The facts don’t lie. Carbon emissions are responsible for 81% Green House Gas emissions globally. Businesses take up the main part of this figure. By now your strategies to reduce your direct, Scope 1 emissions should be solidly in place. Reducing your indirect, Scope 2 emissions can prove to be even more challenging.
Scope 2 emissions: what & why
A short recap. Scope 1 emissions are those caused directly by a company’s activities. Scope 2 emissions, also known as indirect emissions, are mostly caused by energy generated off-site, and then acquired and consumed by a company. This energy, often in the form of electricity, is then used for everything from keeping the lights on to powering machinery and charging forklifts.
Almost 40% of global greenhouse gas emissions trace back to energy generation and half of that is used by commercial or industrial entities.
Depending on the nature of your business these Scope 2 emissions can add substantially to your business’ overall carbon footprint. Meanwhile, ever-tightening international and industry-regulations are shifting focus from Scope 1 to Scope 2 emissions.
Admittedly, reducing Scope 2 presents its own set of challenges. Still, generally companies have several options to choose from… or combine.
1. Produce your own clean energy
Generating renewable energy on-site is as straightforward as it sounds, though it may not be a practical or viable option for all companies. When it is, it often takes the form of distributed energy resources or DER’s. The most common being (rooftop) solar panels.
Currently still making up a relatively small percentage of energy generation, DER’s are showing substantial growth. Mostly due to lower technology costs, attractive government subsidies and stricter regulations. Plus, there is also the fact that they create a stronger energy resilience and that the energy itself comes at a lower cost.
2. Purchase clean energy
When unable or preferring not to generate your own renewable energy, you can decide to procure it. This may be as simple as selecting a provider that delivers energy from a renewable source like solar, wind and/or hydro power.
PPA or Power Purchase Agreements are the go to solution. Often referred to as Direct PPA’s, Corporate or Offsite PPA’s, these mostly long-term contracts also partially remove the risk of market-fluctuations and should provide continuity when subsidies are reduced/terminated.
3. The GO or REC option
For every MWh a clean/renewable energy-source puts on the grid, it receives 1 renewable energy credit. It can then sell this credit through guarantees of origin or GO’s (Europe), and renewable energy certificates or REC’s (Americas). Companies can buy these to offset an equivalent amount of their non-renewable energy consumption to attain carbon neutrality.
While this option sidesteps the need for all businesses to lower/halt their actual greenhouse gas emissions, it does provide a net decline in global carbon emissions. At present GO’s and REC’s remain a common method for companies to reduce the emissions they need to report.
4. Reduce your energy consumption
Straightforward and nothing new. The less energy you consume, the less you have to generate, purchase and/or offset. Evidently the pursuit for an ever higher energy efficiency long predates Scope emission considerations. Nevertheless, it aligns perfectly with Scope 2 goals and in some cases may revitalize the effort.
Recently this revitalization more often than not features IoT-solutions. Among other benefits they offer smart energy management, predictive maintenance, intelligent transportation, real-time tracking and monitoring, consequential energy savings for internal material handling equipment, … . All contributing to a reduction in energy consumed/auditable Scope 2 emissions.