Scope 2 Emissions

Scope 2 Emissions Defined

Carbon accounting, emissions measurement, net-zero, and Scope emissions: what does it all mean? Separating a business’ carbon emissions into categories, or scopes, helps those businesses be able to mitigate emissions and reduce their carbon footprint. This article will take an in-depth look at Scope 2 emissions and how companies calculate them.

The Greenhouse Gas Protocol defines Scope 2 emissions as "indirect carbon emissions from the generation of electricity, heat, or steam that an organization purchases from a third party."

In other words, these are the emissions from energy production a business consumes but does not directly produce itself; they are indirect emissions.

What Is Considered A Scope 2 Emission?

Scope 2 emissions are those from purchased electricity, heat, or steam consumption.

Using thermal energy, such as natural gas, can also come from company-owned boilers, furnaces, and other combustion facilities. 

Scope 2 emissions come from any company's purchased energy to run its operations.

Scope 2 Categories

There are two main categories of Scope 2 emissions: market-based and location-based.

Location-based Emissions

It is calculated by averaging the emissions for the local grid.

This method is often used for on-site renewable energy projects, such as solar or wind.

Market-based Emissions

Market-based emissions come from an organization’s cumulative purchased electricity. These emissions are a result of the company’s purposeful choice. 

It is a bundled look at a business’ procurement methods, with some methods making more of an impact than others. 

Calculating Scope 2 Emissions

Emissions are computed using location-based and market-based methods by multiplying the bought power by relevant emission factors.

1. Determine the amount of power purchased from the grid or other sources.
2. Determine the emission factors.
   1. Location-Based
      1. Direct line emission factor
      2. Regional emission factor
      3. National emission factor
   2. Market-based
      1. Energy attribute certificates
      2. Contracts
      3. Supplier-specific emission factor
      4. Residual mix factor
      5. Regional emission factor
      6. National emission factor
3. Calculate emissions.
   1. Emissions = Electricity × EF.
      1. Emissions = Mass of carbon dioxide (CO2), methane (CH4), or nitrous oxide (N2O) that is emitted
      2. Electricity = quantity of electricity that is purchased
      3.  EF = CO2, CH4, or N2O emission factor.

Importance of Scope 2 Emissions

The main goal of understanding Scope 2 emissions is to reduce greenhouse gas emissions and help businesses become sustainable.

Businesses need to offset their Scope 2 emissions to reach this goal. They can achieve this by investing in renewable energy projects, exploring renewable energy certificates, and engaging with stakeholders

Reducing Scope 2 emissions is important for two reasons.

First, they often make up a large portion of a company's total carbon footprint. In fact, according to the World Resources Institute, Scope 2 emissions account for about 60 percent of total emissions for the average company.

Second, Scope 2 emissions are generally considered to be more controllable than Scope 1 emissions. Businesses have more control over the type and source of purchased energy over emissions their facilities generate.

Scope 1 and Scope 3 Emissions

Scope 1 emissions occur from sources an organization owns or controls. Buildings, equipment, and vehicles fall under Scope 1.

Scope 3 emissions come from assets a company does not own but still indirectly impacts. They are considered downstream emissions and include waste disposal, business travel, and transportation of goods.

Conclusion

Scope 2 emissions are indirect carbon emissions from generating electricity, heat, or steam that an organization purchases from a third party.

Reducing Scope 2 emissions is important for businesses to offset their carbon footprints.

By understanding what they are and how they are calculated, businesses can make more informed decisions about the energy they purchase and its environmental impact.

FAQs

1. What is a Scope 2 emission?

A Scope 2 emission is an indirect Greenhouse Gas (GHG) released from the energy a company has purchased for their business to operate. 

2. How are Scope 2 emissions calculated?

Scope 2 emissions are calculated by estimating the emissions from electricity generation at the specific location where the business uses it.

3. Why are Scope 2 emissions important?

Scope 2 emissions often comprise a large portion of a company's total carbon footprint, and Scope 2 emissions are generally considered more controllable than Scope 1 emissions.

4. What are the two main categories of Scope 2 emissions?

The two main categories of Scope 2 emissions are market-based and location-based.

5. What is a market-based Scope 2 emission?

A market-based Scope 2 emission occurs when businesses purchase energy from the electricity grid. The carbon dioxide (CO2) emissions associated with this energy are then "bundled" and attributed to the company.

5. What is a location-based Scope 2 emission?

A location-based Scope 2 emission is calculated by estimating the emissions from electricity generation at the specific location where the business uses it.