into three categories: scope 1, 2, and 3. Let’s examine these categories one by one.

Scope 1 - Direct emissions

This category covers all direct emissions from the organization. By direct, we mean emissions from sources that you own or control and that produce greenhouse gases. Some examples include:

1. Burning natural gas in the central heating boiler
2. Using gasoline or diesel in company vehicles
3. Operating a diesel-powered emergency generator
4. CO₂ emissions from cement production

It’s quite simple: if you directly emit gases, it falls under scope 1.

Scope 2 - Indirect emissions from energy

Now it gets a bit more complex. Scope 2 and 3 both deal with indirect emissions, meaning emissions produced by other organizations on your behalf. But what’s the difference? Scope 2 concerns emissions from other organizations that are directly related to your energy consumption. In other words: if you didn’t purchase that energy, they wouldn’t have produced those emissions. Here are some examples to clarify:

1. Electricity consumption at the office
2. District heating for company buildings
3. Purchased steam for a production process
4. Charging electric company vehicles

Hopefully, this is clearer now: if you purchase energy (electricity, heating, cooling, or steam) from another organization (such as an energy supplier, municipality, or charging station), it falls under scope 2.

Scope 3 - Other indirect emissions

Once you understand scopes 1 and 2, this one is easy: everything else. Scope 3 covers all other emissions that you are indirectly responsible for. For most organizations, this is the largest share of emissions! It varies by sector and organization, but don’t be surprised if 90% of your emissions fall under scope 3. Here are some examples of scope 3 emissions:

1. Business travel by plane or train (unless the train or plane is owned by the organization!)
2. Employee commuting
3. Production of purchased goods (e.g., laptops, paper, food, etc.)
4. Transport by third parties (such as delivering those laptops or shipping products to customers)
5. Waste processing of products (e.g., methane emissions from landfills)

Of course, the list is much longer, but these common examples should give you a better idea. Since scope 3 covers so many different activities, it is divided into 15 categories:

1. Purchased goods and services
2. Capital goods
3. Fuel- and energy-related activities (not included in scope 1 or 2)
4. Upstream transportation and distribution
5. Waste generated in operations
6. Business travel
7. Employee commuting
8. Leased assets (upstream)
9. Downstream transportation and distribution
10. Processing of sold products
11. Use of sold products
12. End-of-life treatment of sold products
13. Leased assets (downstream)
14. Franchises
15. Investments

Conclusion

Want to get started mapping your greenhouse gas emissions? Hopefully, you now feel a bit more prepared. The GHG Protocol is the most widely used standard for this purpose. If you’re looking for an easy way to measure your emissions, Groene Otter is the place to be. Besides helping you apply the GHG Protocol, we also help you gather other sustainability data and generate automated reports. Curious? We’d be happy to show you a demo of our software!