Grid Emission Factors: What are they and why do they matter?

Business leaders looking at their sustainability challenges should be setting targets for becoming less carbon-intensive. Part of the challenge with setting these targets is establishing a baseline, setting goals and targets, and then measuring future performance against the reduction targets that have been set. 

Grid Emission Factors (GEF) play a key role in this exercise, but what exactly is a grid emissions factor and why should businesses care about them? Let’s start by looking at emissions factors in general.

Emissions factors make it easy to convert activity into carbon, enabling us to simply multiply the emissions factor by the activity volume to get to the unit of mass of the pollutant (carbon). 

For example:

• The emissions factor for an average car with unknown fuel is 0.04508 kg of CO2e per km (BEIS 2022).
• Landfilled disposal of organic waste has an emissions factor of 445.72819 kg of CO2e per tonne (BEIS 2022).

When it comes to grid emission factors, these are measures of the amount of carbon emissions for each unit of electricity that is generated. This factor is the key to converting the energy consumed by your business into an amount of carbon that it is responsible for. 

The GEF will be calculated each year, taking into account; the mix of electricity generation types over the period (renewable/gas/nuclear/coal etc) as well as the weather, fuel prices and the availability and demand for that electricity. It sounds complicated, but as the GEF is published each year, all you need to do is find the relevant data point for your business’s territory (as each country and therefore each country’s grid will have a different emissions factor).

Why are grid emission factors important? 

Grid Emission factors help a business to convert activity (in this case electricity consumption) into a measurable equivalent in carbon. Understanding these emissions factors will help you to: 

Location-based or market-based data? 

There are two ways that the GEF data is collated; location-based and market-based. Location-based is the main type of emission factor used and is more generic, whilst market-based is more specific. Both types are easy to find and use, as we’ll discover below. 

Location-based 

Location-based GEF looks at the average emissions of the power grid in your area. Each source of electricity is covered and the GEF tells you how much CO2 has been created. A location-based emission factor is expressed as kgCO2/kWH which is the emissions from the electricity generation to the grid, divided by the energy generated. 

Within location-based GEFs, three separate types could be used, depending on how specific you need to be. 

National Grid-average emission factors

The grid-average (generation) mix is the total amount of emissions from electricity that is supplied through the grid, divided by the total amount of the energy provided. The UK BEIS is the UK publisher of these factors, other countries will have their own agency to publish them such as the US EPA. 

For the rest of Europe, the production mix is published by the AIB, however, they do not include imports and exports. As the UK GEF does include imports and exports, drawing comparisons should be done with caution and only used on a like-for-like basis if the official GEF is not available. 

Subnational Grid-average emission factors 

The subnational grid average is based on the emissions created through electricity supplied to a localised area. Businesses within a subnational grid area should use these emission factors for their reporting. If these are unavailable, then they can use the national grid factors. 

Direct Line emission factors 

If a business has its own on-site generation or gets its power directly from a power plant, rather than going through a local or national grid, then these emission factors should be used in the reporting.

Market-based 

Market-based GEFs take a closer look at your energy contracts. They consider the exact mix of electricity sources you’re paying for, giving you a more tailored picture of your footprint.

The Greenhouse Gas Protocol (GHGP) asks corporations to report emissions under both market-based and location-based approaches to ensure a full picture is seen. If a business doesn’t have the information needed for a certain supply, the residual mix factor is used instead. 

With a market-based approach, five sources of evidence need to be provided and these are ranked in terms of importance.  

Energy attribute certificates (EAC)

If a business has bought EACs like REGOs and RECs, it should apply this emission factor to the electricity purchases covered by the EAC. All information needed to declare this will be found on the EAC. 

Specific supply contracts

Supply contracts will often contain a fuel mix specific to that contract, meaning emissions factors will be more specific. Where only a fuel mix is provided, the emission factor can be estimated from that information. 

Supplier rates

If there is no contracted fuel mix, then the supplier’s residual or total fuel mix/emission factor should be used. 

Country/region residual mix

These factors will be left over after all other claims have been made using the above options. The residual factor will often be higher as this will account for gas and coal fuels. It also includes the import and export of energy covered by EACs and the import and export of the actual energy used. These are calculated and published by national government agencies. 

Location-based 

Location-based reporting is the way forward if you do not have any of the above data. 

Where to find the GEF data and why is it needed? 

Finding the data is simple. For the UK, the BEIS homepage, the IEA and the GHG Protocol website all have the relevant GEF data that would be relevant for your business. 

Businesses that include the GEF data when compiling their yearly sustainability reports can keep track of their progress towards clean energy goals. 

Grid emission factor trends

In the UK, emissions from electricity generation have steadily declined over the last 15 years, dropping from 0.499 kgCO2e/kWh in 2010 to 0.151 kgCO2e/kWh in 2023, a reduction of around 70%. This has been driven by an increase of low carbon generation onto the grid mix and much less carbon-intensive generation sources such as coal. 

Whilst these changes have driven down the GEF, the UK GEF needs to get to 0.001 kgCO2ekWh to meet the 2050 net-zero targets. This is a 99.4% reduction from 2023 levels and demonstrates the scale of the task ahead.

Summary

Grid emission factors play a vital role in helping your business draw a line between activity and carbon intensity of business operations. Understanding them can help you to prioritise where energy efficiency investments are best made. They can help ensure that your company’s sustainability strategy positively changes the business’s environmental impact, appeals to investors, hits ESG targets and provides full transparency when completing efficiency and sustainability reports. 

To better understand how grid emission factors can help your business hit its sustainability targets, speak to our energy management experts.