Emission factors: methods, system boundaries, and calculations for scope 1-3

The quality of a CO₂ balance depends largely on the choice of emission factors. These factors, together with precise activity data, form the foundation for reliable calculations in the Corporate Carbon Footprint (CCF) and Product Carbon Footprint (PCF). The level of accuracy and effort required varies depending on the methodology: while financial-based factors allow for easy data collection, supplier-specific factors provide the highest level of precision. Additionally, system boundaries play a crucial role in defining which emissions are considered. This article provides an overview of methodologies, system boundaries, and CSRD-compliant application of emission factors while showcasing how Tanso helps industrial companies measure emissions precisely and efficiently.

What is an emission factor?

An emission factor is a numerical value that indicates how many greenhouse gases (e.g., CO₂, CH₄, N₂O) are emitted during a specific activity or resource use. It is typically expressed as the mass of emissions per unit of activity, such as kilograms of CO₂-equivalent (kg CO₂e) per kilowatt-hour of energy consumption (kWh) or per ton of material. Emission factors are used to calculate the carbon footprint of processes, products, or entire companies, helping quantify emissions across the entire value chain.

Calculating CO₂-emission factors

Three primary methodologies rely on different types of emission factors:

Financial-based method

The financial-based method calculates emissions by assessing the amount of greenhouse gases emitted per monetary unit spent on a specific activity. This approach simplifies data collection, as emissions are directly derived from financial expenditures. However, its accuracy is limited since financial fluctuations and price differences do not necessarily reflect actual emission levels.

Industry-average method

The industry-average method calculates emissions using industry-specific average factors per unit of consumption. It provides greater accuracy compared to financial-based methods but demands extensive data collection. However, its precision may be limited if specific consumption data for certain activities is unavailable.

Supplier-specific method

The supplier-specific method calculates emissions per unit of consumption using supplier-provided data, offering the highest level of accuracy by relying on actual company-specific values rather than industry averages. However, its availability is limited, as only a few suppliers provide their own emission factors.

System boundaries of emission factors

System boundaries define which process steps are considered in emissions calculations for a product or activity. In other words, they establish what is included or excluded from the calculation. According to the GHG Protocol, companies must collect data for all processes within their inventory boundary. The system boundary should encompass all attributable processes related to the greenhouse gas inventory, product, or activity. The extent of this boundary determines which emissions are included.

System boundaries for products

Cradle-to-Gate

The Cradle-to-Gate system boundary includes all emissions from raw material extraction to the point where the product leaves the reporting company, typically after the production process. It does not account for emissions from product usage or end-of-life phases. Companies that adopt this system boundary must disclose it in their inventory reports.

Gate-to-Gate

The Gate-to-Gate system boundary considers only emissions generated within the production unit or office building of the reporting company. It does not include emissions from raw material procurement, product usage, or end-of-life processes. This approach is applied in Scope 1.4 to measure refrigerant leaks, while refrigerant purchases are classified under Scope 3.1.

Cradle-to-Grave

It refers to a system boundary that encompasses the entire life cycle of a product, from material acquisition through to end-of-life. It includes all the processes involved in the production, use, and disposal of a product or activity. This boundary allows for a comprehensive assessment of the environmental impacts associated throughout the entire life cycle.

System boundaries for energy, transport, and vehicles

Well-to-Wheel (WTW)

The Well-to-Wheel (WTW) approach provides a comprehensive assessment of energy consumption and greenhouse gas emissions, spanning the entire lifecycle of a fuel from production to combustion. It encompasses both the Well-to-Tank (WTT) phase, which covers fuel extraction, processing, and distribution, and the Tank-to-Wheel (TTW) phase, which accounts for emissions generated during fuel combustion in vehicles or machinery.

Tank-to-Wheel (TTW)

The Tank-to-Wheel (TTW) approach measures energy consumption and greenhouse gas emissions from the point of fuel transfer to its combustion in engines, burners, or vehicles.

Well-to-Tank (WTT)

Evaluates energy consumption and emissions from fuel production (e.g., gasoline, diesel, electricity, natural gas) up to its delivery.

Relevance of Scope 1-3 emissions

In Scope 1, supra-regional emission factors can be used for fuels since the geographical location of consumption does not play a decisive role (e.g., diesel, gasoline). However, the CSRD requires detailed disclosure of the composition, including the proportion of fossil and renewable energy sources.

For Scope 2, regional emission factors and supplier-specific data from the electricity provider are mandatory, as required by the CSRD. Tanso provides country-specific average data to enable a well-founded calculation. Additionally, a specialized article on electricity emission factors can offer further insights.

In Scope 3, particularly in procurement, the majority of emissions arise. A quantity-based accounting approach is essential, along with close collaboration with suppliers to effectively reduce emissions.

Regionality also plays a crucial role, as emission values vary significantly depending on the country of origin—for instance, steel from China has a vastly different CO₂ footprint than steel from Germany. Tanso provides granular industry-specific values, though the use of supplier-specific data remains the most precise approach for calculations.

Emission factor mapping in Tanso

‍Tanso provides access to a wide range of high-quality databases, including DBEIS, AIB, BAFA, IDEMAT, Ökobaudat, and more. If needed, the system can be flexibly expanded with custom data, supplier data, or commercial databases to create tailored solutions. Tanso's calculation model, including emission factors for Scope 1, 2, and 3, is fully certified in accordance with the requirements of the GHG Protocol and ISO standards. For Scope 1 and Scope 2, Tanso utilizes emission factors specifically optimized for CSRD requirements, enabling automatic and precise calculations of location-based emissions while accounting for energy mix considerations. With AI-powered mapping, relevant emission factors can be efficiently assigned, significantly streamlining the calculation process.

Another key feature is the compatibility with PCF calculations, ensuring a consistent methodology across the entire value chain. Additionally, Tanso provides fully versioned emission factors that are regularly updated, enabling audit-compliant traceability. Furthermore, a beta version already allows for direct supplier data retrieval via Tanso. This simplifies communication with suppliers and facilitates the seamless integration of specific emission values into calculations.