How companies collect or estimate Direct and Indirect Emissions in practice

Companies collect or estimate greenhouse gas (GHG) emissions using standardized frameworks, primarily the GHG Protocol, which classifies emissions into Scope 1, 2, and 3 categories. These cover direct and indirect emissions associated with a company’s operations and value chain. Scope 1: Direct Emissions Scope 1 emissions are those from sources owned or controlled by the company, such as emissions from on-site fuel combustion or company-owned vehicles. Companies typically collect fuel consumption data from invoices, fuel logs, or internal monitoring systems. To estimate emissions, they multiply this data by emission factors, which represent the amount of GHG released per unit of fuel or material used. Emission factors are often sourced from government agencies like the U.S. Environmental Protection Agency (EPA) or the UK’s DEFRA. In facilities with significant emissions, companies may use continuous emissions monitoring systems (CEMS) for direct measurements. For instance, a manufacturer burning natural gas in a boiler would track gas usage and apply a standard CO₂e factor to estimate emissions. Scope 2: Indirect Emissions from Purchased Energy Scope 2 emissions result from the generation of purchased electricity, steam, heating, or cooling consumed by the company. These emissions occur at the power plant but are accounted for by the end-user. Companies obtain electricity consumption data from utility bills and calculate emissions using either a location-based method (using average grid emission factors) or a market-based method (using supplier-specific emission factors).