Carbon Accounting & Management Class #4 Study Notes

CLASS ADMINISTRATION

  • Grading Updates: Quizzes are automatically graded in Canvas, but all will be reviewed to adjust scores as necessary.

  • Upcoming Classes:

    • Feb 5: Regular class, focus on wrapping up the GHG model.

    • Guest Lecturer: Sarah Harrison - MENV and GHG Management graduate, Carbon Analyst at Stok.

    • Feb 12: GHG model finalization and guest panel focusing on "GHG Accounting IRL".

    • Panel Facilitator: Jenny Gerson, CU Leeds MBA, Senior Director of Sustainability at DataBank.

    • A distinguished panel comprised of past MENV and GHG Management graduates will participate, encouraging thoughtful questions from attendees.

    • Feb 19: Quiz covering weeks 4-6 and a discussion on targets.

    • Feb 23: GHG Model submission due.

    • March 5: GHG Model Quality Assurance/Quality Control (QA/QC) and targets homework due.

  • Communications:

    • Students should direct questions related to models and assignments to Monroe.

    • Colette is traveling but will check emails periodically. Office hours will recommence on Monday, Feb 16 with a study session for Quiz 2 scheduled from 12:00 - 12:30 pm.

ASSIGNMENT REVIEW

  • Materiality Hypothesis Grading: Grading is complete, and general questions can be discussed with Monroe, while specific grading queries should be directed to Colette upon her return (week of Feb 16).

  • Feedback on Grading:

    • Utilize Scope 3 categories effectively to organize emission inventory and thoughts.

    • Ensure comprehension of what the Scope 3 categories are. Review the GHGP (Greenhouse Gas Protocol) where necessary.

    • Attention to detail is crucial - emissions sources, scopes, and activities should be well aligned.

    • Reflect thoroughly on company operations and allow sufficient time for detailed analysis.

  • Common Issues Noted:

    • For companies manufacturing or involving non-consumable products, the End of Life (EOL) treatment remains significant.

    • Scope 1 and 2 sources may be deemed immaterial for companies lacking significant energy needs in owned or operated facilities.

FUGITIVE EMISSIONS

  • Examples of Scope 3 Categories in Companies:

    • Dairygold:

    • Natural Gas:

      • Heating for offices and processing equipment.

      • Emissions from refrigeration and equipment throughout processing facilities.

    • Under Armour:

    • Scope 1

      • Combusted Natural Gas for office heating (Yes Material).

      • Combusted Vehicle Fuel - fuel for company cars/internal transport (Yes Material).

      • Purchased Electricity for powering company facilities (Yes Material).

    • Scope 2

      • Steam & Cooling for heating/cooling company factories (Maybe Material).

      • Transient categories include Purchased Goods & Services, Capital Goods, Upstream Transportation, Waste Generated in Operations, etc., with their associated emissions assessed as material or otherwise.

AGENDA

  • Quiz and Administrative Items (20 minutes)

  • Model Review Period (30 minutes)

  • Scope 2 Accounting Focus (40 minutes)

  • Scope 3 Travel & Commute Discussion (15 minutes)

SCOPE 2 ACCOUNTING: LOCATION & MARKET-BASED APPROACHES

  • Two Approaches: Defined by the GHGP for electricity accounting:

    • Location-Based Accounting:

    • Does not recognize renewable energy purchases.

    • Uses emissions factors reflecting average emissions intensities of regional grids.

    • In the US, these factors depend on regional electric grids, while they may reflect provincial or national standards elsewhere.

  • Market-Based Accounting:

    • Acknowledges renewable energy purchases through contracts like green utility tariffs.

    • Considers specific emissions factors related to the company’s chosen or unchosen energy options.

    • Ideal factors are utility or tariff-specific; regional average factors can be applied when precise data isn't available.

  • Best Practice: Companies should report emissions utilizing both approaches to otherwise reflect their emissions comprehensively.

SCOPE 2: LOCATION-BASED ACCOUNTING

  • Usage of eGrid Factors:

    • eGrid factors are updated annually in the spring.

    • Factors should correspond to the facility's zip code and its electricity grid region via the EPA Power Profiler Tool.

    • These factors account for the average of green and brown power, and green power may be claimed by others with related Renewable Energy Certificates (RECs).

SCOPE 2: MARKET-BASED ACCOUNTING

  • Market-Based Approach Specificity:

    • Recognizes contractual purchases of renewable energy.

    • Aims to utilize the most accurate emissions factors, ideally, utility provider specifics unless not available.

  • Market-Based Hierarchy: Emissions factors should follow a relevancy hierarchy in developing inventories, ensuring use of the most specific and relevant factors.

    1. Tariff-specific factor

    2. Utility-average factor

    3. Residual mix factors

    4. Regional average factors (state, country)

    5. Grid average (eGrid)

EXAMPLES AND FACTORS

  • Example Calculations for GHGs:

    • Emissions calculated using annual electricity utilized at Salesforce Tower in San Francisco, comparing both location-based and market-based methods, with GHG emissions quantified in metric tons of CO2 equivalent (MTCO2e).

  • Market Examples:

    • Utility factors, e.g., PG&E and Xcel Energy demonstrate the variance in emissions intensity across regions and tariffs.

  • Residual Mix Factors: Reflect emissions intensity of electricity per subregion, modified by claimed REC removals, generally higher than grid averages.

APPLYING RENEWABLES

  • Energy Attribute Certificates (EACs):

    • Represent ownership rights to the environmental benefits of generated renewable energy. They enable the unbundling of these benefits from the underlying power.

    • Just holding EACs does not guarantee operations powered by renewable energy. This applies even to direct renewable sourcing if the related EACs are sold.

  • Regional Variations of EACs: EACs are designated by different names regionally but share similar implications regarding 1 MWh of renewable generation.

  • Impact of Renewable Purchases:

    • The impact of renewable energy varies; some purchases stimulate new energy production, while others draw from existing sources.

  • Best Practice for Applying Renewable Energy: Should be done via RECs for specific consumption and emissions factors applied appropriately.

SCOPE 3: BUSINESS TRAVEL & EMPLOYEE COMMUTE

  • Business Travel Emissions:

    • Encompasses emissions from:

    • Commercial air travel

    • Vehicle travel (rental cars, taxis, rideshare)

    • Rail travel

    • Hotel stays, though not typically included.

    • Air travel alone can constitute over 80% of travel-related emissions in GHG inventories, guiding data collection efforts toward this area.

  • Employee Commute Emissions: Post-COVID, entails:

    • Office commute emissions

    • Incremental WFH emissions (guidance expected in future GHGP updates).

    • Office commutes tend to produce significantly higher emissions compared to WFH incremental energy use.

DATA SOURCE CONSIDERATIONS

  • Common Data Sources Include:

    • Exported travel vendor data (e.g., Concur)

    • Expense reports

    • Rental car fuel mileage receipts

  • Dealing with Sensitive Information:

    • Best practices include requesting anonymized information, using secure platforms for sharing data, and ensuring personally identifiable information is redacted from models to protect privacy.

ASSIGNMENTS BEFORE NEXT CLASS

  • Complete readings and revisit Scope 3 in GHGP.

  • Finalize calculations and documentation related to the GHG model including:

    • Market-Based Electricity

    • RECs involvement

    • Business travel

    • Employee commute

  • Optional readings on refrigerants and purchased goods & services to prepare for upcoming classes.