The Cozero category Purchased heat, steam & cooling (Scope 2) covers emissions from steam, heat, and cooling energy systems that are purchased and consumed within the operations of the reporting company, including emissions from district heating and cooling. This includes activities that relate to:
Heat: In both commercial and industrial settings, heat is essential for maintaining indoor comfort and heating water for various purposes. Many industrial operations also rely on heat for specific equipment and processes. This heat can be generated through different means, including electrical methods or non-electrical processes such as solar thermal heat or thermal combustion processes. Often this is located outside a company's operational control, like in a boiler or thermal power plant.
Steam: Created when water is brought to its boiling point. It is a valuable source of energy, particularly in industrial processes. Steam is used for performing mechanical work, providing heat, or as a process medium in industrial production.
Cooling: Similar to heat, cooling may be produced from electricity or through the distribution of cooled air or water.
1) How this category aligns with carbon accounting standards
The Cozero category, Purchased heat, steam & cooling, is a source of Scope 2 emissions, as defined by the GHG Protocol. All Cozero emissions calculation methodologies follow the requirements for this Scope of emissions accounting. Emissions from “Purchased electricity” also fall into Scope 2, but represent a separate Cozero category.
The GHG Protocol Corporate Standard
The GHG Protocol Corporate Standard
The GHG Protocol Corporate Standard is an internationally-recognized go-to standard for estimating and reporting corporate GHG emissions. GHG emissions are categorized into three ‘Scopes'. For further information see here.
Scope 1 includes direct GHG emissions that originate from sources that are owned or controlled by the reporting company, e.g. generation of electricity, heat and steam, physical or chemical processing, transportation of materials and fugitive emissions. They are the most important source of emissions because they are the direct result of companies’ activities.
Scope 2 encompasses indirect emissions from the generation of purchased or acquired energy consumed by the reporting company. These emissions are considered to be indirect because they arise as a result of the reporting company’s activities, but they originate from sources that are owned and controlled by external entities.
In turn, these emissions are categorized as Scope 1 for the generator that produced the energy, given that they arise from their owned and controlled resources.
Other upstream emissions associated with the transmission and distribution of energy within a grid are included in Scope 3.
2) Calculation methods
Here are the various calculation methods available in Cozero Log for calculating Scope 2 emissions from Purchased heat, steam & cooling. Please find more information in the article on Purchased electricity. Users should choose the method that is the most appropriate to the data available to them, to their business goals and the significance of the emissions of the category.
2a. Market-based method
This method quantifies emissions based on the emissions emitted by the energy producer from which the user contractually purchases energy. Under this method, a company uses the emission factor associated with the contractual instruments owned. Note that these should adhere to the quality criteria as stated in the GHG Scope 2 Standard. If these contracts are not available or the instruments do not meet the quality criteria, then regional emission factors representing the residual mix are used.
For more information on this method, including contractual instruments and calculation hierarchy, please refer to the article on the Market-based method.
Activity data: quantity of energy purchased in kWh. Cozero Log provides conversion for other units (e.g. MWh).
Emission factor: derived from the contractual instruments that meet Scope 2 quality criteria, or in the absence of contractual instruments, the local residual or grid-mix.
How to report emissions in Cozero?
Step 1: Select the Log called “Purchased heat, steam & cooling”
Step 2: Select the subcategory (type of energy) you want to report on
Step 3: Select “Electricity consumption: Market-based” as calculation method
Step 4: Select the correct activity that best represents your contractual instruments
Step 5: Enter the amount of electricity consumed
Step 6: Select the appropriate country of sourcing
Cozero Log will automatically calculate the emissions for the quantity of electricity entered as well as Scope 3 emissions from upstream impacts and T&D losses.
2b. Location-based method
This method quantifies emissions based on average energy generation emission factors for defined geographic locations, within local, subnational or national boundaries.
Activity data: quantity of electricity purchased in kWh. Cozero Log provides conversion for other units (e.g. MWh).
Emission factor: grid emission factors represent the average emissions from energy generation occurring within a defined geographic area and a defined time period (grid-mix).
How to report emissions in Cozero?
Step 1: Select the Log called “Purchased heat, steam & cooling”
Step 2: Select the subcategory (type of energy) you want to report on
Step 3: Select either “Electricity consumption: Grid-mix”; “District heat consumption” or “District steam consumption” as calculation method
Step 4: Enter the amount of energy consumed
Step 5: Select the appropriate country of sourcing
Cozero Log will automatically calculate the emissions for the quantity of energy entered as well as Scope 3 upstream emissions from upstream impacts and T&D losses.
2c. Direct emissions input
Users can enter the amount of emissions in CO2 directly in the Log. Make sure of the accuracy of data used in this estimation
3) Modeled categories
In the category of Purchased electricity, there are additional emissions relating to the upstream impact from the electricity purchased and consumed. As a result, additional calculations are required. Cozero Log automatically calculates these emissions for your convenience, however it is important to understand the allocation of these emissions.
Upstream emissions of purchased electricity: Relating to the extraction, production, and transportation of fuels utilized in the generation of electricity, steam, heating, and cooling that is consumed by the reporting company.
Transmission & distribution losses: Generated electricity, steam, heating and cooling that is consumed / lost, as it passes through a T&D system.
4) Where can I find the relevant data?
Activity Data:
Utility bills or invoices usually sourced from accounting department, real estate department, operations managers or procurement team
Contractual instruments
4.1 Example invoices
Be sure to differentiate between a gas invoice (allocation facility fuel use, scope 1) and district heating (scope 2, purchased heat).
To find out more about data collection, you can refer to the article about Data Sourcing.