ETS2: Calculating Your Emissions – A Guide for Logistics Professionals

Accurately calculating emissions is no longer just an environmental responsibility—it’s a strategic necessity. With ETS2 introducing a cost for carbon and CSRD driving demand for primary emissions data, logistics professionals must adopt standardized methodologies like those outlined in the GHG Protocol, ISO 14083, and the GLEC framework. Choosing the right calculation approach and collaborating with supply chain partners will be critical for meeting regulatory requirements, maintaining competitiveness, and driving meaningful CO2 reductions.

In the first article of this series, we described ETS2 and its impact on the logistics industry. Now, we delve into the crucial aspect of emissions calculation, providing a practical guide for logistics professionals navigating the complexities of CO2 reporting. Understanding these calculations is essential not only for environmental responsibility but also for meeting increasing regulatory demands and demonstrating a commitment to sustainability. Critically, as ETS2 introduces a price for carbon, accurate emissions calculations become indispensable for managing logistics costs.

CO2 101: GHG Protocol & Emission scopes

To effectively navigate emissions reporting and calculation, logistics professionals must first understand how greenhouse gas (GHG) emissions are categorized. The Greenhouse Gas Protocol (GHG Protocol) provides a standardized framework, classifying emissions into three scopes based on their source and level of control:

• Scope 1: Direct emissions from owned or controlled sources (e.g., fuel combustion in company-owned vehicles).
• Scope 2: Indirect emissions from the generation of purchased energy (e.g., electricity used in warehouses).
• Scope 3: All other indirect emissions that occur in the value chain of the reporting company. This is a broad category and the GHG Protocol further breaks it down into 15 distinct categories, where Category 4: Upstream transportation and distribution and Category 9: Downstream transportation and distribution are the main categories for transport buyers. As CSRD begins to roll out, it places increasing pressure on companies to report emissions with greater accuracy, emphasizing the use of primary data from their value chain partners. For logistics providers, this means that emissions calculations are no longer just about internal sustainability goals—they are becoming a key factor in maintaining business relationships and competitiveness. Understanding and implementing robust emissions tracking systems is now essential to meeting both regulatory demands and customer expectations.

CSRD Rollout: Shaping Data Transparency in Logistics

The Corporate Sustainability Reporting Directive (CSRD) is an EU directive requiring many companies to report on their sustainability performance, including GHG emissions, using a “double materiality” approach (impact on business and business’s impact on environment/society). It applies to large companies and listed SMEs (excluding micro-enterprises) meeting certain criteria.

Reporting begins in phases:

2025 for companies already under NFRD (reporting on 2024 data)

2026 for other large companies (reporting on 2025 data),

2027 for listed SMEs (reporting on 2026 data).

Critically, the CSRD emphasizes reporting emissions based on primary data from value chain partners, pushing companies to move beyond estimation. This means larger companies will need emissions data from their transportation providers, including smaller carriers. While smaller carriers may not be directly CSRD-regulated initially, they’ll need to provide this data to remain competitive as larger clients seek to comply. This focus on primary data will significantly impact transport buying and carrier relationships.

CO2 Calculation Basics: Methods Outlined in the GHG Protocol

The GHG Protocol outlines different calculation approaches, broadly categorized as:

• Spend-based method: Uses financial data (e.g., cost of fuel) multiplied by emission factors to estimate emissions. This method is often used for Scope 3 emissions when detailed activity data is unavailable.
• Activity-based method: This is the most common and generally preferred method. It involves collecting data on specific activities (e.g., kilometers driven, liters of fuel consumed) and multiplying it by relevant emission factors.⁸ This provides a more accurate picture of emissions.

Logistics Calculation Methods: Relevant GHG Protocol Categories

For logistics, the most relevant GHG Protocol categories are typically Scope 1 (direct emissions from owned vehicles), Scope 2 (emissions from electricity used in facilities), and, crucially, Scope 3 (emissions from transportation by third-party providers, upstream and downstream transportation, business travel, etc.).

Road transport is often the main source of emissions within logistics. Calculating road transport emissions usually involves determining fuel consumption and multiplying it by an emission factor. Several methods exist for determining fuel consumption:

• Fuel records: Tracking fuel purchases provides a direct measure of consumption.
• Telematics data: Modern vehicles often have telematics systems that provide detailed data on fuel consumption, mileage, and other operational parameters.⁹ This offers the most granular and accurate information.
• Estimated consumption: If direct data is unavailable, fuel consumption can be estimated based on vehicle type, load, distance travelled, and other factors. This method is less accurate but can be used for initial estimations or when data is scarce.

ISO 14083 and GLEC: Standardizing Emissions Calculation

To ensure consistency and comparability in emissions calculations, especially across the various methods described in the previous section, standards like ISO 14083 and the GLEC framework play a critical role.

ISO 14083: This standard specifies requirements for quantifying and reporting GHG emissions arising from transport operations. It provides a framework for consistent and comparable reporting. A critical element of this framework, and emissions calculations in general, is the use of emission factors. Emission factors are coefficients that quantify the amount of GHG emissions released per unit of activity (e.g., kg CO2e per liter of fuel consumed, or kg CO2e per kilometer driven). Accurate and relevant emission factors are essential for reliable emissions calculations. ISO 14083 emphasizes the importance of using appropriate emission factors and provides guidance on their selection and application.

Global Logistics Emissions Council (GLEC) Framework: This framework provides a standardized approach for calculating and reporting logistics emissions across different modes of transport. It aligns with the GHG Protocol and ISO 14083, offering detailed guidance and, importantly, a source of recommended emission factors. The GLEC framework compiles and updates emission factors for various transport modes, fuel types, and vehicle technologies, simplifying the process and promoting consistency. By providing a centralized and reliable source of emission factors, GLEC minimizes the variability in calculations that can arise from using different data sources.

Using these standards, particularly the emission factors provided by GLEC, ensures consistency and comparability in emissions reporting, facilitating benchmarking and collaboration across the industry. This standardization is crucial for creating a level playing field, enabling companies to track their progress over time, and comparing their performance against industry best practices. Without standardized emission factors, comparisons would be unreliable, hindering efforts to reduce emissions effectively.

Pros and Cons of Different Calculation Methods

Each calculation method has its strengths and weaknesses: