by Markus Benter-Lynch
More and more organisations are committing to becoming net zero carbon. However, the level of expertise and resources at the disposal of organisations seeking to become net zero carbon varies widely. This article provides some practical suggestions for organisations with complex carbon footprints, such as local councils and manufacturing businesses, but with limited resources, to develop a robust decarbonisation plan.
The article is focused on reducing organisational emissions. It doesn’t address reducing embodied carbon emissions beyond the requirements of ISO 14064-1:2018 (“Specification with guidance at the organisational level for quantification and reporting of greenhouse gas emissions and removals”).
Background
The process of becoming net zero carbon can be summarised as follows:
Figure 1: The process of becoming net zero carbon
As per the diagram above, it is not a linear process but better envisaged as circular. That’s because it requires a long term (multi-year) plan which will need to be reviewed and updated over time, ensuring organisational changes, technology changes, stakeholder expectations and the impact of emission reduction and offsetting already implemented are all taken into account for each review.
This article provide some practical comments on steps 1 to 3 that are based on experience from helping organisations along this journey.
Measure emissions
The preparation of a carbon inventory involves determining the quantity of a resource that’s leading to GHG emissions, such as the quantity of electricity used or the quantity of vehicle fuel used and then multiplying these quantities with relevant ‘emission factors’. The point here is that:
- The bulk of the work is obtaining the quantities of these resources, e.g. by obtaining this information from suppliers;
- Obtaining the above data is not technically challenging and can usually be done inhouse with minimal guidance from specialists.
Once this data has been compiled, identifying the relevant emission factor and multiplying it with the quantity of the resource used does perhaps not appear simple to anyone who hasn’t done this before but it is not time consuming for a carbon reduction specialist (wastewater emission factors being one of the exceptions). Therefore, if your budget is tight, undertake as much of the time-consuming work (step 1 above) inhouse, with some guidance from a carbon emission reduction specialist as required, and only engage an external specialist for calculating the footprint on the basis of this data.
As carbon accounting will sooner or later become another standard business process, you may want to identify someone inhouse to develop the skills necessary for preparing a carbon footprint, at least for the majority of the emissions, and engage the external carbon reduction specialist not just for preparing the footprint but also to provide training. Also, there are now some good guidelines and templates available in Australia (Technical Guidance Manual) and NZ (Measuring Emissions: 2020 Quick Guide).
Once a carbon footprint has been prepared, it can be independently audited and certified. It pays to shop around for these services. There are numerous options available in the market for both audits and certification, some of which are a lot more costly than others, with quality not necessarily linked to price.
Identify emission reduction options
There are numerous ways to identify potential emission reduction initiatives. Brainstorming potential options through staff workshops with staff from all levels for a given part of the business works well, generates buy-in and is the most cost-effective options as it is quick and accesses staff knowledge of the operation. For this process to work well, it is important to create a save environment where all participants feel comfortable to contribute their ideas. Investing in an external facilitator with decarbonization expertise is worthwhile. The output of this step is a longlist of potential options.
Develop decarbonisation and offset plan
Screening
The most cost-effective way to identify the best ideas from a longlist is to screen the ideas before evaluating selected ideas further. With a small number of experienced staff and a carbon reduction expert, this screening exercise can be completed easily and quickly. Without much effort, ideas can be sorted into one of three groups:
- Likely: Ideas that are instantly recognized as meeting likely key criteria such as cost efficiency, practicality, risk etc – and those that have a good potential to meet these criteria;
- Maybe: Ideas that need a lot more investigation and thought before they can move into the first category above but aren’t instantly considered to be unlikely to meet key criteria;
- Unlikely: Ideas that are instantly recognized as unlikely to meet key criteria.
The output of this step is a shortlist of potential options (the ’Likely’ options).
As the carbon emission reduction plan is reviewed and the cycle outlined in Figure 1 above repeated, future screening should take ideas that were generated at previous brainstorm workshops – but didn’t make it onto the shortlist – into account: technology developments, operational changes and stakeholder expectations may make some of these ideas feasible in the future.
Detailed evaluation and ranking (marginal abatement cost analysis)
Before the shortlisted ideas are evaluated further it is important to agree the criteria on the basis of which they will be compared and ranked. This can include cost, risk, practicality, climate change adaptation benefits, staff well-being etc. While ideally a multi-criteria analysis approach would be used, it may suffice, especially for the first iteration of an organisation’s decarbonisation plan, to focus on cost efficiency and consider other criteria less formally. Cost efficiency of decarbonisation initiatives is best assessed by using the net present value of the initiative compared to the amount of emissions reduced (over the initiative’s lifetime), expressed in $/t[CO2-e]. Note that this ratio needs to be based on the net additional costs and the net amount of emission reduced. I.e. the initiative needs to be compared to a business as usual situation.
For example, if an organisation considers replacing an existing petrol vehicle with an EV prior to the end of the life of the existing petrol vehicle, the upfront investment for the NPV calculation should be the cost of purchasing the EV less the value of the existing vehicle at the time of making the change.
Once the ratio (NPV over emissions avoided) has been calculated for each of the short-listed initiatives, they can be ranked. Plotting the $/t[CO2-e] values creates a marginal abatement cost curve. When this is done for the first time, there are usually options in the mix that are cost negative, i.e. ideas that have a positive NPV as they result in cost savings, e.g. due to fuel savings.
Unless a multi-criteria analysis has already been used above, the shortlisted ideas which have been ranked on the basis of their NPV compared to their likely impact on emission reduction, can now be investigated further with regards to how they compare against criteria other than cost.
Develop decarbonization plan
Once the ranking of the shortlisted options has been completed and the necessary investment and the amount of carbon that they will be avoid has been identified, their implementation over time can be planned. Usually, the cost negative options which require limited investment can be implemented as soon as practical while those ideas that require significant investment are scheduled for later implementation to allow for the required budget to be set aside.
There are usually several scenarios that can be considered – both with regards to which options are implemented and their timing. The emission reduction impact of these scenarios can then be compared to the anticipated future emissions of the organisation under a business-as-usual (BAU) scenario, taking potential business growth or otherwise into account. To illustrate the impact of different possible emission reduction plans, it is worthwhile identifying a few options for comparison to a BAU scenario, for example a conservative scenario (assuming limited implementation and slow progress), a likely scenario and an ambitious scenario (assuming an urgent approach to reducing emissions). To illustrate the differences of these scenarios, they can be plotted showing investment requirements and emission reductions over time – and the amount and cost of offsetting required to achieve net zero carbon. This information can then be used to discuss different options with senior management and governance and to develop a detailed emission reduction and offsetting plan, including proposed review cycles.
Markus Benter-Lynch (Dipl.-Ing., M.Eng.) is a sustainability, renewable energy and climate change specialist with over 20 years’ experience helping businesses and government agencies to reduce their environmental footprint and invest in low carbon solutions. Contact Markus via Linkedin.
