How to Calculate Greenhouse Gas Emissions

Here's how companies can calculate their GHG emissions using standard emission factors and product carbon factors.

Greenhouse gas (GHG) calculations are based on the core principle that the total emissions associated with an activity or process can be estimated by multiplying the activity data by the corresponding emission factor (EF). This principle is derived from the fact that emissions are directly proportional to the quantity or magnitude of the activity being measured.

Calculation of Estimated Emissions

Once you have identified your organizational and operational boundaries, estimating emissions using EFs can be summarized as follows:

Below are the steps to calculating the emission of product, with examples of values and how to apply the calculation formula:

Identify your emission sources
E.g., Electricity consumption in Germany in 2023
Collect activity data
E.g., 1000 kWh of electricity consumed
Find emission factor
E.g., 150kg tCO₂e per kWh of electricity consumed in Germany
What makes up the emission factor here will likely be the combustion of coal/fuel at a power plant to generate electricity to export for consumption in the domestic grid.
Multiply activity data by the corresponding emission factor
E.g., 1000 kWh x 150 kg CO₂e per kWh = 150,000 kg CO₂e for electricity consumed in Germany in 2023

Standard Factors

Standard factors are predetermined values used to estimate emissions for common activities or processes. They provide average emission values based on typical or average conditions. Here are some examples of standard factors commonly used in GHG calculations:

Electricity consumption: average emissions associated with the generation, transmission, and distribution of electricity
Fuel combustion: emissions resulting from burning fuels like coal, oil, natural gas, or biomass.
Transportation: passenger cars, trucks, airplanes, or trains
Waste management: emissions associated with waste decomposition, methane release, or combustion processes, waste management activities such as landfilling or incineration
Industrial processes: cement production, chemical manufacturing, or steel production

Product Carbon Factors

Product carbon factors (PCF), also known as carbon footprints or life cycle inventories (LCI), measure the total GHG emissions associated with a product or service throughout its entire life cycle. This life cycle typically includes stages such as raw material extraction, production, distribution, use, and end-of-life disposal. When calculating product carbon factors, the following aspects are considered:

Raw material extraction: The emissions associated with the extraction or harvesting of raw materials, such as metals, minerals, or agricultural products
Manufacturing and production: Emissions resulting from energy consumption, chemical processes, and transportation during manufacturing and production
Distribution and transportation: Emissions from transporting the product to distribution centers, retailers, or customers
Use phase: Emissions resulting from the use or operation of the product, such as energy consumption or resource usage
End-of-life disposal: The emissions associated with the disposal, recycling, or treatment of the product at the end of its life cycle

PCFs are more accurate than standard factors as they are tailored to specific products. They reflect the activities, inputs, and outputs at each life cycle stage listed above for the specific product.

Take this example for estimating the upstream (cradle-to-gate) emissions of a T-shirt:

A standard EF might be ‘T-shirt production, global (kgCO₂e)’. This means the emission factor is a global average or estimate of emissions related to product a kg of T-shirts. It has broad assumptions related to the materials, energy, industrial techniques, and other related inputs used in manufacturing.
A PCF on the other hand would be an estimation of emissions (likely tCO₂e emitted per kg of T-shirts or per T-shirt) specific to the upstream journey of a T-shirt. This would make measurements or estimates specific to the materials used, logistics, energy systems, and other inputs, leading to an emission factor of high confidence and quality.

Where is data typically stored?

Companies often reach a stage where traditional spreadsheets and manual processes are not enough; they need a more advanced solution to collect, organize and streamline their data. This is where Enterprise Resource Planning (ERP) software comes into play.

An ERP system is a powerful software solution that stores and provides data across various departments within a company. It operates on a standardized data structure, ensuring that information entered by one department becomes instantly accessible to authorized users across the organization. This real-time data integration is seamlessly woven into business processes and workflows, facilitating collaboration and driving efficiency across departments. ERP systems serve two main purposes:

Provide a single source of truth by gathering data from various departments and ensuring consistency and accuracy throughout the organization
Offer a suite of integrated modules that automate and optimize key business processes including inventory management, financial management, HR management and customer relationship management

As your company's collection becomes more intricate and extensive, it is useful to consider using an ERP system to effectively manage and streamline your data.