1. Measuring and Reporting Transport Emissions Nikolas Hill, Knowledge Leader – Transport Technology and Fuels, AEA Mandatory Carbon Reporting 2012 6 November, America Square Conference Centre, London nikolas.hill@aeat.co.uk +44 (0)870 190 6490

2. Introducing AEA  Global energy and climate change consultancy.  40+ years of experience working with Governments and businesses worldwide.  Specialists in a range of areas – transport, energy, environment, knowledge management.  Leading experts in emissions reporting. Production of the Defra/DECC conversion factors since their inception. Operation of the UK GHG emissions inventory for 30 years. Carbon footprinting and reporting for a diverse range of customers. Measuring and reporting GHG emissions from freight transport operations. Measuring and reporting GHG emissions from freight transport operations. 2

3. Setting the scene The role of transport in mandatory reporting Taking action – what are the challenges? Identifying transport emissions Determining emissions scope Collecting data Choosing emission factors Scope 3 emissions Benefits of reporting 3

4. Mandatory reporting and transport (1) What is required? Mandatory reporting of Scope 1 and 2 emissions: Some, but not all, transport emissions will be included. No geographical boundary: Not only UK emissions, overseas travel and transport operations are also included. 4

5. Mandatory reporting and transport (2) What are the implications?  Reporting on transport emissions may be new for many organisations.  Emissions reporting data will become publicly available and must be credible. Companies will need to:  Understand which transport emissions they are responsible for globally.  Identify which of these emissions they must report.  Collect data.  Calculate emissions and include results within their reporting. 5

6. Taking action – what are the challenges? Which emissions factors do I need? What scope do my emissions fall under? How do I collect data? What about vehicles operating overseas? How do I make sure I include all my emissions? 6

7. Sources of transport emissions Most organisations have a number of different transport emission sources associated with their operations. 7

8. Identifying all of your emissions sources 8

9. Determining scope Your company Scope 3 emissions Scope 1 and 2 emissions Owned vehicles Leased vehicles - financial/ operation control Business travel Staff commute Customer travel Leased vehicles – no financial/ operation control Supply chain Scope 1: Direct emissions from activities and sources you control – such as vehicles you own or operate. Scope 2: Energy indirect emissions from purchased electricity, heat, steam or cooling. Scope 3: Other indirect emissions which you influence but do not own or control. 9 Indirect emissions from fuel production

10. Treatment of leased vehicles Leased vehicles can fall under either Scope 1 or Scope 3. Operational control: The company is responsible for operating the vehicles. Financial control: The leased vehicles are treated as wholly owned assets for the purposes of financial accounting. Scope 1 Leased vehicles over which the company has operational or financial control. Included in mandatory reporting Scope 1 Leased vehicles over which the company has operational or financial control. Included in mandatory reporting Scope 3 Leased vehicles over which the company has neither operational nor financial control. Not included in mandatory reporting Scope 3 Leased vehicles over which the company has neither operational nor financial control. Not included in mandatory reporting 10

11. Allocation of emissions at an airport  There are a large number of transport emissions associated with airport operations.  Only some of these will be required for inclusion under mandatory reporting. Scope 1 Company-owned operational vehicles: Diesel Gas oil LPG Petrol Scope 1 Company-owned operational vehicles: Diesel Gas oil LPG Petrol Scope 3 Air traffic movements Business travel Staff commute Third party-owned operational vehicles Passenger transport Scope 3 Air traffic movements Business travel Staff commute Third party-owned operational vehicles Passenger transport 11

12. Collecting data  Availability of information varies between organisations.  Selection of data should be prioritised based on the level of accuracy that it provides. Where no data is available, using data on some-thing similar in its place, without modification. e.g. March data missing, replace by repeating February data without modifying Data calculated by estimating a trend from existing data – either to fill a gap or project forward. e.g. March data missing, replaced by an average of February and April Generic or average data from published sources representative of a company’s operations. e.g. manufacturer’s mpg figures for vehicles, records of average fuel price Primary data Secondary data Extrapolated data Proxy data Most accurate Least accurate Data collected by directly measuring the operation. e.g. fuel consumption, driver hours logged, telematics data, fuel price data from invoices 12

13. Choosing emissions factors The Defra/DECC GHG Conversion Factors for Company Reporting provide a variety of emission factors that can be used in conjunction with different types of data. Scope 1 OR Scope 3 Scope 3 All Scopes Standard Road Transport Fuel Conversion Factors CO 2 CH 4 N2ON2O Total Direct GHG Total Indirect GHG Grand Total GHG Fuel used*Total units usedUnitsxkg CO 2 per unit kg CO 2 e per unit Petrol (average biofuel blend)* litres 2.23320.00330.00582.2423 0.4750 2.7173 Petrol (100% mineral petrol) litres 2.30510.00330.00592.3144 0.4638 2.7782 Diesel (average biofuel blend)* litres 2.56360.00090.01902.5835 0.5837 3.1672 Diesel (100% mineral diesel) litres 2.65690.00090.01912.6769 0.5644 3.2413 Compressed Natural Gas (CNG) kg 2.71880.00400.00162.7244 0.4224 3.1468 Liquid Petroleum Gas (LPG) litres 1.53010.00070.00181.5326 0.1918 1.7244 Total Scope 1 OR Scope 3 Scope 3 All Scopes Passenger Road Transport Conversion Factors: Diesel Cars CO 2 CH 4 N2ON2O Total Direct GHG Total Indirect GHG Grand Total GHG Size of carTotal units travelledUnitsxkg CO 2 per unit kg CO 2 e per unit Small diesel car, up to 1.7 litre or under milesx0.227160.000080.002850.23009 0.04571 0.27579 kmx0.141150.000050.001770.14297 0.02840 0.17137 Medium diesel car, from 1.7 to 2.0 litre milesx0.282810.000080.002850.28574 0.05691 0.34265 kmx0.175730.000050.001770.17755 0.03536 0.21291 Large diesel car, over 2.0 litre milesx0.376280.000080.002850.37921 0.07570 0.45491 kmx0.233810.000050.001770.23563 0.04704 0.28267 Average diesel car milesx0.298050.000080.002850.30098 0.05996 0.36094 kmx0.185200.000050.001770.18702 0.03726 0.22428 Total for diesel cars 13

14. International operations  UK sources of emission factors are specific to UK vehicles and fuel mixes.  For operations overseas, it may be appropriate to source emissions factors specific to the country and/or vehicle type.  Sources include the GHG Protocol, and national equivalents to Defra/DECC: http://www.ghgprotocol.org/Third-Party-Databases/http://www.ghgprotocol.org/Third-Party-Databases/  Where no country-specific factor is available, UK factors may be used as a proxy. 14

15. Scope 3 emissions  Scope 3 emissions will not be required for mandatory reporting.  They can be responsible for a significant proportion of total emissions, with transport playing a significant role.  These emissions are not under the direct control of the reporting company, meaning that data collection can be challenging.  Understanding Scope 3 emissions provides significant additional opportunity to reduce impact and identify cost savings. 15

16. Collecting scope 3 transport data DHL Express Nordic  Transportation and logistics company.  98% of emissions from outsourced transport of goods by partner firms.  Partner firms required to provide information on vehicles used, distance travelled and fuel efficiency as part of subcontract payment scheme.  Data used to calculate emissions for all outsourced transport. European clothing retailer  Significant international freight transport requirements.  Use of logistics software data to obtain data on distances travelled.  Combined use of distance data and assumptions on vehicle type and freight tonnage to calculate emissions.  Freight found to be responsible for over 98% of total emissions within the footprint calculated. 16

17. Benefits of reporting Emissions reporting will bring a number of benefits:  Ability to set a baseline and track emissions reduction opportunities to drive down transport fuel costs.  Ability to benchmark against other divisions, organisations etc.  Demonstrating environmental responsibility to stakeholders and showcasing positive achievements. 17

18. Summary  Mandatory reporting will require the inclusion of global Scope 1 transport emissions.  Companies should act now to identify which transport emissions they are responsible for, and which they will need to report.  Data availability must be assessed and suitable collection routes established.  Credible calculation methodologies will be required, including the use of appropriate emission factors.  Companies will be able to take advantage of a number of benefits related to calculating and monitoring their transport emissions. 18

19. Any questions? 19

20. AEA Nikolas Hill Knowledge Leader in Transport Technology and Fuels AEA The Gemini Building Fermi Avenue Harwell Oxford Didcot OX11 0QR Tel: +44 (0)870 190 6490 E: nikolas.hill@aeat.co.uk enquiry@aeat.co.uk W: www.aeat.co.uk Copyright AEA Technology plc This presentation is submitted by AEA. It may not be used for any other purposes, reproduced in whole or in part, nor passed to any organisation or person without the specific permission in writing of the Commercial Manager, AEA Technology plc.