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Four areas of good practice in calculating your carbon emissions

The Technical Guidelines for Monitoring, Reporting and Verification of Greenhouse Gases by Industry include four areas that will assist in ensuing that there is an effective approach to calculating your carbon emissions.

These include:

1. Identifying the relevant reporting boundaries:

  • Companies are required to only report their South African sourced emissions data for National Reporting purposes, therefore they need to exclude emissions from sources outside of South Africa they will be reported on in their country of source;
  • Companies need only report direct emissions, being those that will most likely be created onsite. This may require a revision to the methods used to compute emissions;
  • Transport emissions are broken down into offsite and onsite transportation and do not need to be included in the submission of carbon data;

2. Identify the relevant sources of emissions

  • Emissions need to be categorized into IPCC sectors which include Energy, Industrial Products and Processes, and Waste. Agriculture, Forestry and Other Land Use is excluded;
  • There are six greenhouse gases need to be reported separately. This is another level of detail compared to the Greenhouse Gas Protocol.  These gases include Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), Hydrofluorocarbons (HFC’s), Perfluorocarbons (PFC’s), and Sulphur Hexafluoride (SF6).

3. Collecting the data and calculating the emissions:

  • Understand and apply the IPCC Tiered methodological approach, which requires the application of one of three “Tiers”. Tier 1 uses a Standard Emission Factor obtained from the global guidelines, whereas Tier 2 uses a locally determined Emission Factor.  Tier 3 applies for complex plants where a specific technology is used;
  • Use Emission Factors and the Global Warming Potentials (GWP) in line with IPCC requirements, which enables you to convert the five gases into Carbon Dioxide Equivalents;
  • CO2 emissions from biomass combustion for energy purposes are reported separately but report CH4 and N2O emissions from biomass. It is important for companies to report their emissions from Methane and Nitrous Oxide.

4. Reporting on the emissions:

  • Ensure that energy emission units are in line with the IPCC Guidelines in order to ensure that the NCV’s are used and the carbon is reported in Gigagrams;
  • Emissions should be reported by the calendar year with reporting in June and December, with any adjustments to be made in the following June;
  • The IPCC Guidelines require some form of Quality Assessment, Quality Control and verification. This is essential to ensure that the submissions are accurate and reliable.

 

The six steps to computing your carbon emission equivalents

The calculation of the carbon emission equivalents (CO2) for submission into the National Inventory can be viewed as complicated to understand.  The following six-step approach will enable you to simply determine your carbon emission equivalents.  It is important to note that most of the data required for the determination of your carbon emission equivalents requires you to access the Tables contained in the National Technical Guidelines.

Step Description

 

Source of

Information

Auditable
1 Determine the source of the emissions – one of three (Energy, IPPU, Waste)

 

Own reporting and Technical Guidelines

 

Yes
2 Identify the gases emitted from the production of the source (i.e. the Sector/Sub-Sector/Activity) of the emissions

 

Technical Guidelines Yes
3 Compute the Carbon Dioxide Equivalents of the identified gases to obtain a CO2 for those identified gases

 

Technical Guidelines Yes
4 Then using the Default Emission Factors and the Global Warming Potential compute the Carbon Dioxide Equivalents using the CO2 from above

 

Technical Guidelines Yes
5 Use the Emissions Factor for the product used to create the emissions and compute the Carbon Dioxide Equivalents for National Reporting purposes

 

Technical Guidelines and Submission to the DEA Yes
6 Use the Emissions Factor for the product used to create the emissions and compute the Carbon Dioxide Equivalents for National Reporting purposes

 

Own reporting and SARS return Yes

 

A worked example

You produce energy and heat from the use of 2 000 tonnes of sub-bituminous coal mined underground and used in its processes.

Step 1 – Determine the source of the emissions from the tables in the National Technical Guidelines

Energy – Energy and Heat

Step 2 – Identify the gases emitted from the production of the source of Energy and Heat Generation, which include

  • Carbon Dioxide (CO2) – 1
  • Methane (CH4) – 23
  • Nitrous Oxide (N2O) – 296

Step 3 – Compute the carbon dioxide with the following calculation

CO2 Equivalents = (CO2  x 1) + (CH4 x 23) + (N2O x 296)

Step 4 – Use the Default IPCC Emission Factors (Global Warming Potential – GWP)

CO2 Equivalents = (96 100 x 1) + (1 x 23) + (1.5 x 296)

= 96.567

Step 5 – Use the CO2 Emissions Factor for sub-bituminous coal

CO2e = 96.567 x 0.0192

= 1.8541

Step 6 – Compute the CO2e for Carbon Tax purposes

2 000 tonnes x 1.8541

= 3 708.20 tonnes of CO2e

This amount is then submitted into the national inventory and is drawn by SARS to compute the carbon tax payable.

 

You can read Part Two of Jeremy’s series on Carbon Tax here