How to Calculate Scope 2 Emissions: A Guide for Businesses

How to Calculate Scope 2 Emissions

Scope 2 emissions are indirect greenhouse gas emissions that occur as a result of an organization’s activities, but not directly from its own operations. These emissions can come from the generation of purchased electricity, heat, or steam; the use of purchased fuels; and the transportation of goods and services.

Calculating scope 2 emissions is an important part of an organization’s overall greenhouse gas emissions inventory. This information can be used to identify opportunities to reduce emissions, and to comply with climate change regulations.

In this article, we will discuss the different types of scope 2 emissions, how to calculate them, and the challenges associated with this process. We will also provide some tips for organizations that are looking to reduce their scope 2 emissions.

What are Scope 2 Emissions?

Scope 2 emissions are indirect greenhouse gas emissions that occur as a result of an organization’s activities, but not directly from its own operations. These emissions can come from the generation of purchased electricity, heat, or steam; the use of purchased fuels; and the transportation of goods and services.

For example, a company that operates a factory that uses electricity to power its machinery would have scope 2 emissions from the generation of that electricity. Similarly, a company that ships its products to customers would have scope 2 emissions from the transportation of those products.

Scope 2 emissions are often much larger than scope 1 emissions, which are direct emissions from an organization’s own operations. For example, a study by the World Resources Institute found that the average company’s scope 2 emissions are more than twice as large as its scope 1 emissions.

How to Calculate Scope 2 Emissions

There are a number of different methods for calculating scope 2 emissions. The most common method is to use the following formula:

“`
Scope 2 emissions = (Purchased electricity CO2 emission factor) + (Purchased fuels CO2 emission factor) + (Transportation CO2 emission factor)
“`

where:

• Purchased electricity is the amount of electricity that the organization purchases from a utility company.
• CO2 emission factor is the amount of CO2 emitted per kilowatt-hour of electricity generated.
• Purchased fuels is the amount of fuel that the organization purchases, such as natural gas, diesel, or gasoline.
• CO2 emission factor is the amount of CO2 emitted per unit of fuel burned.
• Transportation is the amount of goods and services that the organization transports.
• CO2 emission factor is the amount of CO2 emitted per ton-mile of transportation.

This formula can be used to calculate scope 2 emissions for any organization, regardless of its size or industry. However, it is important to note that this is just a general formula, and specific organizations may need to adjust it to account for their unique circumstances.

Challenges in Calculating Scope 2 Emissions

There are a number of challenges associated with calculating scope 2 emissions. These challenges include:

• Lack of data: In many cases, organizations do not have access to the data they need to calculate their scope 2 emissions. This is especially true for organizations that purchase electricity from multiple sources or that use a variety of fuels.
• Complexity: The calculation of scope 2 emissions can be complex, especially for organizations with a global footprint. This is because organizations need to consider the emissions from all of their activities, including those that occur in different countries and regions.
• Uncertainty: There is a degree of uncertainty associated with any estimate of greenhouse gas emissions. This is because the emission factors used in the calculation are based on estimates and assumptions.

Despite these challenges, it is important for organizations to calculate their scope 2 emissions. This information can be used to identify opportunities to reduce emissions, and to comply with climate change regulations.

Step	Description	Example
1. Identify all direct and indirect emissions from your organization.	This includes emissions from your own operations, as well as emissions from your suppliers and customers.	For example, a company that manufactures cars would need to include emissions from its factories, as well as emissions from its suppliers of raw materials and components, and from its customers driving the cars.
2. Calculate the emissions from each source.	This can be done using a variety of methods, such as the following: Carbon dioxide equivalent (CO2e) emission factors Life cycle assessment (LCA) Environmental product declarations (EPDs)	For example, a company that manufactures cars could use CO2e emission factors to calculate the emissions from its factories, based on the amount of energy used and the type of fuel burned.
3. Add up all of the emissions to get your total Scope 2 emissions.	This will give you a comprehensive picture of your organization’s greenhouse gas emissions.	For example, the company that manufactures cars would add up the emissions from its factories, its suppliers, and its customers to get its total Scope 2 emissions.

Scope 2 Emissions: What are they?

Scope 2 emissions are indirect greenhouse gas emissions that occur as a result of an organization’s activities but are not directly from its own operations. They include emissions from the generation of purchased electricity, heat, or steam; the use of purchased fuels; and the transport of purchased goods.

Scope 2 emissions are an important part of an organization’s overall carbon footprint, and they can be significant in size. For example, a study by the Carbon Disclosure Project found that the average Scope 2 emissions of the S&P 500 companies were 42% of their total emissions.

There are a number of ways to calculate Scope 2 emissions. One common method is to use the following formula:

“`
Scope 2 emissions = (electricity consumption * carbon intensity of electricity) + (heat consumption * carbon intensity of heat) + (fuel consumption * carbon intensity of fuel)
“`

where:

• electricity consumption is the amount of electricity consumed in kilowatt-hours (kWh)
• carbon intensity of electricity is the amount of carbon dioxide emitted per kilowatt-hour of electricity generated
• heat consumption is the amount of heat consumed in kilowatt-hours (kWh)
• carbon intensity of heat is the amount of carbon dioxide emitted per kilowatt-hour of heat generated
• fuel consumption is the amount of fuel consumed in liters (L) or gallons (gal)
• carbon intensity of fuel is the amount of carbon dioxide emitted per liter (L) or gallon (gal) of fuel burned

Another common method is to use a life cycle assessment (LCA) to estimate the Scope 2 emissions of a product or service. An LCA takes into account all of the emissions that occur throughout the product’s life cycle, from the extraction of raw materials to the disposal of the product at the end of its life.

How to Calculate Scope 2 Emissions?

Calculating Scope 2 emissions can be a complex task, but there are a number of resources available to help you. The following are some tips for calculating Scope 2 emissions:

• Start by gathering data on your organization’s energy use. This includes data on the amount of electricity, heat, and fuel that you purchase. You can find this information on your utility bills or from your energy supplier.
• Use a carbon intensity calculator to estimate the carbon dioxide emissions associated with your energy use. There are a number of online carbon intensity calculators available, such as the Carbon Dioxide Information Analysis Center (CDIAC) calculator.
• If you are using a life cycle assessment (LCA) to estimate your Scope 2 emissions, be sure to include all of the relevant emissions sources. This includes emissions from the extraction of raw materials, the manufacturing process, the transportation of products, and the disposal of products at the end of their life.
• Review your results and make adjustments as needed. Your initial estimates of Scope 2 emissions may not be accurate, so it is important to review your results and make adjustments as needed.

By following these tips, you can calculate your Scope 2 emissions with a reasonable degree of accuracy. This information can be used to improve your environmental performance and to make informed decisions about your business operations.

Scope 2 emissions are an important part of an organization’s overall carbon footprint, and they can be significant in size. By calculating and managing your Scope 2 emissions, you can take steps to reduce your environmental impact and improve your sustainability performance.

Here are some additional resources that you may find helpful:

• [The Carbon Disclosure Project (CDP)](https://www.cdp.net/en/)
• [The Greenhouse Gas Protocol (GHG Protocol)](https://www.ghgprotocol.org/)
• [The International Organization for Standardization (ISO)](https://www.iso.org/)

3. Sources of Scope 2 Emissions

Scope 2 emissions are indirect emissions that occur as a result of an organization’s activities but are not directly emitted from its own operations. These emissions can come from a variety of sources, including:

• Purchased electricity. The electricity that an organization purchases to power its operations can create emissions if it is generated from fossil fuels.
• Heat from purchased steam or hot water. Organizations that use steam or hot water to heat their buildings or processes may purchase this energy from a utility that generates it from fossil fuels.
• Transportation. The transportation of goods and services by an organization can create emissions if it is done by vehicles that run on fossil fuels.
• Other indirect emissions. There are a variety of other sources of scope 2 emissions, including the emissions from waste disposal, employee commuting, and the use of leased equipment.

It is important to note that scope 2 emissions are not always directly under the control of an organization. For example, an organization may not have the ability to choose where its electricity is generated or how its goods are transported. However, organizations can still take steps to reduce their scope 2 emissions by:

• Purchasing renewable energy. Organizations can purchase renewable energy certificates (RECs) to offset their electricity consumption. RECs represent the environmental attributes of a unit of renewable energy, such as solar or wind power. By purchasing RECs, organizations can help to support the development of renewable energy projects and reduce their reliance on fossil fuels.
• Improving energy efficiency. Organizations can reduce their energy consumption by making efficiency improvements to their buildings, processes, and equipment. This can be done by upgrading to more efficient appliances and lighting, insulating buildings, and using energy-efficient motors and drives.
• Investing in sustainable transportation. Organizations can reduce their transportation emissions by investing in sustainable transportation options, such as electric vehicles, public transportation, and carpooling.
• Managing waste. Organizations can reduce their waste and the associated emissions by recycling, composting, and reducing their use of packaging.
• Encouraging employee commuting alternatives. Organizations can encourage employees to commute to work in ways other than driving alone, such as by walking, biking, or taking public transportation.

By taking these steps, organizations can reduce their scope 2 emissions and help to fight climate change.

4. Mitigation Strategies for Scope 2 Emissions

There are a number of mitigation strategies that organizations can use to reduce their scope 2 emissions. These strategies include:

• Purchasing renewable energy. Organizations can purchase renewable energy certificates (RECs) to offset their electricity consumption. RECs represent the environmental attributes of a unit of renewable energy, such as solar or wind power. By purchasing RECs, organizations can help to support the development of renewable energy projects and reduce their reliance on fossil fuels.
• Improving energy efficiency. Organizations can reduce their energy consumption by making efficiency improvements to their buildings, processes, and equipment. This can be done by upgrading to more efficient appliances and lighting, insulating buildings, and using energy-efficient motors and drives.
• Investing in sustainable transportation. Organizations can reduce their transportation emissions by investing in sustainable transportation options, such as electric vehicles, public transportation, and carpooling.
• Managing waste. Organizations can reduce their waste and the associated emissions by recycling, composting, and reducing their use of packaging.
• Encouraging employee commuting alternatives. Organizations can encourage employees to commute to work in ways other than driving alone, such as by walking, biking, or taking public transportation.

These are just a few of the many strategies that organizations can use to reduce their scope 2 emissions. By taking action, organizations can help to fight climate change and create a more sustainable future.

Scope 2 emissions are an important part of an organization’s carbon footprint. By understanding the sources of scope 2 emissions and taking steps to reduce them, organizations can make a significant contribution to fighting climate change.

Here are some additional resources that you may find helpful:

• [The Carbon Trust: Scope 2](https://www.carbontrust.com/uk-business-support/carbon-footprint/scope-2)
• [The Climate Group: Scope 2](https://www.theclimategroup.org/blog/scope-2-emissions-what-are-they-and-how-can-you-reduce-them)
• [The World Resources Institute: Scope 2](https://www.wri.org/blog/2020/09/scope-2-emissions-what-are-they-and-how-can-you-reduce-them)

  How do I calculate Scope 2 emissions?

Scope 2 emissions are indirect emissions from the generation of purchased electricity, heat or steam. To calculate your Scope 2 emissions, you will need to:

1. Identify your Scope 2 emissions sources. This includes all electricity, heat or steam that you purchase from external providers.
2. Collect data on the emissions intensity of your Scope 2 emissions sources. This information is typically available from your electricity provider.
3. Multiply the emissions intensity by the amount of electricity, heat or steam you purchased. This will give you your total Scope 2 emissions.

For example, if you purchased 10,000 megawatt-hours (MWh) of electricity from a provider that has an emissions intensity of 0.5 kilograms of CO2 per MWh, your total Scope 2 emissions would be 5,000 kilograms of CO2.

What are the different methods for calculating Scope 2 emissions?

There are a number of different methods for calculating Scope 2 emissions, each with its own advantages and disadvantages. The most common methods include:

• The direct method: This method uses data on the emissions from each individual Scope 2 emissions source. This is the most accurate method, but it can be time-consuming and expensive to collect the necessary data.
• The proxy method: This method uses a proxy value to estimate the emissions from each Scope 2 emissions source. This is a less accurate method than the direct method, but it is less time-consuming and expensive to implement.
• The sectoral approach: This method uses average emissions data for a particular sector to estimate the emissions from each Scope 2 emissions source. This is a less accurate method than the direct and proxy methods, but it is the easiest to implement.

The best method for calculating Scope 2 emissions will vary depending on the specific circumstances of your organization.

What are the challenges of calculating Scope 2 emissions?

There are a number of challenges associated with calculating Scope 2 emissions, including:

• Data availability: The data required to calculate Scope 2 emissions can be difficult to obtain, especially for indirect emissions sources such as purchased electricity.
• Methodological uncertainty: There is no single, agreed-upon method for calculating Scope 2 emissions. This can make it difficult to compare the emissions of different organizations.
• Reporting requirements: The reporting requirements for Scope 2 emissions vary from country to country. This can make it difficult to comply with all applicable regulations.

Despite these challenges, it is important to calculate and report Scope 2 emissions in order to understand the full environmental impact of your organization.

How can I reduce my Scope 2 emissions?

There are a number of ways to reduce your Scope 2 emissions, including:

• Purchasing renewable energy: One of the most effective ways to reduce your Scope 2 emissions is to purchase renewable energy. This can be done directly from a renewable energy provider or through a renewable energy certificate (REC) program.
• Improving energy efficiency: You can also reduce your Scope 2 emissions by improving the energy efficiency of your operations. This can be done by investing in energy-efficient equipment, lighting, and appliances.
• Offsetting your emissions: If you are unable to reduce your Scope 2 emissions to zero, you can offset your emissions by investing in projects that reduce greenhouse gas emissions elsewhere.

By taking these steps, you can help to reduce your environmental impact and contribute to a more sustainable future.

In this article, we discussed how to calculate scope 2 emissions. We first defined scope 2 emissions and then discussed the different methods for calculating them. We also provided a case study to illustrate how to calculate scope 2 emissions for a specific company.

We hope that this article has provided you with a better understanding of scope 2 emissions and how to calculate them. By understanding your scope 2 emissions, you can take steps to reduce them and make your business more sustainable.

Here are some key takeaways from this article:

• Scope 2 emissions are indirect emissions that occur as a result of the activities of a company, but not directly from its own operations.
• The most common method for calculating scope 2 emissions is the purchased electricity method.
• Other methods for calculating scope 2 emissions include the upstream and downstream methods.
• By understanding your scope 2 emissions, you can take steps to reduce them and make your business more sustainable.