GHG Base Years and Scopes
Understanding why we need a Greenhouse Gas Strategy (GHG) and having set some boundaries, there are a few additional steps we need to take before we get down to actual reduction tactics as I continue my series on GHG Reduction Strategy:
Setting a base year. Seems simple enough, but this is an important decision and some level of thought should go into selecting a good base year. The emissions calculated for the base year data is the data against which emissions will be compared over time.
What do I mean by a “good base year?” The base year should be representative of the organization’s typical emissions. This means you have data, and the data is consistent with typical emissions for the organization. Years with heavy amounts of vacancy or lease-up may not yield the most representative base years.
The base year data should also be verifiable and reliable. Similar to the transactional data that you are going to compare against the base year, the quality of the data is important if it is intended to be meaningful and actionable.
In some cases, it may be desirable to use the average of several years for an average. This is more likely the exception rather than the rule, however in cases with extreme fluctuations from year to year, it is a viable approach. Unlike single-year goals, this approach is less vulnerable to inter-annual fluctuations, which can pose challenges to meeting a single-year goal.
In addition to setting a base year, the GHG Strategy should identify the standardized and accepted methodology to calculate the GHG emissions from each identified source. Personally, I recommend following the lead of the EPA and using The World Resources Institute/World Business Council for Sustainable Development (WRI/WBCSD) GHG Protocol Corporate Accounting and Reporting Standard (GHG Protocol).
Finally, each of the seven major GHGs should be included:
carbon dioxide (CO2)
methane (CH4)
nitrous oxide (N2O)
hydrofluorocarbons (HFCs)
perfluorocarbons (PFCs)
sulfur hexafluoride (SF6)
nitrogen trifluoride (NF3)
Within each emission, there are going to be emission source types and quantifying emissions that we need to keep in mind.
The most obvious emission source type is Scope 1 Direct Emissions. Scope 1 GHG emissions occur from sources that are owned or controlled by the organization. Examples include boilers used to heat buildings, refrigerant leakage from air conditioners, or travel in a fleet vehicle. Scope 1 sources may also include leased vehicles or equipment for which the organization pays the fuel bills or can access the fuel use data.
I like to think of this in regards to the location of the flame that is “burning” the fuel that results in the emission. If the flame is on property owned or controlled by the organization, the emissions are obviously yours.
Stationary Combustion leads the way in real estate. Often this is in the form of natural gas, propane, or heating oil used for a boiler. It can, however, also be gas cooktops, bar-b-que grills, or even fire pits.
Sometimes in Real Estate, we focus almost exclusively on these stationary combustion sources and fail to recognize mobile source emissions. However, if the organization owns cars or other vehicles which use fuel then it has mobile source emissions. A few different methods are used to calculate these emissions; one of the more popular is the tracking of the actual fuel purchased for the vehicles or the mileage for each vehicle and the fuel economy for each. From there, the fuel expended can be determined.
Another area sometimes neglected by real estate and more likely a bigger issue in industrial properties is refrigeration and air conditioning leakage. Refrigeration and Air Conditioning (AC) Equipment Emissions that result from leaks or releases from refrigeration and AC devices result in the release of chemicals with global warming impact during use, maintenance, and/or disposal of the device. EPA guidelines around what leaks have to be reported and penalties for failure to report said leaks under Section 608 of the Clean Air Act.
Note that there is also a chronic leak requirement, which pertains to Owners/operators of appliances with leaks 125% or more of its full charge in one calendar year. In this case, a report must be filed with the EPA describing efforts to identify leaks and repair the appliance.
Some refrigerants are exempt from the refrigerant management requirements. Examples include carbon dioxide, nitrogen, and water. For a full list of exempt refrigerants, see 40 CFR § 82.154(a).
When it comes to refrigerants, having an inventory of what equipment you have deployed and the refrigerant types for each can be insightful. This can be gathered via survey and updated in annual property inspections. The older the equipment, the more likely you will run into prohibited refrigerants, such as R22, which, as of January 1, 2020, the production and import are illegal in the United States. Similar refrigerants have other dates associated. Being aware of these “refrigerant retirement” dates can help not only from a risk identification perspective but also from a supply and cost perspective. While it is still legal to operate R22 cooled equipment, the ban on new R22 entering the market places a premium on existing market supply, driving up costs and limiting availability.
Scope 2 emissions are included, which are indirect emissions are emissions from energy (e.g., electricity, heat, and steam) consumed in owned or controlled equipment or operations but generated by another entity other than the reporting organization. Often this generation occurs offsite. The best example is electricity. Most properties require electricity to be provided via the grid to the property. This electricity powers items on-site, ranging from lights to heating and ventilation, from plug load to air conditioning. This electricity, however, is created by burning fuel at a power plant operated by a third party, like the utility company. Therefore, the indirect emissions of the reporting organization are the direct emissions of the third party that operates the power plant. For most organizations, purchased electricity is the largest source of indirect GHG emissions and the most significant opportunity to reduce those emissions.
Note that Scope 2 emissions do not have to be just electricity, however. In cities with Steam or heat that is produced off-site and supplied to a property via a third party, this steam or central district heat is also a Scope 2 emission.
A bit trickier are Scope 3 emissions. Scope 3 indirect emissions are a consequence of the activities of an organization but are not owned or controlled by the organization. Typically reporting these emissions is considered voluntary, but reporting them does help illustrate the level of transparency the organization is providing into its own operations. Examples of Scope 3 emissions include solid waste disposal (landfill waste), supply chain emissions, and employee commuting or travel.
At this point, we have covered most of the basics that need to be addressed in advance of strategy development. In future installments of this series, we will take a look at some specific tactics that might be incorporated into the overall GHG Reduction Strategy and discuss how to actually calculate the Greenhouse Gas Emissions and create a GHG Inventory Management Plan.
Until then, please consider helping to reduce the impact of the built environment by sharing this blog with your peers. Together we can impact the 39% of greenhouse gasses attributed to the built environment. It starts with awareness, and we succeed with teamwork.
Stay well!
Chris Laughman is the ThirtyNine Blog author, a blog dedicated to reducing the impact of the built environment. When not blogging, Chris is helping the real estate industry reduce energy and water impact as the Vice President of Sustainability for Conservice, the Utility Experts. Whether Multifamily, Single Family, Student Housing, Commercial, or Military, we simplify utility billing and expense management by doing it for you. Our insight into your utility consumption provides an opportunity to identify risks. Leveraging innovation and experience, we ignite solutions with real impacts and track performance to ensure the trendline stays laser-focused on the goal. To get there, we must build relationships within our organizations and outside of our organizations building the critical mass needed to truly make a difference. We have before us a tremendous opportunity. Standing shoulder to shoulder, we will get this done. Contact me at claughman@conservice.com for more information.
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