Quantifying GHG
UNDERSTANDING
Impact on climate
SMEs in Southeast Asia will soon face external regulatory and supply chain push to reduce their impact on climate change (i.e, reduce their own greenhouse gas emissions).
Regulatory push
Several countries in Southeast Asia have plans to implement carbon pricing mechanisms soon. This means large emitters will be required to pay for emitting greenhouse gases into the atmosphere.
Singapore implemented a carbon tax in 2019, with the price set at S$5/tCO2e from 2019 to 2023 to provide a transitional period to give emitters time to adjust. However, it announced at Budget 2022 that the carbon tax will be raised to S$25/tCO2e in 2024 and 2025, and S$45/tCO2e in 2026 and 2027, with a view to reaching S$50-80/tCO2e by 2030. It also announced that from 2024, carbon tax liable corporations can buy high-quality, international carbon credits to offset up to 5 per cent of taxable emissions in lieu of paying the tax. Other countries have / or are looking into carbon tax as a form of carbon pricing.
Indonesia has announced plans to introduce a carbon tax on coal-powered power plants in 2022. The proposed tax is priced at 30,000 IDR/tCO2e (or US$2.02 /tCO2e).
Vietnam is planning to develop a carbon pricing mechanism, whereas Thailand and Philippines are also actively involved in carbon market study.
The European Union (EU) will implement a Carbon Border Adjustment Mechanism where EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the good been produced under the EU’s carbon pricing rules.
Indonesia has announced plans to introduce a carbon tax on coal-powered power plants in 2022. The proposed tax is priced at 30,000 IDR/tCO2e (or US$2.02 /tCO2e).
Vietnam is planning to develop a carbon pricing mechanism, whereas Thailand and Philippines are also actively involved in carbon market study.
The European Union (EU) will implement a Carbon Border Adjustment Mechanism where EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the good been produced under the EU’s carbon pricing rules.
Want to protect your SME from the fast approaching dangers?
Supply chain push
Corporates are increasingly requiring actors along their supply chain to account for their greenhouse gas emissions.
For example, Kellogg Co announced that it will expand commitments into the supply chain by requiring all key suppliers to measure and publicly disclose their own emissions and reduction targets.
In time to come, more and more SMEs will face a similar supply chain push from larger corporates
The standard covers the accounting and reporting of seven greenhouse gases – carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).
GHG emissions can be categorised into three “Scopes”.
Scope 1
Direct GHG emissions from owned or controlled sources
Example sources : Direct fuel combustion, tailpipe emissions from vehicles owned by the company, fugitive emissions due to leakage within company’s facilities.
Scope 2
Indirect GHG emissions from the generation of purchased utilities
Example sources : Electricity from the grid or direct supplier (Purchase of heat and steam, however, this is less common for SMEs in ASEAN).
Scope 3
Indirect GHG emissions that occur in a company’s value chain
Example sources : There are 15 sub-categories including product distribution, business travel, embodied emissions of purchased goods (feedstock) and services, etc.
SCOPE 1
Direct GHG emissions from owned or controlled sources
GHG emissions = Activity Data X Emission Factor
What is an activity data?
Data that measures consumption of a fuel-based activity controlled or owned by an organisation. More information on data collection is available in the full guidelines.
Examples of data source and indicators:
| GHG Emission Activity Source | Indicator |
|---|---|
| Diesel/LPG Consumption – in boilers for example | Volume consumed (m3) or energy produced (ktoe, Btu, etc) |
| Coal Consumption – in boilers for example | Mass consumed (tonnes) |
| Compressed Natural Gas/Liquefied Natural Gas Consumption – in boilers for example | Volume consumed (m3) |
| Gasoline Consumption – in company owned vehicle | Volume consumed (litres) |
What is an emission factor?
Coefficient that describes the average pollutant emission rate of a given activity, such as fuel combustion. More Scope 1 emission factors are available in the full guidelines.
Examples of grid emission factors:
| GHG Emission Activity Source | Emission Factor |
|---|---|
| Diesel/LPG Consumption – in boilers for example | Diesel – 2.51 kgCO2e/litre LPG – 1.56 kgCO2e/litre |
| Coal Consumption – in boilers for example | 2.8 kgCO2e/tonne |
| Natural Gas Consumption – in boilers for example | 2.02 kgCO2e/m3 |
| Gasoline Consumption – in company owned vehicle | 2.19 kgCO2e/litre |
SCOPE 2
Indirect GHG emissions from the generation of purchased utilities (electricity)
GHG emissions = Activity Data X Grid Emission Factor
What is an activity data?
Data that measures consumption of a purchased utility for activities controlled or owned by an organisation. More information on data collection is available in the full guidelines.
Purchased utility also includes heat and steam. However, as mentioned in an earlier slide, this is less common for SMEs in ASEAN.
Example of data source and indicator:
| GHG Emission Source | Indicator |
|---|---|
| Electricity from the grid | Electricity consumed (kWh/MWh) |
What is a grid emission factor?
Coefficient that describes the average pollutant emission for each unit of electricity provided by an electricity system. More country-based grid emission factors are available in the full guidelines.
Examples of country-based grid emission factor:
| Country | Grid Emission Factor |
|---|---|
| Brunei Darussalam | 0.687 tCO2e/MWh |
| Lao PDR | 0.560 tCO2e/MWh |
| Myanmar | 0.474 tCO2e/MWh |
| Singapore | 0.406 tCO2e/MWh |
| Thailand | 0.432 tCO2e/MWh |
| Vietnam | 0.880 tCO2e/MWh |
Want to protect your SME from the fast approaching dangers?
Sample calculation of scope 1 and 2 greenhouse gas emissions
A steel mill manufacturing plant located in the Luzon region of the Philippines produces 50,000 tonnes of specialty hot rolled steel plates and coils per month. Key energy consuming equipment in the plant include a natural gas-powered reheating furnace and an electric-powered reversible rolling mill. Each month, the reheating furnace consumes 250,000 MMBtu (or 7 million m3) of natural gas and 5,000 litres of diesel. The plant’s monthly electricity consumption – for the rolling mill and lighting and other ancillary services – is 10 GWh, all of which is supplied by the grid.
The plant’s scope 1 and 2 greenhouse gas emissions are calculated as follows:
| Consumption of [in relevant units] | Quantity | Emission factor (kgCO2e/unit) | GHG emissions (kgCO2e) |
|---|---|---|---|
| Diesel [in litres] | 5,000 | 2.51 | 12,550 |
| Natural Gas [in m3] | 7,000,000 | 2.02 | 14,140,000 |
| Total Scope 1 GHG emissions | 14,152,550 kgCO2e
14.153 ktCO2e |
||
| Consumption of [in relevant units] | Quantity | Emission factor (tCO2e/MWh) | GHG emissions (tCO2e) |
|---|---|---|---|
| Electricity [in GWh] | 10 | 0.712 | 7,120 |
| Total Scope 2 GHG emissions [in ktCO2e] | 7.12 ktCO2e | ||
The plant’s total scope 1 and 2 greenhouse gas emissions is 21.27 ktCO2e
Carbon Footprint Calculator
