Tanso electricity emission factors: a robust and accurate way to calculate Scope 2 emissions

Introduction to electricity emission factors

The power sector is the largest source of Greenhouse gas (GHG) emissions globally, accounting for around 26% of overall emissions (Statista, 2023). Electricity is generated either from high carbon-emitting sources such as coal, natural gas, and other fossil fuels, or from low or zero carbon-emitting sources such as solar, wind, nuclear, and hydropower. In a Corporate Carbon Footprint (CCF) according to the GHG Protocol, electricity emissions are accounted for in Scope 2 for direct emissions and Scope 3 category 3 for emissions from the supply chain to produce the electricity.

An electricity emission factor quantifies the emissions producing a unit (usually represented in kWh or MWh) of electricity from a combination of different energy sources. Electricity emission factors are expressed in two ways:

• Location-based emission factor represents the emissions from electricity that is transferred to households, companies, etc. via the physical grid. It considers:
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  • Grid Composition: The energy sources (coal, gas, renewables, etc.) powering the grid.
  • Electricity Transmission: Emissions from delivering electricity to consumers.
  • Regional Variations: Emission factors vary by region based on the energy mix (e.g., coal-heavy grids have higher factors, renewable-heavy grids have lower ones).
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• Market-based emission factor represents emissions from electricity purchased by a company from the electricity market. Market-based emissions are different from the emissions from the location-based emissions approach.
  There are various instruments or contracts through which can account for market-based emissions:
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  • Renewable Energy Certificates (RECs)
  • Power Purchase Agreements (PPAs) or direct contracts,
  • Energy Attribute Certificates (EACs) and
  • The residual mix which represents the emissions and electricity left after subtracting the renewable energy accounted for through RECs, PPAs, and EACs from the location-based electricity generation. Note: Residual mix is applied in regions where there is a market for consumers to purchase a specific type of electricity like green electricity. This includes most of the European countries and the USA for now.

Example

In Ludwigshafen, Germany, a location-based factor reflects emissions from electricity generation on the German grid, including coal, gas, wind, solar, and nuclear. Emissions are calculated per kWh based on the grid's average intensity. But now if a company in Ludwigshafen was purchasing green electricity from a third party provider via a PPA, that would be a market-based approach.

Note: According to the GHG protocol and ISO 14064 standards, a reporting company needs to account for both location- and market-based approaches while calculating emissions from electricity.

Need for updated, robust, and reliable electricity emission factors

Electricity emissions play a pivotal role in a company’s CCF. For global companies, it’s essential to track electricity consumption across facilities and understand its impact on the overall carbon footprint. This not only helps pinpoint emission hotspots but also encourages the transition to green electricity through contractual instruments—one of the fastest and most effective ways to achieve significant emission reductions.

Given its importance in CCF, and particularly for European companies under the Corporate Sustainability Reporting Directive (CSRD), using updated emission factors based on robust and reliable methodologies is crucial. However, there is a notable lack of high-quality, open-source data providers offering comprehensive electricity emission factors that cover all countries while meeting the stringent requirements of the GHG Protocol, ISO 14064, and CSRD.

This gap presents a major challenge for companies aiming to take decisive steps toward sustainability. Without access to accurate, open-source data for high-emission activities like electricity, these efforts are hindered, making it harder for businesses to align with their sustainability goals and compliance standards.

Tanso electricity emission factors

To support our customers in meeting the requirements of both the Corporate carbon footprint (CCF) and the CSRD, Tanso has developed location-based emission factors for more than 200 countries and streamlined the electricity accounting approaches in the Tanso app.

Key Features of the Tanso Electricity Dataset

• National location-based Emission Factors: The dataset reflects emissions from consuming 1 kWh of electricity from 200 national grid mixes, with transmission and distribution (T&D) losses and energy trade already accounted for.
• Market-Based Emission Factors: Automated mapping and reporting for both market-and location-based emissions, where provider-specific documentation or public residual mixes are available.
• Scope-Specific Data: Separate emission values are provided for Scope 2 and Scope 3 emissions for each country.
• Energy Share Insights: Alongside emissions data, the dataset includes information on each country's energy mix, as needed for CSRD reporting.

Tanso’s location-based electricity dataset leverages data from EMBER. EMBER is an independent, non-profit think tank dedicated to accelerating the transition from coal to clean energy through data-driven insights and policy advocacy.

About Tanso

Tanso is the comprehensive software solution for mid-sized manufacturing companies, efficiently addressing the key challenges of sustainability reporting. The TÜV-certified, audit-compliant software integrates Corporate Carbon Footprint (CCF), Product Carbon Footprint (PCF), CSRD, EU Taxonomy, and CBAM into a single centralized platform.