Kimberly-Clark China selected us to measure GHG emissions generated by its three operations in Mainland China since 2010. Initially, Kimberly-Clark required us to design its GHG inventory, which covered scope 1 (direct) and scope 2 (indirect – purchased electricity). In 2012, we started to partially involve the scope 3 emissions (indirect – other emissions, e.g. subcontracted distribution centres) to the inventory.

There is a conundrum associated with the implementation of this project, and that is the emission factor of purchased electricity. This is because: 1) detailed statistical data is not publicly available in China; and 2) the electricity transmission between grids is complex in China, for example, it is difficult to identify the sources, renewable or coal-fired power.

At that time, most corporates employed combined margin (CM) CO₂ emission factors for electricity systems (EF_grid,CM) as published by the Chinese Government for CDM project development to measure purchased electricity emission. EF_grid,CM is the result of a weighted average of build margin (BM) CO₂ emission factor (EF_grid,BM) and operating margin (OM) CO₂ emission factor (EF_grid,OM) (CDM Methodological Tool, version 02). However, we believed that this factor was not suitable for carbon measurement. This was because:

1. CM emission is the baseline scenario emission of the electricity system (or grid). However, the carbon measurement requires an emission factor that is calculated in a manner intended to yield accurate results and is consistent with the intended use of the GHG inventory (ISO 14064:2006-1, 4.3.5 (d), (e)). Furthermore, taking into account the conservative principles employed by CDM, the CDM emission factor estimation method is inaccurate for the corporate GHG inventory calculation.
2. The published EF_grid,OM is estimated by a simple OM method, which does not include low-cost/must-run power plants or units, for example renewable energies and nuclear powers. If we employed the OM method, we implied that the purchased electricity was from the coal-fired power sources only, which will result in higher GHG emissions for our Client.
3. The build margin emission factor refers to the group of prospective power plants which construction and future operation would be affected by the proposed project activity. The corporate carbon footprint calculation is only concerned about the emission generated already, the prospective emissions will not be involved in the scope.
4. The CDM emission factor calculation ignores the emissions from methane (CH₄) and nitrous oxide (N₂O). These should be considered in the corporate GHG inventory design.

Taking into account all of these considerations, the Greenfield team developed our own emission factor estimation method. Firstly, we gave up any efforts to find more accurate data of grid transmissions because of the availability of data in China. Secondly, we decided not to concern the emissions of build margin during the estimation. Thirdly, we calculated the low-cost/must-run power plants emissions in the estimation process. Finally, the emissions of methane and nitrous oxide are taken into account. Our rationale satisfied the Environmental Management Team of Kimberly-Clark Headquarter in America, and we are now developing the fourth carbon emission report (2013) for Kimberly-Clark China.

Meanwhile, we shared our concerns on employing inaccurate grid emission factors during the corporate carbon footprint calculation at some professional seminars. These included: The Low Carbon Development International Forum (2011) organized by Peking University and 3^rd Earth Temple (same pronunciation as low-carbon in mandarin) Forum (2012) organized by Beijing Environmental Exchange. Furthermore, our concerns have been ratified by the newly published World Resources Institute (WRI) paper “Getting every ton of emissions right: an analysis of emission factors for purchased electricity in China” on June 2013.