The GHG Protocol requires emissions from electricity to be reported in two ways: location-based, using the grid average, and market-based, using your actual electricity purchases.
Location-based and market-based are the two methods the GHG Protocol requires when companies report emissions from their electricity consumption. This is sometimes called dual reporting, but the purpose is transparency, not double counting. Both figures must be included in reporting, and this also applies under CSRD.
Location-based method
The location-based method uses the average emission factor for the grid where consumption takes place, meaning the official electricity mix for the country or region. It shows the average carbon intensity of the grid and provides a comparable point of reference.
Market-based method
The market-based method is based on the company’s actual electricity purchases and contracts. If you have bought electricity with guarantees of origin from renewable sources, that share can be reported with an emission factor close to zero. The rest is calculated using the emission factor for the residual mix, meaning the electricity production that remains after green certificates have been sold. The residual mix typically has a higher emission factor than the national average.
Guarantees of origin are not offsets
Guarantees of origin and green electricity certificates apply only to scope 2 calculations and must not be confused with offsets. There is no requirement to buy green certificates, but without them market-based emissions will normally be higher. The difference between the two figures therefore often becomes a clear indicator of a company’s energy strategy and purchasing policy.
Both methods in Enity EMS
Enity EMS distinguishes between location-based and market-based emissions and can apply multiple scope values per resource type, so you can follow the totals for both methods in your carbon accounting.
Want to see your electricity consumption reported both location-based and market-based? Book a demo and we will show you how it works with your own data.
Emission factor
An emission factor states the average greenhouse gas emissions per unit, for example per kWh of electricity or litre of diesel. Consumption times the emission factor gives the emissions.
An emission factor states the average greenhouse gas emissions per unit of an activity. It is the building block of all carbon accounting, because it links your consumption data to emissions.
How an emission factor is used
The basic principle is simple: consumption × emission factor = emissions. You take activity data, such as kWh of electricity, litres of diesel or money spent on purchases, and multiply it by the corresponding emission factor. The result is converted to CO2e so that different greenhouse gases can be compared and added up.
kWh of electricity × emission factor for the electricity mix
litres of diesel × emission factor for the fuel
kg of material × emission factor for production
Why documentation matters
Emission factors are updated regularly, and historical data can change. That is why you need to be able to show which emission factors were used and where they came from. It is important to save the method and data basis for each reporting period so the accounts can be verified, for example by an auditor or under CSRD.
Emission factors for electricity
For electricity there are two types of factors: the average factor for the grid, used in the location-based method, and factors based on your electricity purchases, used in the market-based method. Read more under location-based and market-based.
Emission factors in Enity EMS
Enity EMS provides documented emission factors, and you can add your own with supporting documentation, which are then applied automatically to recorded consumption. Factors are linked to meter and emission types and to geographies, so updates are handled in one central place. Sources can be attached as documentation.
Want to see how emission factors are handled in Enity EMS? Book a demo and we will show you how it works with your own data.
GHG Protocol
The GHG Protocol (Greenhouse Gas Protocol) is the most widely used international standard for how companies measure, calculate and report their greenhouse gas emissions.
The GHG Protocol (Greenhouse Gas Protocol) is the most widely used international standard for how companies and organisations measure, calculate and report their greenhouse gas emissions. It acts as the “accounting rules” for climate data, and more than 90% of the world’s largest companies use it.
What does the GHG Protocol cover?
How emissions are calculated
Which types of data can be used
How quality and documentation are handled
How emissions are categorised and reported
The GHG Protocol is also where the split into scope 1, 2 and 3 comes from. It ensures that emissions are allocated by source, so carbon accounting is consistent and comparable.
Which gases are covered?
The GHG Protocol covers the seven greenhouse gases defined in the Kyoto Protocol. They are converted to CO2e so they can be added up. Other gases with a climate impact, such as certain refrigerants, must be recorded and reported separately, outside the scopes.
Location-based and market-based
The GHG Protocol requires electricity-related emissions to be reported in two ways: location-based and market-based. Both figures must be included, also under CSRD.
The GHG Protocol in Enity EMS
The carbon accounting module in Enity EMS is built on the GHG Protocol. It covers scope 1, 2 and relevant scope 3 categories, distinguishes between location-based and market-based emissions, and can apply multiple scope values per resource type.
Want to see carbon accounting built on the GHG Protocol? Book a demo and we will show you how it works with your own data.
Scope 1, 2 and 3
Scope 1, 2 and 3 is how the GHG Protocol groups emissions: direct emissions, emissions from purchased energy and all other emissions in the value chain.
Scope 1, 2 and 3 is the way the GHG Protocol categorises greenhouse gas emissions. It is the backbone of any carbon accounts, because it makes accounts comparable and prevents double counting.
Scope 1: Direct emissions
Emissions from sources the organisation owns or controls, such as burning natural gas or oil in its own boilers, fuel used in company vehicles and process emissions from production.
Scope 2: Purchased energy
Emissions from energy the organisation buys but that is generated elsewhere: electricity, district heating, district cooling and steam. The GHG Protocol requires electricity to be reported both location-based (average grid mix) and market-based (based on contracts and guarantees of origin).
Scope 3: The value chain
All other indirect emissions before and after the organisation’s own activities, such as purchased goods, transport, waste, employee commuting, business travel and use of sold products. Scope 3 often makes up 80 to 99% of total emissions, but it is also the hardest to measure accurately.
Scope depends on perspective
The same activity can sit in different scopes depending on who is reporting. Power generation is scope 1 for the utility, but scope 2 for the customer.
Scope 1 is what you emit yourself
Scope 2 is the energy you buy
Scope 3 is everything that happens in the value chain around you
How Enity EMS handles scopes
Enity EMS links consumption data to the right scopes and emission factors, so you can track scope 1, 2 and relevant scope 3 categories on the same data foundation, with both location-based and market-based figures.
Want to see your scope 1, 2 and 3 emissions in one place? Book a demo and we will show you how it works with your own data.
CO2e (CO2 equivalents)
CO2e is a common unit that converts different greenhouse gases into the amount of CO2 that would have the same warming effect on the climate.
CO2e stands for carbon dioxide equivalents. It is a common unit that makes it possible to add up different greenhouse gases by converting them into the amount of CO2 with the same warming effect.
Why use CO2e instead of CO2?
Proper carbon accounting covers more greenhouse gases than CO2. Some gases, such as methane and nitrous oxide, have a far stronger warming effect per kilogram than CO2. Converting everything to CO2e lets you compare and sum emissions in a single figure.
Which gases are included?
The GHG Protocol covers the seven greenhouse gases defined in the Kyoto Protocol:
Carbon dioxide (CO2)
Methane (CH4)
Nitrous oxide (N2O)
Hydrofluorocarbons (HFCs)
Perfluorocarbons (PFCs)
Sulphur hexafluoride (SF6)
Nitrogen trifluoride (NF3)
CO2e in practice
Emission factors are usually stated in CO2e per unit, for example grams of CO2e per kWh of electricity or kilograms of CO2e per litre of diesel. Multiply consumption by the emission factor and you get emissions directly in CO2e.
How Enity EMS calculates CO2e
Enity EMS applies documented emission factors to your recorded consumption and automatically calculates emissions in CO2e across scope 1, 2 and 3. You can also add your own emission factors with supporting documentation.
Want to see how your consumption translates into CO2e? Book a demo and we will show you how it works with your own data.
Carbon accounting
Carbon accounting measures an organisation’s total greenhouse gas emissions, split into scope 1, 2 and 3. It is the data foundation for climate targets and reporting.
Carbon accounting measures an organisation’s total greenhouse gas emissions. It is the technical and analytical foundation for climate work and answers one question: How large is our carbon footprint, and where does it come from?
How is carbon accounting calculated?
The principle is simple: activity data × emission factor = emissions. Activity data, such as kWh of electricity, litres of diesel or money spent on purchases, is multiplied by an emission factor and converted to CO2e. Most organisations follow the GHG Protocol, which also defines the split into scope 1, 2 and 3.
Carbon accounting, ESG and CSRD
Carbon accounting is the measurement
ESG is a broad reporting framework, where climate data is one part
CSRD is the EU legal framework for sustainability reporting
In short: carbon accounting provides the numbers. Reports tell the story. CSRD sets the rules.
What is carbon accounting used for?
Identifying the largest sources of emissions
Prioritising reductions and setting climate targets
Documenting progress
Answering requests from customers, banks and investors
Providing the data foundation for ESG and CSRD reporting
How Enity EMS handles carbon accounting
Enity EMS builds your carbon accounts directly on the consumption data already collected for energy management. The result is continuously updated, traceable accounts with location-based and market-based emissions, documented emission factors and a built-in CSRD format.
Frequently asked questions
What is carbon accounting, and why does it matter?
Carbon accounting measures an organisation’s greenhouse gas emissions, split into scope 1, 2 and 3 according to the GHG Protocol. Our carbon accounting module is built directly on this protocol and covers all three scopes, so you can document your climate impact without piecing together data from several systems.
