The Challenges of the Existing Policy Context for GHG Reporting
Over the last twenty years, the practice of carbon accounting has emerged as an important component of fighting climate change. The question has been, “How many emissions is an entity responsible for and what can be done to reduce those emissions?” In that statement, an “entity” could be an individual, a household, a business, a school, a government, a non-profit, a utility, a city, a state, a nation, a world, or more. The practice of quantifying the emissions an entity is responsible for has led to questions of boundaries, levels of direct responsibility vs. influence, methods, and standards.
Within the world of financial accounting, there is a set of Generally Accepted Accounting Principles (GAAP) that represent a common set of accounting rules, standards, and procedures that are set by the Financial Accounting Standards Board (FASB) and that public companies in the US must follow when reporting their financial statements. It is recognized that something similar is needed for carbon accounting.
There is a set of existing protocols and methods that make up the backbone of carbon accounting standards today that has been developed by several international non-governmental organizations (NGOs), such as the World Resources Institute among others. Within the next sections of this Appendix there will be links included to access this guidance as well as call out boxes explaining how this relates to EWEB. These standards often provide a tiered hierarchy of methods and emissions factors to use in an entity’s carbon accounting practice, depending on the given circumstances and available data for the context in which it is being used. Because these international NGOs are trying to provide guidance that can be fit to a wide variety of entities, situations, contexts, and geographic locations, it is difficult to make a one-size fits all set of standards and guidance. As a result, many entities (including EWEB) have GHG accounting protocols that are informed by multiple international NGO’s.
The United States lacks a comprehensive system specifically designed for GHG emissions accounting and data tracking. Throughout its history, electricity has been traded as a commodity without differentiating one MWH from another based on any characteristics. As carbon accounting has grown and developed, consumers increasingly want to differentiate a MWH with a high emissions profile from another MWH that was generated by zero-carbon resources. In the United States, in the absence of comprehensive national climate accounting standards or legislation, individual states have been left to build their own laws, policies, reporting requirements, and accounting methods, or to do nothing. This has led to a patchwork of practices across the Western Electricity Coordinating Council (WECC) that makes up the western electricity grid. Across the US WECC today there are:
- State-specific programs dedicated to market development of new renewable energy, including Renewable Portfolio Standards and clean energy targets. These programs are often focused on incentivizing the development of new renewable resources, which has led to tracking some qualifying low/zero-carbon electricity production, but not all. For example, legacy hydro power is often excluded as a RPS qualifying resource, but Oregon RPS does provide an exemption which reduces RPS targets based on energy received from legacy hydro from BPA.
- State-specific programs dedicated to electricity fuel-mix disclosure. Only some of these programs require that emissions rates be included.
- Mandatory GHG Emissions Reporting Programs that apply to entities in the West. Some of these are federal while others are state-specific. Some of them require reporting of only direct emissions sources while other require reporting of both direct and indirect emissions. Some are specifically focused on the electricity sector and others are economy-wide. Some have mandatory reduction targets, and some include a cap-and-trade program.
- Voluntary utility and electricity consumer GHG reporting and commitments. Many utilities, like EWEB, have made voluntary commitments and voluntarily disclose GHG emissions inventories annually based on existing reporting frameworks and protocols.
The contractual path of electricity tracking doesn’t always match the physical flow of energy. In addition to the patchwork of federal and state, as well as mandatory and voluntary programs mentioned above, there is the added challenge that electricity has been managed by both a contractual path that tracks the ownership of a MWH of electricity by contract or financial ownership, and the physical flow of electricity on the transmission system. The contractual and the physical pathways sometimes diverge in ways that contribute to difficulty in calculating which generation source produced the electricity that flows into EWEB’s service territory and who gets to claim the environmental attributes or “low-carbon-ness” of renewable electricity generation owned by the utility.
Links and Relevant Resources:
Explore this webpage: Common Protocols and Resources for GHG Reporting | Relevant Emissions Factors
Common Protocols and Resources for GHG Reporting
Since the late 90s/early 2000’s, several protocols, tools, resources, and guidance documents have been developed to support carbon accounting at different levels and for different industries or contexts. Many are complementary and build off one another.
The most common resources utilized in the United States are linked here. The links included in this section are not comprehensive but are provided to give EWEB customers and community members an easy way to find resources that could fit their reporting and disclosure needs.
Resources included:
- World Resources Institute
- The GHG Protocol Corporate Accounting and Reporting Standard
- The Scope 2 Guidance
- The Corporate Value Chain (Scope 3) Accounting and Reporting Standard
- The GHG Project Protocol
- The Climate Registry
- The Climate Registry’s General Reporting Protocol
- The Climate Registry’s Local Government Operations Protocol
- The Climate Registry’s Electric Power Sector Protocol
- The Climate Registry’s Default Emissions Factors (updated annually)
- CDP - formerly called the Carbon Disclosure Project, is an environmental disclosure system that was created on behalf of investors to document environmental risks, opportunities, and leadership that could impact an organization’s financial performance.
- The Task Force on Climate Related Financial Disclosures
Why does this matter to EWEB?
EWEB currently reports its internal operations emissions in accordance with the World Resources Institute Greenhouse Gas Protocol, and The Climate Registry’s General Reporting Protocol. EWEB uses the World Resource Institute Scope 2 Guidance document to guide our calculations of Scope 2 emissions from purchased electricity. EWEB’s internal GHG inventory excludes emissions from Scope 1 direct emissions from electricity generating activities at this time. This is because EWEB separately reports our emissions associated with electricity generation to Oregon DEQ in accordance with requirements under DEQ’s GHG Reporting Program. Therefore, EWEB does not currently follow guidance published under The Climate Registry’s Electric Power Sector Protocol. We may choose to do this in addition to our DEQ reporting in the future.
In 2023, EWEB submitted our first response to CDP’s Supply Chain Climate Disclosure.
World Resources Institute (WRI) GHG Protocol
The World Resource Institute Greenhouse Gas Protocol is the de-facto international leader in GHG accounting and standard setting. It defined the types of gases that must be reported, and the Scopes of emissions that come from different types of business activities that have also become standard in GHG accounting nationally and internationally. See figure below.
WRI’s website describes its formation and offerings as follows:
“The Paris Agreement commits countries to reduce GHG emissions to keep the global temperature rise below 1.5 degrees C to avoid the worst impacts of climate change. GHG Protocol arose out of the need to help countries and companies account for, report, and mitigate emissions, based on a report that identified an action agenda to address climate change that included the need for standardized measurement of GHG emissions.
Greenhouse Gas Protocol provides accounting and reporting standards, sector guidance, calculation tools and trainings for businesses and local and national governments. It has created a comprehensive, global, standardized framework for measuring and managing emissions from private and public sector operations, value chains, products, cities, and policies to enable greenhouse gas reductions across the board.
WRI and the World Business Council on Sustainable Development (WBCSD) created the GHG Protocol as an international standard for corporate accounting and reporting emissions, categorizing greenhouse gasses into Scope 1, 2 and 3 based on the source. In 2016, 92% of Fortune 500 companies responding to the Climate Disclosure Project (CDP) used GHG Protocol directly or indirectly through a program based on GHG Protocol. GHG Protocol also provides webinars and e-learning courses on its standards and tools.”
Links and Relevant Resources:
- World Resources Institute GHG Protocol website
- The GHG Protocol Corporate Accounting and Reporting Standard provides requirements and guidance for companies and other organizations preparing a corporate-level GHG emissions inventory.
- The Scope 2 Guidance standardizes how corporations measure emissions from purchased or acquired electricity, steam, heat and cooling (called “scope 2 emissions”).
- The Corporate Value Chain (Scope 3) Accounting and Reporting Standard allows companies to assess their entire value chain emissions impact and identify where to focus reduction activities.
- The Project Protocol provides specific principles, concepts, and methods for quantifying and reporting GHG reductions—i.e., the decreases in GHG emissions, or increases in removals and/or storage—from climate change mitigation projects (GHG projects).
The Climate Registry
With protocols and guidance based on WRI’s GHG Protocol, The Climate Registry (TCR) provides North American entities a way to report and verify their emissions and therefore demonstrate their commitment to fighting climate change. TCR was created prior to many of the state regulations that required government and business GHG reporting and still allows for voluntary, standard-based, rigorous, and verified emissions reporting for all types of organizations whether they are located in a state with GHG reporting requirements or not.
TCR’s website describes its formation and offerings as follows:
“The Climate Registry (TCR) is a non-profit organization that empowers North American organizations to do more in the fight against climate change. We provide best-in-class services and tools that help companies, governments and institutions reduce their emissions.
Established in 2007, The Climate Registry was formed to continue the work of the California Climate Action Registry (CCAR). CCAR was developed by the State of California in 2001, to promote and protect businesses’ early actions to manage and reduce their greenhouse gas emissions. Recognizing that climate change is a global issue and success in emissions reporting must be based on consistent data in an integrated system that stretched beyond California’s borders, The Climate Registry was established to expand CCAR’s emissions reporting work to include all of North America.”
The Figure above, pulled from The Climate Registry’s Electric Power Sector Protocol, provides additional guidance, beyond the 3 Scope definitions provided by the World Resources Institute GHG Protocol that is specific for Electric Utilities.
Why does this matter to EWEB?
EWEB does not currently report its emissions in accordance with The Climate Registry’s Electric Power Sector Protocol. Instead, EWEB reports its emissions associated with electricity generation to the Oregon Department of Environmental Quality’s Greenhouse Gas Reporting Program and DEQ publishes a carbon intensity metric for EWEB customers to use when calculating their carbon footprints from purchased EWEB electricity.
Based on the Electric Power Sector Protocol’s Table 5.1 excerpted above, EWEB is considered an “Other Generator”, a “Transmission Company”, a “Local Distribution Company” and a “Retail Provider”.
Links and Relevant Resources:
- The Climate Registry’s Website
- The Climate Registry’s Protocol Documents page. Includes links to:
- The Climate Registry’s General Reporting Protocol
- The Climate Registry’s Local Government Operations Protocol
- The Climate Registry’s Electric Power Sector Protocol
- The Climate Registry’s Default Emissions Factors (updated annually)
CDP, formerly called the Carbon Disclosure Project, is an environmental disclosure system that was created on behalf of investors to document environmental risks, opportunities, and leadership that could impact an organization’s financial performance. It has expanded to government entities and now includes disclosures on climate, water, and forestry. As of March 2022, more than 680 financial institutions with US$130+ trillion in assets call on nearly 10,400 companies to disclose environmental data through CDP. CDP’s disclosure platform is in alignment with the Task Force on Climate-Related Financial Disclosures, launched in 2017. CDP’s Climate questionnaire asks reporting entities to disclose its GHG emissions and asks which reporting protocol is being used for the disclosure process. Both WRI’s GHG Protocol and The Climate Registry’s General Reporting Protocols, among others, are accepted for this disclosure. Reporting entities receive scores on their disclosures, thus incentivizing action and driving change. CDP’s website describes its formation and offerings as follows:
“Founded in 2000, CDP was the first platform to leverage investor pressure to influence corporate disclosure on environmental impact. Now with the world’s largest, most comprehensive dataset on environmental action, the insights that CDP holds empowers investors, companies, cities, and national and regional governments to make the right choices today to build a thriving economy that works for people and planet in the long term.”
Why does this matter to EWEB?
In 2023, a large industrial customer requested that EWEB complete CDP’s Supply Chain Climate Questionnaire. This was EWEB’s first CDP disclosure.
Links and Relevant Resources:
- CDP
- Task Force on Climate-related Financial Disclosures. The Financial Stability Board created the Task Force on Climate-related Financial Disclosures (TCFD) to improve and increase reporting of climate-related financial information.
Relevant Emissions Factors
EWEB recognizes that entities within our service area may have questions about which emissions factors they should use in their own GHG calculations when they buy electricity from EWEB. In this section of the Guidebook, EWEB seeks to provide access to information and emissions factors available for this work.
Please Note: This section is intended for GHG accounting professionals engaged in technical analysis on behalf of their organizations. The resources provided are not exhaustive. EWEB recognizes that other resources may be appropriate to use in different contexts. EWEB is not responsible for misuse of this information, nor is EWEB responsible for updating emissions factors at the source locations included in this section. EWEB provides the links/references here only as a service to our customers to support their decarbonization efforts.
Several potential use-cases are included in this section of the report, including guidance and resources for:
- Entities seeking emissions factors for calculating Scope 2 emissions from purchased EWEB electricity.
- Entities seeking to estimate emission reduction benefits from energy efficiency & clean energy projects.
- Entities seeking to estimate the GHG impact of transportation electrification projects and potential credit generation under the Oregon Clean Fuels program.
Resources for Entities Seeking Emissions Factors for Scope 2 GHG Calculations from Purchased EWEB Electricity
Often, the first step in determining the appropriate emissions factor to use in calculating Scope 2 emissions from purchased electricity is to follow the guidance offered in Chapter 6 of the World Resources Institute Scope 2 Guidance Document (see link below) to determine if your organization will be reporting using the location-based method or the market-based method.
How does this Decision-Tree relate to EWEB?
As can be seen in the excerpted decision tree from Chapter 6 of WRI’s Scope 2 Guidance document, the answer to the first question is yes for EWEB’s customers. Oregon DEQ calculates supplier emissions rates by utility provider. Therefore, for most EWEB customers, the guidance recommends reporting Scope 2 emissions using both the location-based and the market-based methods.
Continuing in the decision tree under the market-based scope 2, it asks if the supplier-specific data meets the Scope 2 quality criteria listed in Table 6.3. For EWEB’s DEQ utility-specific emissions factor, the answer to this question is also yes.
In EWEB’s internal GHG inventory, we report our emissions using both the Location-Based Method and the Market-Based Method. Progress towards EWEB’s internal emissions reduction goals is usually tracked using the Market-Based Method.
Continuing in Chapter 6 of the World Resources Institute Scope 2 Guidance Document (see link below), the guidance provides a hierarchy of data sources that can be used to calculate both the Location-Based and the Market-Based methods. Excerpted below is the location-based method emissions factor hierarchy. As can be seen, the eGRID regional total output emissions rate is considered more precise than using a national emissions factor. This resource is linked below.
For the Market-based method emissions factor hierarchy from Chapter 6 (Table 6.3), Oregon DEQ’s EWEB-specific GHG Reporting Program emissions factor would be considered a Supplier/Utility Emissions Rate. This resource is also linked below.
Links and Relevant Resources:
- WRI GHG Protocol Scope 2 Guidance for Market-Based vs. Location-Based Scope 2 accounting methods.
- US EPA Emissions & Generation Resource Integrated Database (eGRID) Home
- EPA eGRID’s regional Total Output Emissions Rate for the Northwest Power Pool (NWPP)
- Oregon DEQ’s Greenhouse Gas Reporting Program
- Oregon DEQ’s 2010-2022 Greenhouse Gas Emissions from Electricity Use.
- US EPA Green Power Partnership: Offsets and RECs – What’s the Difference?
Resources for Entities Seeking to Estimate Emissions Reduction Benefits from Energy Efficiency or Clean Energy Projects
Entities engaged in estimating the emissions reduction benefits from energy efficiency or clean energy projects may seek to understand the marginal or peak carbon reductions associated with their efforts. EPA eGRID database provides a different set of emissions factors for this use-case, called the Non-Baseload Emissions Rate. These Non-Baseload Emissions Rates are different from the EPA eGRID Total Output Emissions Rates that were referenced in the previous section.
US EPA recommends using non-baseload emissions factors when you estimate the carbon impacts of projects that reduce electricity emissions, like conservation or energy efficiency. However, the non-baseload emissions factors should NOT be used when calculating annual greenhouse gas inventories or carbon footprints. As described in the previous section, for calculating annual greenhouse gas inventories or carbon footprints, the EPA eGRID Total Output Emissions Rates are more appropriate.
Links and Relevant Resources:
Additional Notes and References:
This set of emissions factors is defined by EPA as follows:
“Non-baseload output emission rates were developed to provide an improvement over the fossil fuel output emission rates as an estimate of emission reduction benefits from energy efficiency and clean energy projects. Demand for electricity changes diurnally and seasonally. The term “baseload” refers to those plants that supply electricity to the grid when demand for electricity is low. Baseloaded plants are usually called upon to provide electricity to the grid no matter what the demand for electricity is during any given period of time, and generally operate continually except when undergoing routine or unscheduled maintenance.
Non-baseload emission rates are a slice of the system total mix, with a greater weight given to plants that operate coincident with peak demand for electricity. In eGRID, the capacity factor of each plant is used as a surrogate for determining whether a plant is baseloaded and how much of each plant’s generation is considered to be non-baseloaded. Non-baseload emission rates are the output emission rates for plants that combust fuel and have capacity factors less than 0.8, weighted by generation and a percent of generation determined by capacity factor. The non-baseload emissions and generation include only emissions and generation from combustion sources and exclude emissions and generation from plants that have high capacity factors. The remaining emissions and generation are weighted by a factor which is a function of capacity factor. These data values are derived from plant level data and factor out baseload generation, which is generally unaffected by measures that affect marginal generation. This rate is the sum of the non-baseload emissions divided by the sum of non-baseload net generation, divided by a unit conversion factor.
In eGRID, these values are displayed beginning at the state aggregation level. eGRID subregion CO2 non-baseload output emission rates are the underlying data in EPA’s Greenhouse Gas Equivalencies Calculator since the results of the calculation is the potential amount of avoided CO2 emissions. These rates are also the underlying data for EPA’s Green Power Equivalency Calculator, which helps to translate a green power kWh purchase into more understandable everyday terms such as equivalencies to coal plant CO2 emissions or greenhouse gas emissions from passenger vehicles or CO2 emissions from electricity use in American homes, for example.[1]
While non-baseload emissions rates can be used to estimate the emissions reductions associated with projects that displace electricity generation, such as energy efficiency and/or renewable energy, these rates should not be used for assigning an emission value for electricity use in carbon-footprinting exercises or GHG emissions inventory efforts. Rather, eGRID subregion-level total output emission rates are recommended for estimating emissions associated with electricity use (scope 2 emissions).[2] “
[1] https://www3.epa.gov/ttnchie1/conference/ei18/session5/rothschild.pdf
[2] eGRID Technical Guide: https://www.epa.gov/system/files/documents/2022-01/egrid2020_technical_guide.pdf
Resources for Entities Seeking to Estimate the GHG Impact of Transportation Electrification Projects and Potential Credit Generation Under the Oregon Clean Fuels Program
Entities engaged in transportation electrification or other types of transportation related fuel-switching to lower carbon fuels may be interested in estimating the carbon impact of their project or the potential for credit generation under the Oregon Clean Fuels Program.
In this case, Oregon DEQ calculates a lifecycle utility-specific emissions factor for utility providers in the state that is based on the total output emissions rate calculated under the Oregon DEQ GHG Reporting Program but includes upstream emissions from fuel feedstocks procurement, fuel manufacturing and transportation of finished product to the point of consumption. This is sometimes known as a well-to-wheels lifecycle analysis.
Note: Please note that even though the Oregon Clean Fuels emissions factors are based on the emissions factors calculated as part of the DEQ GHG Reporting Program (discussed above), the years of emissions factors don’t match between the two programs. There is a 2-year lag in calculations. For example, the 2023 Clean Fuels Program emissions factor is calculated based on the 2021 GHG Reporting Program Emissions Factors.
Regulated entities include transportation fuel producers and importers of fossil gasoline, fossil diesel, ethanol, biodiesel, and renewable diesel. They are required to meet the declining carbon intensity cap for the fuels they sell. One way to meet the program requirements is to purchase credits from entities that generate credits by developing low-carbon transportation fuels. Credits are measured in metric tons of GHGs. Credits can be sold to regulated entities, which in turn produces revenue to pay for projects that lower GHGs.
For credit generators, the credits flow to the following entities[1]:
- For compressed natural gas (CNG), liquified natural gas (LNG), and liquified petroleum gas (LPG), the credits flow to the owner of the dispenser.
- For renewable natural gas (RNG), propane, and jet fuel, the credits flow to the producer or importer.
- For electricity:
- For fixed light rail, streetcars, aerial trams, buses, credits flow to the transit agency.
- For forklifts, the credit flows to the forklift owner.
- For residential EV charging, the credits flow to the electric utility.
- For non-residential EV charging, credits flow to the charger owner or the operator if the owner does not register.
- For transportation refrigeration units, credits flow to the owner of the refrigeration unit.
- For cargo handling equipment, credits flow to the owner of the charging equipment.
- For ocean-going vessels, credits flow to the owner of the equipment that provides electrical power from the shore.
- For ground-support equipment, credits flow to the owner of the charging equipment.
- For hydrogen, credits flow to the owner of the fuel.
- For alternative or sustainable jet fuel (SAF), credits flow to the fuel producer or importer.
[1] Oregon Clean Fuels Program Overview: Department of Environmental Quality: Clean Fuels Program Overview
Links and Relevant Resources:
- OR Clean Fuels Program Electricity Guidance Documents
- OR DEQ Clean Fuels Program Electricity Carbon Intensity Values for 2023.
- OR Clean Fuels Program Fuel Pathways – Carbon Intensity Values
- OR Clean Fuels Program - Current List of Carbon Intensity Values
- Guidance on Utility-Specific Electricity Carbon Intensity Calculations in GREET
- OR Clean Fuels Credit Estimator. Excel spreadsheet to estimate expected credits.
