Choosing the right emission factor is one of the most challenging tasks in emission calculation. Often, you have to search for up-to-date emission factors with great effort. Google provides some newer and older emission factors, but how do I choose the right one?
Emission calculation standards provide clear guidelines on the emission factors to be used in calculations. Primarily, so-called primary emission factors should be utilized. This means that emission factors should be obtained from organizations within one’s own supply chain. Unfortunately, currently, only a few organizations have calculated the carbon footprint of their own products and services.
If primary data is not yet available, the so-called secondary data is used. The best secondary emission factors are local and regional averages. In Finland, this includes, for example, emission factors for district heat production in different regions. The calculation can also be based on average emission factors for Finland or, where appropriate, for Europe. Sometimes, global averages are used when better data is not available.
Emission factors based on physical quantities or economic value
Primarily, emission factors based on physical quantities should be used, i.e. factors based on, for example, mass, volume or energy content. Sometimes, or quite often in fact, a company does not have access to sufficiently detailed information on, for example, the weights of the products it purchases. In such cases, the calculation of emissions is based on currency-based factors. This is called spend-based calculation.
Emissions from purchased services always have to be calculated using currency-based factors.
In several of our emission calculation projects, we have made comparisons between emission factors based on physical quantities and those based on economic value. Often, the so-called spend-based calculation results in 1.5 to 2 times higher emissions than a calculation based on physical quantities. These differences are accentuated in countries such as Finland and Sweden, where most of the energy is produced from renewable and emission-free sources.
Problems of Euro-based emission factors
If no other emission factor is available, currency-based factors can be used. However, there are many problems with this approach, and often calculations using currency-based factors result in significantly higher emissions than calculations using factors based on physical quantities. Generating emission factors based on economic value is time-consuming and always relies on historical data.
Take, for example, a t-shirt made of cotton. According to various life cycle studies, the carbon footprint of such t-shirt can vary between 5 and 10 kg CO2e. This depends, for example, on the amount of cotton used to make the t-shirt. Product life cycle studies are based on physical quantities and detailed information about the product’s life cycle stages.
The euro based emission factors for textiles and clothing manufacturing range from 0.6 to 0.7 kg CO2e/euro. If a t-shirt was cheaply produced and cost 5 euros in a shop, the emissions of a t-shirt would be 3-3.5 kg CO2e, calculated using a euro-based factor. On the other hand, if a higher quality t-shirt costs 50 euros in another shop, the T-shirt would then emit 30-35 kg CO2e using a euro-based multiplier. Essentially with the price increasing the emissions would then also be ten times higher.
Of course, the emissions from a cheap t-shirt cannot be lower and those from an expensive one higher than when calculated using physical quantities. Often it is quite the opposite. When a cheap product comes from far away, sustainability tends to be forgotten. In comparison many textile companies operating in Finland base their operations precisely on sustainability and aim to reduce their products’ carbon footprint.
The latest currency-based multipliers are calculated using 2020 data. In 2023, inflation was high, and the purchasing power of money fell significantly. Prices of many goods and services rose by up to ten percent. In our example, if the price of a t-shirt had risen to 60 euros over the course of one year, the calculated emissions would have risen to 36-42 kg CO2e. And if the t-shirt had been sold at half price during the sales, the calculated emissions would have fallen to 18-21 kg CO2e. The materials, energy consumption during production, and transport routes of this t-shirt did not change with the price. Therefore the carbon footprint of the product did not actually change at all – the price-based calculation is just confusing.
In addition, exchange rates fluctuate daily, and if currency conversions are made to the currency-based multipliers, they must be done using the exchange rates for the period for which the multipliers are determined. This involves the possibility of error.
Our example is a good illustration of the uncertainties involved in calculating with euro-based coefficients.
Spend-based calculation is convenient and would allow for automation and integration with companies’ own procurement and other systems. However it is advisable to calculate emissions using coefficients based on physical quantities wherever possible. In addition, if a company procures its raw materials and energy from companies with low emissions, it is worth using primary factors from these companies – at least if the aim is to reduce the company’s own emissions.
The OpenCO2net emissions database already contains around 8,000 emission factors, which are updated regularly. Our emissions database contains both regional and country-specific averages, as well as primary factors obtained directly from companies. All emission factors added to the database have been carefully validated by our experts.
