Accounting: Scope 2
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      1. Climate Hub
      2. Corporate Carbon Footprint (CCF)
      3. Accounting: Scope 2

      Electricity (as of release 2.2.0)

      With the Smart Energy Module, you can automatically record your electricity consumption for up to 150 countries and regions. You also have the option to manually enter custom emission factors.

      1. Recording electricity consumption

      In order to calculate electricity emissions, companies must record precise information about their electricity consumption. The most common method of recording electricity consumption is to use purchasing documents such as invoices. In addition, relevant information can also be obtained from other purchasing documents or directly from the energy supplier, for example via a customer portal.

      Required activity data

      The activity data required for this calculation includes the amount of electricity consumed for the company:

      • Electricity consumption: Collect data on the amount of electricity. The most common method is to use purchase records.
      • Purchase records: The mass or volume of electricity entering the facility. This data can be based on receipts, purchase records or data provided directly by the energy supplier and/or the customer's online portal.

      2. Accounting for electricity in the Climate Hub as of release 2.2.0

      As of version 2.2.0, electricity consumption can be reported by clicking "Add own activity". Two options are available:

      A) Via the Smart Energy Module (recommended)

      B) As a custom activity (manual entry)

      A) Smart Energy Module

      Entering electricity consumption through the Smart Energy Module involves four steps:

      1. Name the activity

      First enter a meaningful name for your activity (“Kind”) and the country or region in which the electricity consumption took place. The year is set to the reporting year by default, but can be changed if required.

      2. Select the type of consumption
      Then decide whether the electricity consumption is recorded for a building or an electric car/plugin.

      • If you select “Building”, please enter the electricity consumption in the desired unit and choose the corresponding unit.
      • If you select “Car (electric/plugin)”, enter either the direct electricity consumption in kWh or the distance driven in kilometers. The conversion is based on the average power consumption of an electric car in the compact class (18.8 kWh/100km; [1]).

      3. Check for self-generation

      Indicate whether the electricity used was self-generated, e.g. by a photovoltaic system.

      • If you select “Yes”, the entry is completed by clicking the checkmark in the top right corner. Your consumption is then calculated with the CO2e factor of 0 g/kg. This applies both to scope 2 and to the upstream emissions in scope 3.3, as electricity generation from renewable sources by definition does not cause direct CO2 emissions. The consumption is also taken into account in E1-5 (line 10).
      • If you select “No” continue with the entry under step 4.

      4.  Enter a custom CO₂e factor

      Indicate whether you have an individual CO₂e factor from an invoice or a contract.

      • If you select “Yes”, enter the factor and add the corresponding source. Please note that the factor must fulfill the relevant quality criteria. For E1-5, also fill in the proportion of renewable energy and nuclear energy. The sum can be less than 100%, as the remaining share is automatically considered a fossil energy source.
      • If you select “No”, you have the following options.
        • If you purchase 100% green electricity, please enter 100% for renewable energy. The share of nuclear energy is automatically filled in with 0%.
        • If you purchase an electricity mix for which you do not know the emission factor and the breakdown of energies, you do not need to specify the shares of renewable and nuclear energy. Based on the country or region you provide, an appropriate emission factor and the corresponding shares of energy sources will be used automatically.

      Guarantees of Origin

      Any time you enter the share of renewable energy, you can also choose whether you have certificates for this share, e.g. in the form of guarantees of origin. Choose between “bundled” and “unbundled” and enter the type of certificate. This information is automatically used for E1-6 “Additional”.

      Correction of input values

      If you need to correct your total electricity consumption, please note that the shares of renewable and nuclear energy are recalculated based on the percentage entered.

      B) Custom Activity

      Entering electricity consumption manually as an individual activity involves several steps:

      1. Name the activity

      Enter a name for your activity in the field "Kind". This field is mandatory.

      2. Market-based emissions factor

      Indicate whether you have a market-based emissions factor.

      If "Yes":
      An entry form will open. Provide:

      • direct emissions factor and upstream factor for the market-based approach

      • unit of the factors (mandatory; selected via dropdown)

      • the source of the factor

      • optional: specify individual gases in the expanded section

      If "No":

      No market-based entry form will appear. Input continues directly in the location-based section.

      In this case, the VERSO Climate Hub will calculate emissions solely using location-based factors – also for the market-based method.
      Note: The unit dropdown in the location-based section will then be active, and unit selection is mandatory.

      3. Location-based emissions factor

      Provide:

      • direct emissions factor and upstream factor for the location-based approach

      • unit of the factors (via dropdown)

        Note: If you previously selected "Yes"  when asked about a market-based emission factor, the dropdown menu in this section is disabled and automatically adopts the unit from the market-based section.
        If you selected "No", the dropdown menu is active here and selecting a unit is mandatory.

      • the source of the factor

      • optional: individual gases and biogenic emissions in the expanded section

      In the section "Required for ESRS E1-5", also specify:

      • whether the energy was self-generated

      • the share of renewable energy (%)

      • the share of nuclear energy (%)

      This information is required for the E1-5 calculation (see point 4 under Energy consumption).

      3. CO₂e Calculation Methodology

      3.1 Market-based and location-based approaches

      In the Climate Hub, your electricity consumption is always calculated in two ways: location-based and market-based. The results will be displayed separately in your greenhouse gas balance.

      Smart Energy Module

      • Location-based: Based on the country/region and year entered, a suitable factor from the climatiq database is used. Further information can be found here [2].
      • Market-based: If you have entered your own factor, this will be used for the CO2e calculation. Otherwise, a suitable factor from the climatiq database will be used [2].

      Both for the location-based and market-based approach, the upstream emissions are considered as follows:

      • Your consumption will be automatically entered in Scope 3.3 upstream emissions.
      • The CO2e value and the CO2 factor for upstream emissions consist of three different aspects: emissions are calculated separately for “well-to-tank”, “transmission & distribution” and “well-to-tank of transmission & distribution”, and are displayed as a total value for better clarity.

      Custom Activity

      • Location-based: Uses the factors entered in the location-based section.

      • Market-based: Uses the factors entered in the market-based section, or (if none are provided) defaults to location-based factors.

      3.2 Emissions factors in the PDF report

      The PDF report lists all factors and sources used – both those applied via the Smart Energy Module and those entered manually as custom activities.

      3.3 Emissions in the Climate Hub

      The emissions displayed as the initial estimate in the Climate Hub (top right) depend on the Scope 2 method selected in the "Basic Data" tab and the resulting emission factors.

      Special cases in the Smart Energy Module:

      For activities recorded via the Smart Energy Module, a color symbol may indicate whether all calculations have been taken into account. The text appears when hovering. Detailed information can be found here [2].

      • Unable to find a residual mix factor for the requested region, the supplier mix will be used instead, this will likely result in underestimating this portion of the energy usage.
      • Applying global default well to tank percentage due to absence of an applicable emissions factor.

      4. Methodology for ESRS E1-5

      Smart Energy Module

      In the Climate Hub, your energy balance is automatically calculated. As soon as you specify whether an individual CO2e factor from an invoice or a contract is available, there are several options for how this is done:

      • If you have selected “Yes”, the information on “share of renewable energy” and “share of nuclear energy” is included in the E1-5 calculation.
      • If you have selected “No” and purchase 100% green electricity, this information will be taken into account accordingly.
      • If you have selected “No” and know neither the emission factor nor the breakdown of energy (i.e. the fields are empty), the breakdown is carried out automatically taking into account the country/region, the year and the market-based factor used from the climatiq database. The following sources are used:
        • Australian Energy Update (Australian Government, Department of Climate Change, Energy, the Environment and Water) for Australia + regions
        • European Residual Mix (Association of Issuing Bodies) for most European countries
        • Climate Transparency Report for Brazil, China, EU, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey
        • Canada's Official Greenhouse Gas Inventory (Government of Canada) for Canada + regions
        • Energy in New Zealand (Ministry of Business, Innovation & Employment) for New Zealand
        • eGRID (United States Environmental Protection Agency) for USA + regions

      Custom Activity
      The entries made in the section "Required for ESRS E1-5" (shares of renewable and nuclear energy) are included in the E1-5 calculation.

      5. Methodology for ESRS E1-6

      Smart Energy Module

      The following data points for ESRS E1-6 are displayed in the Climate Hub under the “Additional” tab:

      • Percentage of contractual instruments in scope 2: total, bundled with attributes about energy generation and unbundled energy attribute claims
      • Types of contractual instruments in scope 2

      These data points refer to Article 45 (d) of Disclosure Requirements E1-6 - Gross Scopes 1, 2, 3 and Total GHG emissions [3].

      Custom Activity
      Currently, entering contractual instruments is not supported for custom activities.

       

      References 

      [1] Studie zum deutschen Innovationssystem | Nr. 9-2022, ISSN 1613-4338

      [2] How to select electricity emission factors - Scope 2 guidance (Climatiq)

      [3] Topical Standards Environment E1 Climate Change: Draft European Sustainability Reporting Standards, November 2022