Carbon Accounting Guide

Scope 2 Emissions: Understanding Indirect Emissions from Purchased Energy

Summary

Scope 2 emissions are indirect greenhouse gas (GHG) emissions from the consumption of purchased electricity, steam, heating, or cooling. These emissions occur at the facility where the energy is generated but are indirectly attributed to the company that consumes the energy. Scope 2 emissions are a significant portion of many companies' carbon footprints and provide a clear opportunity for reduction through energy efficiency and renewable energy sourcing.

What are Scope 2 Emissions?

Scope 2 emissions represent the environmental impact of energy purchased by a company. The Greenhouse Gas (GHG) Protocol divides Scope 2 emissions into two categories: location-based and market-based.

• Location-based emissions: Reflect the average emissions intensity of the local grid where the energy is consumed.
• Market-based emissions: Reflect emissions from energy purchased through specific contracts, such as renewable energy agreements.

Types of Scope 2 Emissions

1. Purchased Electricity

Purchased electricity refers to the energy consumed from the grid or other electricity providers.

• Example: Electricity used to power office buildings, factories, or retail stores.
• Common Sources of Data:
  • Electricity bills and invoices.
  • Smart meter readings.
  • Utility company emissions factors (for market-based reporting).
  • Regional grid emissions factors (for location-based reporting).

2. Purchased Steam

Steam purchased by companies for industrial or heating purposes also contributes to Scope 2 emissions.

• Example: Steam used in manufacturing processes or for heating large facilities.
• Common Sources of Data:
  • Supplier invoices for purchased steam.
  • Steam flow meters installed on-site.
  • Emissions factors provided by the steam supplier.

3. Purchased Heating

Purchased heating involves energy acquired from external providers to heat company facilities.

• Example: District heating systems supplying thermal energy to an office building.
• Common Sources of Data:
  • Heating bills or contracts with district heating providers.
  • Documentation on the fuel mix or emissions factors for district heating systems.

4. Purchased Cooling

Cooling involves energy purchased for air conditioning or refrigeration, often from district cooling systems or similar setups.

• Example: Cooling provided by a centralised district cooling system in urban areas or industrial parks.
• Common Sources of Data:
  • Cooling service invoices.
  • Cooling energy meters (if installed).
  • Emissions factors for district cooling providers.

Conclusion

Scope 2 emissions are an indirect but significant part of a company’s carbon footprint, reflecting the environmental impact of purchased energy. Measuring Scope 2 emissions provides critical insights into the company’s reliance on energy-intensive processes and identifies opportunities for improvement.

By sourcing renewable energy, improving energy efficiency, and optimising energy use, organisations can significantly reduce their Scope 2 emissions. These reductions not only contribute to sustainability goals but also enhance resilience to future energy market changes. Tackling Scope 2 emissions is a powerful step toward creating a greener, more sustainable business.