The reliability and timeliness of emission factors have a surprisingly significant impact on the results of emission calculations. The best – and often also the lowest – emission calculation results are achieved by using the supplier’s own emission factors and factors based on physical quantities, such as kilograms.
During the autumn, the demand for emission calculation services has increased, and the pace seems to be accelerating. Large listed companies, which will be required to report on the sustainability of their operations under the CSRD from the beginning of 2025, are already getting busy. Climate change and the closely related calculation of greenhouse gas emissions is one of many important sustainability issues for companies. The limited time and resources must still be allocated to other topics related to the environment, social responsibility and good governance (ESG) as well. Amid the rush, companies may find themselves in a situation where the emission calculations just need to be completed somehow. Preferably with as little extra work as possible. However, attention should be paid to the quality of the emission factors used.
Emission factor data is often outdated and poor
An old saying is that you can’t manage what you don’t measure. Less attention is paid to the quality of the measurements. According to our experience, even today, most Finnish companies – and consultants – are doing emission calculations in Excel. Admittedly, Excel is a very good tool, as long as you can be sure that all the formulas work correctly. You also have to make sure that the emission factor data on hand is reliable and up-to-date.
While verifying companies’ emission calculations, we have found errors multiplied by a 1,000 in the input data. Most of the errors have been found in the calculation of transportation emissions. Almost without exception, the errors have led to overestimated emissions. In addition to actual errors, we have also noticed that the emission factors used can be more than ten years old. Often the Excel user has no idea what the factors are based on or what they include. Quite often, even new emission factors and product carbon footprints are based on old sources and global averages.
What is high-quality emission factor data?
The best emission factor data is the most up-to-date data possible. It is also obtained directly from the supplier of the product or service. In a previous blog post, we have outlined the criteria for high-quality emission factor data in more detail. The data should be geographically and technologically representative and verified by a third party. For example, if Finnish steel is used in a product’s manufacturing process, it is not advisable to use just any emission factor found by googling. It matters whether the steel is produced by blast furnace process or melted down from recycled steel using electricity. When selecting an emission factor, it is also important to consider whether the factor accounts for the entire lifecycle of the product or only a part of it.
The timeliness of emission factors is important. In particular, if a product is energy-intensive to manufacture, increasing access to renewable energy will reduce the emission factor of the product over time. Therefore, using up-to-date emission factors usually leads to lower emissions.
Procurement emission calculations should be based on physical quantities
Generally, the most labour-intensive task is calculating category 1 emissions (purchased goods and services) of scope 3 emissions. In particular, it would be desirable to automate this emission calculation so that it could be based on euro-based emission factors. The input data should also come directly from the company’s purchasing data without a detailed consideration of the quality of the purchases. Depending on the company’s accounting, there can be various actors under the same consulting title, whose emissions can vary significantly. For example there is a notable difference in whether an external consultant is doing design work in the office or repair work at the company’s facilities.
According to the guidelines of emission calculation standards, spend-based calculations, which are based on currency-based emission factors, are the least accurate option and should only be used when no other information is available. We have tested the differences between physical and spend-based calculations. We have then found that spend-based calculations can lead to emissions that double those of physical quantity-based calculations.
If a company’s greenhouse gas emissions have been overestimated, it can also lead to incorrect results in the planning of emission reduction measures and profitability calculations. If the emissions from purchased goods and services do not clarify where the emissions are actually coming from, it is difficult to consider how emissions can be reduced. If a company can, for example, switch its raw materials to recycled materials, emissions can decrease significantly. Though this is only possible if the raw materials are calculated based on physical quantities. Recycled raw materials can be more expensive than virgin materials, and price-based emission calculations can only account for the increased costs and, consequently, the increased emissions, not the actual emission reductions.
Where can reliable emission factors be found?
OpenCO2net has been compiling one of the most comprehensive emission factor databases in Europe for seven years. The database is updated twice a month, and the best emission factors are selected from the latest statistics, scientific articles, and other open databases. The OpenCO2net database also utilizes the Ecoinvent database, which is the world’s most comprehensive database of life cycle data.
The background of each emission factor added to the OpenCO2net database is carefully examined. In addition to the sources and publication dates, the emission factors are also investigated for the greenhouse gases included and the life cycle stages. Investigating the backgrounds can be challenging if emission factors have to be collected manually from various sources. Using pre-collected and verified emission factors can save a significant amount of time during the calculation project.
The OpenCO2.api has now also been released, through which the emission factors from the database can be integrated into companies’ own enterprise resource planning systems or calculation tools.
If you would like to hear more about the OpenCO2.api, please contact us.
The OpenCO2net emissions database is compiled by emission calculation experts, featuring around 8,000 up-to-date emission factors. With the OpenCO2.api, emission factors can be integrated into companies’ own systems. Additionally, the OpenCO2net platform offers standard-based carbon footprint calculators for both organizations and products.
