Emission factors are coefficients that quantify the emissions or removals of a gas per unit of activity or process, providing a simplified way to estimate GHG emissions. These factors are derived from a range of activities associated with the operational aspects of a business, such as fuel combustion, electricity use, waste management, and industrial processes.

For SMEs, the accurate calculation of GHG emissions is essential not only for reporting purposes but also for identifying significant areas of environmental impact and potential improvements. Emission factors enable businesses to estimate emissions based on easily measurable data, such as the amount of electricity consumed or miles driven by company vehicles. This is particularly useful for SMEs that may not have the resources to conduct direct emissions measurements.

1. Fuel Combustion: For SMEs using vehicles or machinery that burn fossil fuels, the emission factor might be expressed as kilograms of CO2 per gallon of diesel consumed. For instance, burning one gallon of diesel fuel typically emits about 10.21 kilograms of CO2.

2. Electricity Use: Electricity consumption is a common source of indirect emissions (Scope 2). Emission factors for electricity depend heavily on the regional energy mix and are expressed as kilograms of CO2 per kilowatt-hour of electricity used. For example, in a region heavily dependent on coal, the factor will be higher compared to areas utilizing more renewable sources.

3. Business Travel: Air travel emission factors are calculated per mile traveled and vary significantly based on the type of aircraft and the occupancy. For example, a short-haul flight might have an emission factor of approximately 0.2459 kilograms of CO2 per passenger kilometer.