1

DEVELOPING GHG ACCOUNTING FRAMEWORK & ASSESMENT OF

PROBABLE STRATEGIES TO MITIGATE CO2 EMISSION IN A CHEMICAL

INDUSTRY

Project Report Submitted to the University of Calcutta

In Partial Fulfillment for the Award of Master of Public Systems

Management (With Specialization in Energy Management)

By

SHIVRAM MUKHERJEE

ROLL NO: 107/MPS/090098

REGISTRATION NUMBER:-107-1121-0027-09

SESSION: 2009-2011

INDIAN INSTITUTE OF SOCIAL WELFARE AND BUSINESS MANAGEMENT

COLLEGE SQUARE WEST, KOLKATA 700 073

May, 2011

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ACKNOWLEDGEMENT

At this outset, I would like to avail this opportunity to express my

thankfulness and gratitude towards Dr. K.M Agrawal, Head of the Department,

Masters in Public Systems Management, IISWBM, Kolkata

I would like to thank Dr.Sarbani Mitra, Coordinator, Environment

Management, IISWBM Kolkata for her constant guidance, encouragement and

giving me precious tips for completing my project work

I am also thankful to Mr. Arindam Dutta, Coordinator, Energy Management,

IISWBM, for his valuable inputs and guidance for the completion of the project

work on time.

I would also like to extend my heartfelt gratitude towards Mr. Rajib Kumar

Debnath, Director (Environment& Sustainability Services) and Deloitte

Touché Tohmatsu India Pvt. Ltd for providing me this opportunity to

complete my project & project work at this esteemed organization.

I am also thankful to my external guide Mr. Jaideep Singh Rathore & my

colleague Mr. Chandan Singh, Assistant Managers at Deloitte Touché

Tohmatsu India Pvt. Ltd. Bangalore, whose constant encouragement and

support helped me gain substantial knowledge in the area pertaining to my

project work.

Finally, I would like to thank my parents and all my friends without the

support, motivation and guidance of whom; I wouldn’t have been able to

complete the project work

3

INDUSTRY NAME AND BRIEF DESCRIPTION

� DELOITTE TOUCHE’ TOHMATSU INDIA PRIVATE LIMITED

Deloitte Centre, Anchorage II, 100/2 Richmond Road, Bangalore, Karnataka – 560025

� DELOITTE AS A GLOBAL FIRM

With over 130,000 employees in 150 countries Deloitte has an unparalleled breadth of

service offering, ensuring that it can help the clients with the range of challenges they

face. Deloitte is among the leading audit and consulting firm in major countries such as

USA, UK, Japan (under the brand name of Tohmatsu), France, but equally so in Latin

America, India and China. In India we have offices in 13 locations and over 5000 staff.

The service provided by Deloitte includes Consulting, Tax, Audit & Enterprise Risk

Services and Financial Advisory.

� DELOITTE GLOBAL – (ENVIRONMENT & SUSTAINABILITY SERVICES)

Deloitte’s Global Environment and Sustainability Services is a global business line of

more than 200 dedicated practitioners in more than 20 countries world-wide that are

closely interlinked with Deloitte assurance services, risk and management consulting

and corporate financial services. Deloitte has delivered services in this field since the Rio

Earth Summit in 1992 as such; the group has been involved with Sustainable

Development issues since the Earth Summit in 1992 and has been working with

industry, governments, and international organizations alike. As a participant in the

1992 Earth Summit (formally known as the United Nations Conference on Environment

and Development), Deloitte was among the first professional services organizations to

acknowledge the importance of sustainability. Since then, Deloitte practitioners have

continued to participate in relationships with organizations like the World Business

Council for Sustainable Development, the United Nations Global Compact, and the GRI.

Deloitte is a founder member of the World Business Council for Sustainable

Development (WBCSD) and the UN Global Compact and is a signatory of the World

4

Economic Forum Corporate Citizenship challenge. The Environment & Sustainability

Services forms a part of the consulting practice present in Deloitte.

� DELOITTE INDIA - ESS NETWORK & STRENGTH & STRENGTH

In India, the ESS team is represented by professionals having background in Basic Science,

Engineering, and Management with an in-depth experience in ESS related services. The ESS

network in India is spread across the cities of Kolkata, Gurgaon (NCR), Mumbai, Chennai,

Bangalore and Hyderabad, with approximate staff strength of 40. The Environment &

Sustainability is headquartered in Gurgaon.

Deloitte, a leader in the field of CSR is the Founder Member of World Business Council for

Sustainable Development (WBCSD) and UN Global Compact and a signatory to World

Economic Forum on Corporate Citizenship Challenge. It has chaired the Steering

Committee, which has played a prominent role in the development of the GRI Sustainability

Reporting Guidelines Played a significant role in the development of ISAE 3000.Largest

share of Assurance Services in the Top 50 Best Sustainability Reporting firms. Maximum

share of Reporters which have bagged International Awards on CSR.

� DELOITTE ENVIRONMENT & SUSTAINABILITY SERVICES - KEY AREAS OF

WORK

A. Corporate Sustainability Reporting (CSR)

B. GHG Accounting & Assurance

C. CDM (Clean Development Mechanism) and VCS (Voluntary Carbon) Advisory

Services

D. Quality, Social, Safety, Health and Environmental Management Systems as per ISO

9001/ISO-14001, ISO 18001 & SA 8000

E. Environmental & Social Due Diligence Review

F. Advisory Services on Renewable Energy Certificates(REC’s)

G. Advisory Services on LEED(Leadership in Energy & Environmental Design)

H. HS(Environment Health & Safety) Legislation Compliance Assessment and Review

and EHS & Social Accountability related Advisory services

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EXECUTIVE SUMMARY

As we all know that Climate Change is a serious issue that has surrounded the world today

and with more and more issues relating to global warming, increase in the surface

temperature of the earth, melting of the glaciers, hence it has become a necessity to opt for

such a mechanism that would not only help to mitigate adverse effects of climate change,

but it would help to earn revenue in terms of carbon offsets, and also reduce GHG emission.

In recent years the voluntary carbon trading market has been plagued by a perceived lack

of credibility stemming from the absence of uniform quality control and assurance

standards.

The scope of this study extends over qualitative assessment of the climate change impacts

on the chemicals and fertilizer industry sectors, estimating the carbon footprint of Aquasub

Chemicals Limited (ACL) for a selected base year and outlining strategy for GHG abatement

for the broad categories of manufacture and production of fertilizers and inorganic

chemicals. Both the categories have been traditionally portrayed as major contributors to

the emission of greenhouse gases contributing to climate change.

Industrial Processes include the energy emissions and process emissions from the

manufacture of cement, limestone and dolomite calcinations, soda ash manufacture and

consumption, carbon dioxide manufacture and aluminium production. It is evident that the

contribution of this sector to global GHG emissions is considerably high.

ACL manufactures inorganic fertilizers including Urea and other Phosphatic fertilizers

which target the huge agricultural markets in India and other developing countries. The

agricultural sector is significantly vulnerable to the risk of climate change. Agricultural

production and yield in countries such as India and other developing countries are largely

dependent on climatic patterns and monsoons. Shifts in climatic patterns due to global

warming, uncertainty in monsoons and water availability, increased storm surges, floods,

droughts all attributable to climate change can reduce crop production and thus directly

affect fertilizer demand. Thus climate change has a potentially negative effect on the

fertilizer business of ACL. In addition, climate change regulations such as caps on the

6

emissions of GHGs or sectoral GHG benchmarking may also significantly affect the

organization’s profitability due to high GHG intensity of this business. The trends of

continual increase in fossil fuel prices, government policies on energy efficiency and fuel

switch, minimized ecological impact clearly signify the risk associated to climate change

and justify the development of an effective climate change mitigation strategy to tackle the

barriers portended.

Fig: - Representation of generic approach followed for the carbon footprint study

Specific methodology was followed during the completion of this assessment study:-

A. Identification of the GHG source/ sink/ reservoir

B. Defining Organizational and Operational Boundary

C. Layout of the data collection approach

D. Layout of the Calculation Methodology

E. Determination of carbon footprint

Site visit by consultants

Calculation of GHG inventory

Discussion with plant personnel

GHG mitigation opportunities identification

Prioritization of GHG abatement

measures

Finalising Carbon

footprint report

Submission of report

Kick off meeting for

idea & of work

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Figure 1 Working Procedure followed during the project

The study clearly indicated the distinct scope of reducing overall GHG emissions of the

business operations of ACL. The scopes of reduction may first be identified on a macro

scale or the business unit level. Thereafter the scopes of reduction are diversified on an

installation wise basis or a product wise basis as may be deemed necessary. ACL should

explore the need to reach the goal of carbon neutrality (or net zero GHG emissions). This

should be an important strategic agenda for ACL in view of their global presence and future

plan for global expansion across diverse geographies. Greater investor interest, greater

customer acceptance, improved bottom line are the more obvious benefits of reaching the

goal of carbon neutrality.

However, like any other business initiative, each of these GHG abatement strategies which

have been recommended are subject to regulatory risks and risks of implementation

despite the possible strategic and/or financial attractiveness. ACL needs to perform an

holistic evaluation of the GHG abatement levers and align their implementations with the

growth plan of the organization to ensure the path towards ‘low’ or ‘no’ carbon is tread

upon.

Identification of GHG Source/Sink/Reservoir

Defining organization & operational boundary

Layout of data Collection Approach

Layout of calculation methodology

Determination of Carbon Footprint

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INDEX

Serial Number Page Number

1. ACKNOWLEDGEMENT 2

2. INDUSTRY OVERVIEW 3

3. EXECUTIVE SUMMARY 5

4. ABBREVIATIONS 9

5. INTRODUCTION 10

6. OBJECTIVES & TARGETS 23

7. REVIEW OF LITERATURE 24

8. RESEARCH METHODOLOGY 31

9. DATA ANALYSIS/CASE STUDY 36

10. RESULTS & DISCUSSION 47

11. CONCLUSION 52

12. SCOPE AHEAD & REFERENCE 56-59

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ABBREVIATIONS

GHG: - GREEN HOUSE GAS

WBCSD: - WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT

WRI: - WORLD RESOURCE INSTITUTE

SBU: - STRATEGIC BUSINESS UNIT

ACL: - AQUASUB CHEMICALS LIMITED

NPK: - NITROGEN-PHOSPHORUS-POTASSIUM

LABSA: - LINEAR ALKYL BENZENE SULPHONIC ACID

STPP: - SODIUM TRI POLY PHOSPHATE

DAP: - DI AMMONIUM PHOSPHATE

SSP: - SINGLE SUPER PHOSPHATE

GWP: -GLOBAL WARMING POTENTIAL IPCC: -INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE CCS: - CARBON CAPTURE & STORAGE

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INTRODUCTION

The world's climate has always varied naturally but compelling evidence from around the

world indicates that a new kind of climate change is now under way, foreshadowing drastic

impacts on economies and ecosystems. Levels of carbon dioxide (CO2) and other

'greenhouse gases' (GHGs) in the atmosphere have risen steeply during the industrial era

due to unplanned human activities like deforestation or heavy fossil fuel use, driven by

unrestrained economic and population growth. Climate change, popularly caused by ‘global

warming’, is a major concern for today’s international scientific community, policy makers

and business leaders all over the world. In the world of business, climate change has

developed from being a fringe concern, focusing on a company’s brand and Corporate

Social Responsibility, to an increasingly central topic for strategic deliberation and decision

making by investors and industrialists. At policy levels of visionary business leaders,

climate change has increasingly assumed an important political, economic and socio-

ecological dimension. This entails a broad international consensus to develop an integrated

approach to tackle the problem. Greenhouse gas accounting describes the way to inventory

and audit greenhouse gas (GHG) emissions. Guidance for accounting for GHG emissions

from organizations and emission reduction projects is provided by the World Resources

Institute (WRI) and World Business Council for Sustainable Development (WBCSD) GHG

Protocol.

For national GHG inventories, guidance is provided by the Intergovernmental Panel on

Climate Change (IPCC) methodology reports. The International Organization for

Standardization (ISO) also provides some general standards for- greenhouse gas emissions

at organization level (ISO 14064 - 1) and greenhouse gas emissions at project level (ISO

14064 - 2).Specifications to validate and verify relevant accountings are documented in

(ISO 14064 .

One of the most important and interesting steps was taken by FIFA during 2006/2010

World Cups at Germany & South Africa.

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INITIATIVES BY FIFA (FE’DE’RATION INTERNATIONALE de FOOTBALL ASSOCIATION)

A major initiative was taken by FIFA was to ensure that the Soccer World Cups hosted in

Germany (2006) as well as in South Africa (2010) were environmentally sustainable and it

was ensured that GHG emissions from these two huge events were minimal.

A key overarching aim of Host City Cape Town’s Green Goal effort was to ensure that the

2010 FIFA World Cup was a low carbon event. This specifically relates to ensuring low

climate change impact through the reduction of GHG emissions. Where GHG emissions

cannot be avoided, they will be mitigated through a range of Green Goal 2010 carbon

mitigation projects. Hosting a low-carbon event, and reducing its carbon footprint, can be

achieved through integrating energy efficiency, waste reduction and avoidance, and water

conservation with all activities related to the event. The objective of the carbon mitigation

programme is to compensate for unavoidable GHG emissions, such as activities related to

transport (ground and air travel) and accommodation. Such compensation can be achieved

through the purchase of TRECs, or capital investment in climate protection projects.

Around 3.2 million home and foreign visitors attended the 64 World Cup matches. In

addition, more than 20,000 journalists and some 1,500 FIFA officials followed the matches.

The transport of visitors, journalists and honorary guests to the venues, and between the

stadiums, as well as the transport of supplies and services to stadiums, also involves

adverse effects on the environment. It was estimated that huge amount GHG emission

would take place. The reduction of traffic-related effects on the environment was an

important objective of sustainable development in Germany. This concerned the avoidance

of unnecessary traffic, the switching of private transport to (local) public transport systems

and the environmentally efficient development of transport through the further

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development of Environmental objectives for the 2006 FIFA World Cup March 2003the

technical and organizational systems of all means of transport.. The realization of the 2006

Football World Cup in Germany with a neutral impact on the climate was thus a general,

quantifiable environmental objective where considerable amount of GHG emission were

reduced.

ENTERPRISE CARBON ACCOUNTING (ECA)

Corporate Carbon Footprint aims to be a rapid and cost effective process for businesses to

collect, summarize, and report enterprise and supply chain GHG inventories. ECA leverages

financial accounting principles, whilst utilizing a hybrid of input-output LCA (Life Cycle

Analysis) and process methodologies as appropriate. The evolution to ECA is necessary to

address the urgent need for a more comprehensive and scalable approach to carbon

accounting. While an emerging area, a number of new companies offer ECA solutions. ECA

is a critical part of broader Enterprise Sustainability Accounting. The Evolution of LCA to

ECA Process LCA Process LCA is the most popular method, currently, for conducting life-

cycle assessment, and is often referred to as the SETAC-EPA method because of the role

played by SETAC and EPA in this method’s development. The inputs and outputs of

multiple stages of a product’s life are investigated in turn, and the results are aggregated

into single metrics of impact such as eutrophication, toxicity, and greenhouse gas

emissions. Three tools exist on the market to assist researchers in conducting process LCA

(such as GaBi, Ecoinvent, and Umberto). These tools contain data from previous

researchers on the environmental impact of materials and processes that are then strung

together by the user to form a system.

Greenhouse gas inventories are a type of emission inventory that are developed for a

variety of reasons. Scientists use inventories of natural and anthropogenic (human-caused)

emissions as tools when developing atmospheric models. Policy makers use inventories to

develop strategies and policies for emissions reductions and to track the progress of those

policies. And, regulatory agencies and corporations rely on inventories to establish

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compliance records with allowable emission rates. Businesses, the public, and other

interest groups use inventories to better understand the sources and trends in emissions.

Unlike some other air emission inventories, greenhouse gas inventories include not only

emissions from source categories, but also removals by carbon sinks. These removals are

typically referred to as carbon sequestration.

Greenhouse gas inventories typically use Global warming potential (GWP) values to

combine emissions of various greenhouse gases into a single weighted value of emissions.

All Annex I countries are required to report annual emissions and sinks of greenhouse

gases under the United Nations Framework Convention on Climate Change (UNFCCC).

National governments that are Parties to the UNFCCC and/or the Kyoto Protocol are

required to submit annual inventories of all anthropogenic greenhouse gas emissions from

sources and removals from sinks.

The Kyoto Protocol includes additional requirements for national inventory systems,

inventory reporting, and annual inventory review for determining compliance with Articles

5 and 8 of the Protocol. Project developers under the Clean Development Mechanism of the

Kyoto Protocol prepare inventories as part of their project baselines. Corporation and

other entities can prepare greenhouse gas inventories to track progress towards meeting

an emission reduction goal.

Scientific efforts aimed at understanding detail of total net carbon exchange. Example:

Project Vulcan - a comprehensive US inventory of fossil-fuel greenhouse gas emissions. ISO

14064The ISO 14064 standards (published in 2006 and early 2007) are the most recent

additions to the ISO 14000 series of International Standards for environmental

management. The ISO 14064 standards provide governments, businesses, regions and

other organizations with an integrated set of tools for programs aimed at measuring,

quantifying and reducing greenhouse gas emissions. These standards allow organizations

take part in emissions trading schemes using a globally recognized standard.

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ECONOMIC INPUT-OUTPUT LCA

Input-Output LCA utilizes economic input-output tables and industry-level environmental

data to construct a database of environmental impacts per dollar sold by an industry. The

boundary problem of process LCA is solved in this method because the economic input-

output table captures the interrelations of all economic sectors; however, aggregated

industrial categories limit the specificity of the results. Input–output analysis is a very

powerful tool for the upfront screening of corporate carbon footprints, for informing

streamlined supply-chain GHG accounting and for setting priorities for more detailed

analyses

ENTERPRISE CARBON ACCOUNTING (ECA)

At its core, ECA is essentially a hybrid life-cycle assessment; however, rather than the

traditional bottom-up approach of life-cycle assessment, ECA links financial data directly to

LCA data to produce a snapshot of the companies’ operations. Rather than probing at areas

thought to be problematic, ECA quickly identifies problem areas in the supply chain so that

rapid action can be taken. This fundamental shift in thinking enables decision makers to

rapidly address critical areas within the enterprise and supply chain.

SOCIALISED SUPPLY CHAIN

Socialised supply chain accounting is the term generally applied to Enterprise Carbon

Accounting Solutions that provide a collaborative mechanism for supply chain participants

to engage, expose and determine supply chain emissions through the process of shared

knowledge.

The term "Socialised Supply Chain" was coined by the CEO of Nootrol, Mark Kearns to

describe a platform where supply chain participants exposed Process LCA and embedded

emissions. Hence it becomes a very important part of the project activity under

consideration. Moreover socialized supply chain has become very important in modeling of

ERP (Enterprise Resource Planning)

15

CARBON FOOTPRINT

The total set of greenhouse gas (GHG) emissions caused by an organization, event, product

or person. Greenhouse gases can be emitted through transport, land clearance, and the

production and consumption of food, fuels, manufactured goods, materials, wood, roads,

buildings, and services. For simplicity of reporting, it is often expressed in terms of the

amount of carbon dioxide, or its equivalent of other GHGs, emitted.

The concept name of the carbon footprint originates from ecological footprint discussion.

The carbon footprint is a subset of the ecological footprint and of the more comprehensive

Life Cycle Assessment (LCA). An individual's, nations, or organization's carbon footprint

can be measured by undertaking a GHG emissions assessment. Once the size of a carbon

footprint is known, a strategy can be devised to reduce it, e.g. by technological

developments, better process and product management, changed Green Public or Private

Procurement (GPP), carbon capture, consumption strategies, and others.

The mitigation of carbon footprints through the development of alternative projects, such

as solar or wind energy or reforestation, represents one way of reducing a carbon footprint

and is often known as Carbon offsetting. The main influences on carbon footprints include

population, economic output, and energy and carbon intensity of the economy. These

factors are the main targets of individuals and businesses in order to decrease carbon

footprints. Scholars suggest the most effective way to decrease a carbon footprint is to

either decrease the amount of energy needed for production or to decrease the dependence

on carbon emitting fuels. The ISO 14064 standards (published in 2006 and early 2007) are

the most recent additions to the ISO 14000 series of International Standards for

environmental management. The ISO 14064 standards provide governments, businesses,

regions and other organizations with an integrated set of tools for programs aimed at

measuring, quantifying and reducing greenhouse gas emissions. These standards allow

organizations take part in emissions trading schemes using a globally recognized standard.

16

ISO 14064

ISO 14064-1:2006 specifies principles and requirements at the organization level for

quantification and reporting of greenhouse gas (GHG) emissions and removals. It includes

requirements for the design, development, management, reporting and verification of an

organization's GHG inventory.

ISO 14064-2:2006 specifies principles and requirements and provides guidance at the

project level for quantification, monitoring and reporting of activities intended to cause

greenhouse gas (GHG) emission reductions or removal enhancements. It includes

requirements for planning a GHG project, identifying and selecting GHG sources, sinks and

reservoirs relevant to the project and baseline scenario, monitoring, quantifying,

documenting and reporting GHG project performance and managing data quality.

ISO 14064-3:2006 specifies principles and requirements and provides guidance for those

conducting or managing the validation and/or verification of greenhouse gas (GHG)

assertions.

It can be applied to organizational or GHG project quantification, including GHG

quantification, monitoring and reporting carried out in accordance with ISO 14064-1 or ISO

14064-2. ISO 14064-3:2006 specifies requirements for selecting GHG validators/verifiers,

establishing the level of assurance, objectives, criteria and scope, determining the

validation/verification approach, assessing GHG data, information, information systems

and controls, evaluating GHG assertions and preparing validation/verification statements.

The scope of this study extends over qualitative assessment of the climate change impacts

on the chemicals and fertilizer industry sectors, estimating the carbon footprint of

AQUASUB CHEMICALS LIMITED, for a selected base year and outlining strategy for GHG

abatement for the broad categories of manufacture and production of fertilizers and

inorganic chemicals. Both the categories have been traditionally portrayed as major

contributors to the emission of greenhouse gases contributing to climate change.

17

Fig1:- Exhibit showing contribution of GHG from 1978-2010

Industrial Processes include the energy emissions and process emissions from the

manufacture of cement, limestone and dolomite calcinations, soda ash manufacture and

consumption, carbon dioxide manufacture and aluminium production. It is evident that the

contribution of this sector to global GHG emissions is considerably high at nearly 17%

second largest contributor after power plants.

Contribution of carbon dioxide gas from the sector is alarmingly high at close to 20.6%

contribution1. Other greenhouse gases such as methane and nitrous oxides which are

usually released as process gases from chemical and fertilizer industries account minor

quantities toward global warming effect. Impact of Climate Change on the fertilizer and

chemical manufacturing business AQUASUB CHEMICALS LIMITED manufactures inorganic

fertilizers including Urea and other Phosphatic fertilizers which target the huge

agricultural markets in India and other developing countries. The agricultural sector is

significantly vulnerable to the risk of climate change. Agricultural production and yield in

countries such as India and other developing countries are largely dependent on climatic

patterns and monsoons.

18

Shifts in climatic patterns due to global warming, uncertainty in monsoons and water

availability, increased storm surges, floods, droughts all attributable to climate change can

reduce crop production and thus directly affect fertilizer demand. Thus climate change has

a potentially negative effect on the fertilizer business of AQUASUB CHEMICALS LIMITED. In

addition, climate change regulations such as caps on the emissions of GHGs or sectoral GHG

benchmarking may also significantly affect the organization’s profitability due to high GHG

intensity of this business.

The trends of continual increase in fossil fuel prices, government policies on energy

efficiency and fuel switch, minimized ecological impact clearly signify the risk associated to

climate change and justify the development of an effective climate change mitigation

strategy to tackle the barriers portended.

Policy and Regulatory Environment Much of the current policy focus in relation to the

Indian fertilizer and chemicals sectors is on the nature and impact of on-going fuel pricing,

subsidization reforms and energy efficiency improvement in the production processes.

Some relevant policies like Integrated Energy Policy, Electricity Act 2003, Natural Gas

Utilization Policy, and National Action Plan on Climate Change. However, like any other

business initiative, each of these GHG abatement levers are subject to regulatory risks and

risks of implementation despite the possible strategic and/or financial attractiveness. ACL

needs to perform an holistic evaluation of the GHG abatement levers and align their

implementations with the growth plan of the organization to ensure the path towards ‘low’

or ‘no’ carbon is tread upon.

Hence TQMS through the exercise of the assessment of the carbon footprint exercise wants

to play an active role of contributing towards an effective global strategy to combat climate

change by working in cohesion with local and international corporate bodies and the

Governments in creating the right policy, financial, regulatory, social and technological

environment to inventorize the Green House Gas emissions, to formulate a low carbon

growth trajectory and to adapt to the negative impacts of climate change.

19

Policies associated with GHG Accounting can be identified as follows:-

1. Electricity Act 2003

2. Energy Policy

3. Natural Gas Policy

4. National Action Plan For Climate Change

CARBON FOOTPRINT ESTIMATION AND DEVELOPMENT OF GHG STRATEGY

In this context it becomes all the more crucial for an entity like AQUASUB CHEMICALS

LIMITED having mainstream interest in the production and manufacture of chemicals and

fertilizer industry to orient its growth and sustenance strategies in line with low carbon

impact. AQUASUB CHEMICALS is one of the companies which have identified the need for

accounting its carbon footprint of its business operations which will help in understanding

the current state of its GHG liability. The report may be used by AQUASUB CHEMICALS

LIMITED to understand the size of their overall GHG inventory, the anticipated GHG risks

for the future and develop the future strategy for potential GHG mitigation which would

help the organization to reduce its carbon footprint in a progressive fashion over a period

of time.

Taking the lead in climate change mitigation activities will help the company to reduce its

GHG liability in the most economically efficient fashion and therefore gain significant

competitive advantage. By undertaking early actions large corporations can prepare

themselves well in advance to face climate regulations, enhance their corporate image to

their global stakeholders, increase valuation of the company and secure access to capital

and finally discover the financial gain from the unrealized assets in a trading environment.

The methodology for the assessment study consisted of specific steps which were

incorporated in consultation with top management of ACL.

20

The study had classified the operations of AQUASUB CHEMICALS LIMITED into two broad

Strategic Business Units (SBUs) namely Fertilizers and Chemicals. The Fertilizer SBU

consisted of a product mix including Urea and Phosphatic Fertilizers. The Chemicals SBU

unit consisted of a product mix including mainly Soda Ash, Cement etc. GHG emissions of

AQUASUB CHEMICALS LIMITED included the emissions from the production of all

inorganic chemicals and fertilizers by the individual production centers all over India and

abroad.

Now let’s get an idea about Green House Gas protocol:-

The Greenhouse Gas Protocol (GHG Protocol) is the most widely used international

accounting tool for government and business leaders to understand, quantify, and manage

greenhouse gas emissions. The GHG Protocol, a decade-long partnership between the

World Resources Institute and the World Business Council for Sustainable Development, is

working with businesses, governments, and environmental groups around the world to

build a new generation of credible and effective programs for tackling climate change. It

provides the accounting framework for nearly every GHG standard and program in the

world - from the International Standards Organization to The Climate Registry - as well as

hundreds of GHG inventories prepared by individual companies.

The GHG Protocol also offers developing countries an internationally accepted

management tool to help their businesses to compete in the global marketplace and their

governments to make informed decisions about climate change.

In 2006, the International Organization for Standardization (ISO) adopted the Corporate

Standard as the basis for its ISO 14064-I: Specification with Guidance at the Organization

Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals. This

milestone highlighted the role of the GHG Protocol’s Corporate Standard as the

international standard for corporate and organizational GHG accounting and reporting.

ISO, WBCSD, and WRI signed a Memorandum of Understanding on December 3, 2007 to

jointly promote both global standards.

21

ESTABLISHING BASELINE PROTECTION

The past decade has been a time of great uncertainty for businesses seeking to incorporate

GHG issues into their corporate strategies. The international mechanism establishing

binding limits on GHG emissions – the Kyoto Protocol – entered into force in 2005, more

than seven years after it was negotiated, and its emission caps are set to expire in 2012. In

the United States, a patchwork of state and regional regulation has evolved in the absence

of a coordinated national GHG mitigation policy. The future of international climate change

policy post-2012 is unclear, and much of the world is not currently subject to GHG

regulation. As a result, many companies find themselves in an uncertain situation in which

they must make long-term investment decisions without knowing what GHG restrictions

they may face in the future.

In response, some GHG programs, such as the California Climate Action Registry, have

sought to establish and “protect” their participants’ baseline emissions. This refers to

developing and certifying inventories of participants’ GHG emissions and ensuring, insofar

as is possible, that any future regulatory programs take into account participants’ pre-

regulatory, voluntary efforts to reduce their emissions.

The concept of baseline protection has been recognized in legislation introduced before the

U.S. Congress, which has proposed considering “early action” in companies’ allocations of

GHG allowances, and has cited a range of GHG registries and reporting programs as

examples of what could contribute to proof of early action. A program design that

incorporates stringent quality assurance measures may strengthen participants’ claim to

credit for early action. When doing a baseline analysis, it is most effective to break out

energy usage by “end-use,” rather than only by sector. For example, if a city can determine

how much energy is used to provide lighting, refrigeration, cooking, electric motor power,

etc. the resulting data are much more useful than if broken out by sector -- residential,

commercial and/or industrial. Evaluating end-use information will better prepare cities to

identify which programs will have the most impact on their GHG emission reductions

22

PROVIDING INFORMATION TO STAKEHOLDERS

Finally, GHG program aims to provide information on corporate GHG emissions to external

stakeholders – such as investors (through programs such as the Carbon Disclosure

Project1), environmental groups, and researchers – on which to base decisions related to

investments, risk assessment, and policy and advocacy positions.

Designers of such programs should consider the most useful level of disaggregation of GHG

information to satisfy the targeted stakeholder groups. They should also ensure that their

accounting and calculation methodologies are sufficiently transparent and consistent and

that participants are able to provide additional context to their reported emission

information.

The strategy will provide the first formal stakeholder consultation of the project on the

road to developing such partnerships and will provide the context for defining the

frameworks of how such a national programme could be developed. The strategy will

provide a background of the internationally accepted GHGP tools and guidelines, including

the newly introduced/developed Scope 3 and life cycle analysis tools. By engaging with the

leading members of the Indian business community, the event will attempt to answer the

following broad questions.

1. What are the benefits of GHG accounting and inventorization?

2. Are the corporates aware of and are using the GHGP tools that exist or are being

developed internationally?

3. What are the experiences of corporates who have attempted to develop GHG

inventories in India and what are the challenges to GHG accounting and

inventorization?

4. What kind of support would be needed to improve GHG accounting? Is there a need

for a capacity building and awareness generation programme at the state/sector

level?

23

OBJECTIVES & TARGETS

The objective of the Project titled: - “DEVELOPMENT OF GHG STRATEGY IN A CHEMICAL

INDUSTRY” is primarily to reduce the Green House Gas emission to also to mitigate the

harmful effects of Climate Change. During the course of the dissertation one live project

was witnessed, where all the objectives were met.

1. To recommend GHG abatement strategies for mitigation of GHG emissions

2. To show the vulnerable areas in chemical industries and effects of climate change in

chemical industry.

3. To analyze and quantify the GHG emissions

4. To understand the policies that are being used to formulate the GHG Strategy

5. To show the GHG abatement strategy contributes towards Sustainable

Development.

6. To identify the benefits and Business goals for Carbon footprint estimation

7. To identify the scope of GHG emission to be included for GHG Accounting.

24

REVIEW OF LITERATURE

Céline Kauffmann and Cristina Tébar Less in their paper titled “TRANSITION TO A LOW-

CARBON ECONOMY: PUBLIC GOALS AND CORPORATE PRACTICES” (30th June -1st July 2010)

were of the opinion that policy frameworks, regulations and other drivers of corporate

action in support of a low-carbon economy and documents business practices in

addressing climate change, building on principles of responsible business conduct as

identified in the Guidelines for Multinational Enterprises. It is structured around three

broad areas of corporate action: accounting for greenhouse gas (GHG) emissions;

achieving reduction of GHG emissions; reaching out to suppliers, consumers and other

stakeholders.

The post 2012 international climate change architecture is still under discussion.

However, in the framework of the Copenhagen Accord, many governments have publically

pledged significant economy-wide GHG emission reductions and have started putting in

place policies to achieve emission reductions. Measures taken by governments to reach

emission targets vary in type (regulatory measures, taxes, emissions trading markets),

scope (sectors covered, types of emissions), and stringency. In particular, as this report

shows, policy measures directly aimed at framing corporate disclosure of GHG emissions,

emission reductions and the interface with consumers follow different approaches and are

at various stages of development in major OECD countries. Outside of the OECD they

remain largely non-existent.

A number of companies have realized the risks of inaction and have put climate change

strategies in place in spite of diverse and incomplete regulatory frameworks. Frontrunners

have started taking action as early as 1990, many in the early 2000s. Since 2005, with the

coming on stream of the European Union Emissions Trading Scheme and increased

attention of policy makers to climate change, mainstreaming of emission reduction in

business operations has become more widespread among companies. In particular,

evidence collected in support of this work through various sources, including a new survey

25

by OECD to companies, shows that an increasing number of companies is accounting GHG

emissions, establishing corporate plans to address climate change and looking beyond the

company’s boundaries to contribute to a low-carbon economy.

In addition to complying with current regulation and anticipating future policy

developments, companies have various other motivations to reduce GHG emissions.

Drivers include cutting energy costs, reducing dependence on fossil fuels and seizing new

business opportunities. Companies are also increasingly responsive to societal

expectations in relation to climate change. If direct pressure from investors, consumers and

employees does not appear to be a major driver, companies are mindful of preserving or

improving their reputation. Companies are also aware of the importance of contributing to

shaping the policy debate at international, national and regional levels.

Accounting GHG emissions is an essential step for companies to assess climate change-

related risks and understand their impacts on climate. The reporting of this information

can help policy makers in developing targeted climate change policies and monitoring

progress across industries. For consumers, commercial partners and financial institutions,

this information provides a basis to understand the company’s carbon footprint and its

performance in managing climate-change risks.

According to Christian Van Stolk, Myles Collins, Mengjie Wu, Abigail Brown in their report

titled “ACCOUNTING FOR SUSTAINABILITY PART III”(November 2006) pointed out some

themes on the approaches and initiatives taken by actors in specific countries based on the

examples identified. However, this report does not aim to give a comprehensive overview

of global accounting for sustainability initiatives and programmes, nor provide an

exhaustive overview of initiatives and measures taken in the countries selected. The

accounting for sustainability field is emergent and multidisciplinary, with different

perspectives, frameworks, and approaches. This report offers a flavour of some of these

global approaches with a focus on their implementation and impact. Specifically, the report

shows examples of initiatives that aim to internalize the external costs of economic activity

and how initiatives aim to change the behavior of decision-makers and consumers.

26

For Tata Steel, Asia’s first and India’s largest integrated private sector steel company,

reducing its Green House Gas (GHG) emissions through energy efficiency is a key element

of its primary business goal: the acceptability of its product in international markets. Each

year, in pursuit of this goal, the company launches several energy efficiency projects and

introduces less-GHG-intensive processes. The company is also actively pursuing GHG

trading markets as a means of further improving its GHG performance.

To succeed in these efforts and be eligible for emerging trading schemes, Tata Steel must

have an accurate GHG inventory that includes all processes and activities, allows for

meaningful benchmarking, measures improvements, and promotes credible reporting. Tata

Steel has developed the capacity to measure its progress in reducing GHG emissions. Tata

Steel’s managers have access to on-line information on energy usage, material usage, waste

and by-product generation. Using this data and the GHG Protocol calculation tools, Tata

Steel generates two key long-term, strategic performance indicators: specific energy

consumption (Giga calorie / tonne of crude steel) and GHG. Since the company adopted the

GHG Protocol Corporate Standard, tracking performance has become more structured and

streamlined. This system allows Tata Steel quick and easy access to its GHG inventory and

helps the company maximize process and material flow efficiencies.

According to CLIMATE MODELLING FORUM , A report published by MINISTRY OF

ENVIRONMENT & FOREST (MoEF), GOVERNMENT OF INDIA (September 2009) , The

international debate on climate change is influenced to a significant extent by studies that

estimate the GHG emissions trajectories of the major economies of the world. These studies

are based on detailed energy-economy models that project global and region or country-

wise GHG emissions. Until recently, most of these studies have been carried out in

developed countries, and have often applied assumptions and techniques that do not

necessarily reflect the ground realities in developing countries.

With a view to develop a fact-based perspective on climate change in India that clearly

reflects the realities of its economic growth, the policy and regulatory structures, and the

vulnerabilities of climate change, the Government of India, through the Ministry of

27

Environment & Forests, has supported a set of independent studies by leading economic

institutions. This initiative is aimed at better reflecting the policy and regulatory structure

in India, and its specific climate change vulnerabilities. The studies, which use distinct

methodologies, are based on the development of energy-economic and impact models that

enable an integrated assessment of India’s GHG emissions profile, mitigation options and

costs, as well as the economic and food security implications. Mitigation of GHG emissions

will, beyond a fairly modest level, involve appreciable economic costs to a society. On the

other hand, the adverse impacts of climate change would be felt in diverse sectors which

are at the core of livelihood concerns, especially of the poor – agriculture, water resources,

coastal resources, vector borne disease, “natural” calamities, etc.

According to the report published by THE ENERGY RESOURCE INSTITUTE (TERI), titled

“CLIMATE CHANGE MITIGATION MEASURES IN INDIA” (2008) India is the world’s fourth

largest economy and fifth largest greenhouse gas (GHG) emitter, accounting for about 5%

of global emissions. India’s emissions increased 65% between 1990 and 2005 and are

projected to grow another 70% by 2020. By other measures, India’s emissions are low

compared to those of other major economies. India accounts for only 2% of cumulative

energy-related emissions since 1850.

On a per capita basis, India’s emissions are 70% below the world average and 93% below

those of the United States. India remains home to the world’s largest number of poor

people, with nearly 35% living on less than a dollar a day. Its economy is growing rapidly,

however, with GDP rising about 8% a year over the past five years. As the economy has

grown, emissions intensity (GHGs per unit of GDP) has declined significantly. India’s GHG

intensity is currently 20% lower than the world average (and 15% and 40% lower than the

United States ’and China’s, respectively). Factors contributing to the decline in energy

intensity include improved energy efficiency, increased use of renewable and nuclear

power, expanded public transport, and energy pricing reform.

With rapid economic growth, rising income, and greater availability of goods and services,

energy demand rose 68% between 1990 and 2009, about 3.5% annually.3 The government

28

projects energy demand growth of 5.2% a year for the next 25 years, driven by annual GDP

growth rates of 8-10%. Coal accounts for 39% of total primary energy demand, followed by

biomass and waste (29%), oil (25%) and natural gas (5%). The high proportion of biomass

and waste reflects the fact that some 500 million people have no access to electricity or

other modern energy services. Coal is projected to remain the primary energy source, with

demand growing nearly three-fold by 2030.

As in many other countries, India has a number of policies that, while not driven by climate

concerns, contribute to climate mitigation by reducing or avoiding GHG emissions. (Specific

estimates of the emission impacts of the policies described below are in most cases not

available. However, a recent analysis by The Energy and Resources Institute (TERI)

concluded that in the absence of a number of energy policies that are currently being

implemented, CO2 emissions would be nearly 20% higher compared to business as usual

scenarios in both 2021 and 2031.).

Many of these policies are contained in the Five Year Plans developed by the Planning

Commission to guide economic policy in India (the 11th Five Year Plan covers 2007-

2012).9 Other policies are found in the Integrated Energy Policy approved by the Planning

Commission in 2006 with the broad objective of meeting energy demand “at the least cost

in a technically efficient, economically viable and environmentally sustainable manner.” In

June 2008, Prime Minister Singh released India’s first National Action Plan on Climate

Change outlining existing and future policies and programs addressing climate mitigation

and adaptation. The plan identifies eight core “national missions” running through 2017

and directs ministries to submit detailed implementation plans to the Prime Minister’s

Council on Climate Change by December 2008.

As per working paper titled “INCENTIVE-BASED APPROACHES FOR MITIGATING

GREENHOUSE GAS EMISSIONS” by Shreekant Gupta (October 2002), As a consequence of

the flexibility mechanisms incorporated in the Kyoto Protocol, incentive-based policies

such as emissions trading and the clean development mechanism are being widely

discussed in the context of greenhouse gas (GHG) abatement. This paper examines various

29

issues related to incentive-based approaches for India. Some of the specific questions it

addresses are: does India stand to gain or lose if emission trading is realized even if it

remains outside such an arrangement? Are there any other incentive-based approaches,

e.g., carbon taxes that India could adopt? In the ultimate analysis, however, market-based

instruments (MBIs) for GHG abatement in India cannot be viewed in isolation from an

overall incentive-based orientation towards environmental policy as well as broader

economic and legal reform that creates a suitable milieu for MBIs. Therefore, the paper

goes on to examine problems of implementing MBIs in general, particularly those related to

monitoring of emissions and of enforcement. Several specific solutions are also proposed.

MBIs can be broadly classified in two groups: price-based instruments and quantity-based

instruments. While all of these instruments can be used to address a wide range of

environmental problems, they are discussed below primarily in terms of their application

to greenhouse gas (GHG) abatement. Within the first group, one can further differentiate

between direct and indirect price-based instruments. The former induce generators of

pollution to reduce pollution by charging for the use environmental resources, e.g., air and

water. Indirect price-based instruments on the other hand, increase (decrease) the prices

of outputs and inputs that are complementary (substitutes) to the polluting activity. For

example, a tax on petrol (or a subsidy to mass transit) is an indirect price-based instrument

to address industrial air pollution.

According to the paper titled “IMPLICATIONS OF CO2 CAPTURE & STORAGE FOR GHG

INVENTORIES & ACCOUNTING” by William Kojo Agyemang-Bonsu (Ghana), A.M. Al-Ibrahim

(Saudi Arabia), Carlos Lopez (Cuba), Gregg Marland (United States), Huang Shenchu

(China), Oleg Tailakov (Russian Federation), the IPCC Guidelines and Good Practice

Guidance reports (GPG2000 and GPG-LULUCF) are used in preparing national inventories

under the UNFCCC.

These guidelines do not specifically address CO2 capture and storage, but the general

framework and concepts could be applied for this purpose. The IPCC guidelines give

30

guidance for reporting on annual emissions by gas and by sector. The amount of CO2

captured and stored can be measured, and could be reflected in the relevant sectors and

categories producing the emissions, or in new categories created specifically for CO2

capture, transportation and storage in the reporting framework. In the first option, CCS

would be treated as a mitigation measure and, for example, power plants with CO2 capture

or use of decarbonized fuels would have lower emissions factors (kgCO2/kg fuel used) than

conventional systems. In the second option, the captured and stored amounts would be

reported as removals (sinks) for CO2. In both options, emissions from fossil fuel use due to

the additional energy requirements in the capture, transportation and injection processes

would be covered by current methodologies.

Methodologies to estimate monitor and report physical leakage from storage options

would need to be developed. Some additional guidance specific to the systems would need

to be given for fugitive emissions from capture, transportation and injection processes.

Conceptually, a similar scheme could be used for mineral carbonation and industrial use of

CO2. However, detailed methodologies would need to be developed for the specific

processes. Quantified commitments, emission trading or other similar mechanisms need

clear rules and methodologies for accounting for emissions and removals. There are

several challenges for the accounting frameworks.

Firstly, there is a lack of knowledge about the rate of physical leakage from different

storage options including possibilities for accidental releases over a very long time period

(issues of permanence and liability). Secondly, there are the implications of the additional

energy requirements of the options; and the issues of liability and economic leakage where

CO2 capture and storage crosses the traditional accounting boundaries.

Information on pollutant emissions is usually compiled in ‘emission inventories’. Emissions

are listed according to categories such as pollutants, sectors, and source and compiled per

geographic area and time interval. Many different emission inventories have been prepared

for different purposes.

31

RESEARCH METHODOLOGY

The methodology for carbon footprint assessment has been undertaken from essential

components from WBCSD GHG Protocol and ISO 14064 Guidelines. Six essential broad

steps have been identified to arrive at the carbon footprint and ultimately the carbon assets

and liabilities of ACL.

1: Identification of GHG source, sink/ reservoir

A. Greenhouse Gas (GHG) – Six gases are identified as carbon dioxide (CO2), methane

(CH4), nitrous oxide (N2O), Hydroflourocarbons (HFCs), Perflourocarbons (PFCs)

and sulphur hexafluoride (SF6).

B. GHG source- Physical unit or process which releases a GHG into the atmosphere and

categorized as scope 1, 2 or 3 emission source.

C. GHG sink- Physical unit or process that absorbs a GHG from the atmosphere. Thus

process and units in ACL which are the potential GHG source and sink were

identified.

2: Defining Organizational & Operational Boundary

Business operations vary in their legal and organizational structures. In setting

organizational boundaries, a company selects an approach for consolidating GHG emissions

and then consistently applies the selected approach to define those businesses and

operations that constitute the company for the purpose of accounting and reporting GHG

emissions. Setting up Organizational boundary: For corporate reporting, two distinct

approaches are used to consolidate GHG emissions. They are Equity Share Approach &

Control Approach which has been defined below.

32

A. Equity share approach: A company accounts for GHG emissions from operations

according to its share of equity in the operation. The equity share reflects economic

interest, which is the extent of rights a company has to the risks and rewards

flowing from an operation.

B. Control approach: A company accounts for 100% of the GHG emissions from

operations over which it has control. It does not account for GHG emissions from

operations in which it owns an interest but has no control.

Now here control can be defined in two ways:

A. Financial Control: A company has financial control over the operation if it has the

ability to direct the financial and operating policies with a view to gaining economic

benefits from its activities. Financial control usually exists if the company has the

right to the majority of benefits of the operation, however these rights are conveyed.

A company is also considered to financially control an operation if it retains the

majority risks and rewards of ownership of the operation’s assets.

B. Operational Control: A company has operational control over an operation if it or

one of its subsidiaries has full authority to introduce and implement its operating

policies at the operation. Usually if the company or its subsidiaries is the operator of

a facility, it will have full authority to introduce and implement its operating

policies.

Determination of Operational Boundary for the purpose of Carbon Footprint Estimation:

After determination of organizational boundaries, the organization shall establish its

operational boundaries. The establishment of operational boundaries includes identifying

GHG emissions and removals associated with the organization’s operations, categorizing

GHG emissions and removals into direct, energy indirect and other indirect and choosing

33

which of the other indirect emissions will be quantified monitored and reported. It would

be implemented by:

A. Site visit to the different units of ACL

B. Identification & simplification of boundary into components for identifying GHG

emission sources (direct & indirect).

C. Study and analysis of each identified component such as Equipment’s, Energy

consumption & Materials consumed in the process

D. Quantification of the energy consumed during the whole operation procedure

3: Data Collection Approach

A. Collection and assimilation of data on the energy consumption of each component

(preferably equipment-wise) of the plant- past 1 year.

B. Collection and assimilation of data on the material flow in each section (preferably

equipment-wise) of the plant- past 1 year.

4: Layout of Calculation Methodology

A. Calculation of GHG emissions within each identified component of the unit based on

collected data (equipment wise)

B. Mass and Energy balance for entire process

C. Estimation of specific energy and mass consumption for each sub process

34

D. Estimation of emission factor for the process.

E. Estimation of total GHG emission.

F. Guidelines for monitoring GHG emission and development of strategy.

G. Guidance for setting up of GHG manual, GHG reduction target as per WBCSD

protocol/ ISO14064.

5. Determination of Carbon Footprint

This step consists of identification of areas of high emissions and suggestions for energy

consumption reduction in the same.

ACL is a major chemical producing company and hence a major GHG emitter. The annual

GHG emissions of ACL stand at around 2.44 million tCO2 per annum due to consumption of

fossil fuel and electricity. The main drivers for ACL for carbon footprint estimation were:

A. Carbon footprint will identify the energy intensive processes, equipments and

operations. Improvements in these processes, equipments and operations will lead

to lower energy and raw material consumption and hence increased level of

understanding of better cost cutting and revenue enhancement opportunities across

the organization's value chain.

B. This is especially true for energy intensive processes of soda ash, cement and

fertilizer manufacturing and power plant operations. Proper implementation of

energy efficiency/ GHG abatement measures to further upgrade processes and

equipments will generate cost savings from improved operational efficiencies and

reduced consumption.

35

C. There is opportunity to understand the current position in lieu of anticipated

emissions trading and GHG emissions regulations and reporting requirements, e.g.

Carbon Disclosure Project and Carbon Tax impositions thereby managing the

climate change risk effectively.

D. Better and effective management of stakeholder expectations can be done (e.g.,

meet expectations of customers, shareholders and financial institutions). A green

image of ACL will help in strengthening investor relationship.

E. Fortification of the reputation and brand image of ACL.

F. Improvement of the market positioning of ACL in terms of sustainability, brand,

products and services. In fact many institutional customers are more inclined to

purchase goods which are environment friendly.

Figure: - The brief methodology that was followed

Here maximum priority was given to operational boundary set up since the industry under

consideration was chemical industry and prioritizing the potential area was of maximum

importance. Data collection was taken as 3rd major priority since the analysis was based on

data collection and analysis had to be inclined towards estimation of carbon footprint of

AQUASUB CHEMICALS LIMITED.

INTRODUCTIONOPERATION BOUNDARY

SET UP

DATA COLLECTION

ANALYSISWAY

FORWARD

36

CASE STUDY: - GHG ACCOUNTING/CARBON FOOTPRINT

ESTIMATION OF AQUASUB CHEMICALS LIMITED, HALDIA,

WEST BENGAL.

BRIEF INTRODUCTION ABOUT THE ORGANISATION:-

The Aquasub Chemical Limited, also known as ACL, is the country’s largest producer of

inorganic chemicals. Over the last two years, the company has witnessed several

acquisitions and mergers which have catapulted it to become the world’s second largest

Soda-ash manufacturing company with a unique diverse portfolio of value creating assets

and brands. The company is the only soda-ash manufacturer to have a strong-hold in 4

continents. Although the mainstay of ACL is production of soda-ash, ACL also specializes in

the production of other inorganic chemicals such as sodium bicarbonate, nitrogenous and

phosphate fertilizers, sodium tri-poly phosphate, cement and packaged salt. Some of the

major achievements of ACL over the last year are. The chemicals’ business of ACL achieved

the highest sales ever, reflecting a growth of 4.42% as compared to the previous year. ACL

is the Indian market leader in edible salts and soda ash. The company acquired one of the

major soda-ash players in USA, General Chemical Industrial Products (GCIP), which

catapulted it to the position of the third largest soda-ash producer in the world along with

opening of new avenues for the group. ACL is the most energy efficient urea manufacturer

in India. The two main strategic business units (SBUs) of ACL include chemicals and

fertilizers. Fertilizers are manufactured in India while the company has chemical

manufacturing plants spread all over the globe.

BRIEF DESCRIPTION ABOUT THE ACL HALDIA PLANT:-

The Haldia plant is primarily involved in the manufacturing of fertilizers and chemicals.

The integrated manufacturing produces various chemicals such as sulphuric acid,

phosphoric acid and phosphatic fertilizers which include sodium tri-poly phosphate

(STPP), di-ammonium phosphate (DAP), Nitrogen-Phosphorus-Potassium (NPK)

complexes and single super phosphate (SSP) fertilizer. The plant is the largest producer of

37

STPP, a building component of detergents in India. The product mix and technology used

for manufacture of each product is as below:

A. Sulphuric Acid by Double Conversion Double Absorption Process

B. Phosphoric acid by Dihydrate Process

C. STPP by Wet process from soda ash

D. Single super phosphate by Total H2SiF6 recycles process

E. DAP/ NPK complexes

F. Linear Alkyl benzene sulphonic acid (LABSA)

ACL has a global visibility with various acquisitions and subsidiaries located across the

globe. One of them is Brunner Monde Group (U.K).

Brunner Monde Lostock & Winnington (U.K)

Brunner Monde is the only U.K. Producer of sodium carbonate (soda ash) and sodium

bicarbonate. It has soda ash plants at Lostock (Greater Manchester) and Winnington (North

London). The Winnington Plant is one of the most efficient power plants in Europe with a

combined thermal and electrical efficiency of 85% resulting in total CO2 emission

reduction from 900000 tonnes/year to 750000 tonnes/year. The power and steam to both

these plants are supplied by the combined heat and power (CHP) plant in Northwich,

Cheshire, London, is one of the largest such schemes in the UK. The CHP plant is owned and

operated by POWERGEN (now EON) is capable of supplying approximately 500 tonnes of

steam every hour and generating 130MW of electricity. Brunner Monde consumes only 25

MW of the generated 120 MW and the remainder is exported to National Grid.

Brunner Monde Delfzijl Plant (NETHERLANDS) The Delfzijl unit in North-east of Amsterdam Netherlands, has a capacity of 50,000

tonnes/year of sodium bicarbonate. The plant became operational in June 2008 and serves

the pharmaceuticals and food industries. The plant uses surplus carbon dioxide from the

soda ash plant as one of its raw materials – which improves the air quality, as well as

enhances the efficiency of the whole manufacturing complex.

38

General Chemical Industrial Products (USA)

General Chemical Industrial Products (GCIP) is one of the top five global producers of soda

ash. GCIP was acquired by Aquasub Chemicals in January 2008, making the company the

second largest soda ash producer in the world. GCIP mines the Green River basin in

Wyoming, USA, for naturally occurring deposits of trona (an ore containing soda ash). The

site is estimated to contain 134 billion tonnes of trona, enough to meet global soda ash

demand for hundreds of years at current levels of consumption. GCIP produces natural

soda ash, which requires much less energy, capital and raw materials than synthetic soda

ash production.

Relevant Standards for Carbon Footprint Assessment

DESCIPTION GHG PROTOCOL INITIATIVE ISO 14064

Salient Features

Developed for businesses through

an inclusive and transparent

multi stakeholder process

comprising of 350+ stakeholders

(incl. Businesses, NGOs,

governments and Inter

Government organizations.

Consists of a set of unambiguous

and verifiable requirements or

specifications to support

organizations and proponents of

GHG emission reduction projects.

Aims to achieve clarity and

consistency between those

reporting GHG emissions and

stakeholders.

Types of Standards Accounting and Reporting

Standard (Guide for companies to

use in quantifying and reporting

their GHG emissions) GHG

Protocol Project Quantification

Standard (Guide for quantifying

reductions from GHG mitigation

projects)

ISO 14064-1:2006,

Greenhouse gases –

Part 1, specifies requirements for

designing and developing

organization or entity-level

GHG inventories.

Part 2, details requirements for

quantifying, monitoring and

reporting emission reductions

and removal enhancements from

GHG projects.

Part 3, Guidance for conducting of

validation & verification.

39

BASE YEAR SELECTION:-

The process of planned abatement of GHG emissions starts off with identification of sources

and quantification of the emissions which can also be termed as inventorization. The GHG

inventory process is an exhaustive and comprehensive analysis of the existing activities

involved and their respective climate change implications (or GHG emissions). Companies

may need to track emissions over time as a requirement of a variety of business goals, such

as public reporting, establishing GHG targets, managing risks and opportunities and

addressing the needs of investors and other stakeholders. The preliminary use of the GHG

inventory is towards arriving at futuristic abatement, mitigation and management

strategies. A meaningful and consistent comparison of emissions over time requires that

companies set a performance datum with which to compare current emissions. This datum

is the base year. For consistent tracking of emissions over time, the base year emissions

may need to be recalculated as companies undergo significant structural changes such as

acquisitions, divestments, and mergers.

The selection of an appropriate base year is attributed to the availability of verifiable GHG

emissions and/or removals data for that year. The base year may either be a single year

data or a multi-year average or rolling average data. However, once a base year is selected,

the same should be documented with reasons responsible for its selection.

VALIDITY OF BASE YEAR & RECALCULATION:- The documentation of the base year selection process should also include the detailed

procedure to be followed by the company to allow the base year GHG inventory to remain

valid as a comparative tool. The base year inventory shall be recalculated if significant

changes occur to base year GHG emissions or removals as a result of changes to operational

boundaries, ownership and control of GHG sources/sinks transfers into/out of

organizational boundaries and changes to GHG quantification methodologies will result in

significant changes to GHG emissions or removals. However the base year GHG inventory

shall not be recalculated to account for changes in facility production levels.

40

DATA COLLECTION & PROCESSING METHODOLOGY:-

Data collection forms the corner-stone of GHG inventory process. In order to report

corporations total GHG emissions, the companies would be required to gather and collate

data from multiple sources. The data collection procedure should be enshrined with the

five fundamental principles of GHG accounting and reporting which are:

A. Relevance

B. Completeness

C. Consistency

D. Transparency

E. Accuracy

Following the process of setting up of the organizational and operational boundaries and

further identifying the scope of emissions, the data collection procedure begins. The data

collection approach may either be a centralized or a decentralized approach. The

centralized approach demands that the individual facilities report activity/fuel use data to

the corporate (central level) wherein emissions are calculated, whereas the decentralized

approach as the name suggests involves individual organizations to directly calculate their

emissions using approved methods and reporting the same to the central authority. In

order to maximize accuracy and minimize reporting burdens a combination of the two

approaches can also be selected. The collection of authentic data is one of the key

constraints in developing the GHG inventory. To ascertain the quality of data the following

data collection tools may be used:

A. Secure databases available over company intranet or internet, for direct entry by

facilities.

B. Spreadsheet templates filled/ mailed to the corporate office where data is further

processed

C. Paper reporting format

41

For arriving at the GHG emission inventory for ACL using a decentralized approach, the

data collection has been done using spreadsheets. A preliminary understanding of the

process flow diagrams has been used to develop customized data collection templates from

the plant facilities.

CALCULATION AND ANALYSIS OF CARBON FOOTPRINT OF ACL:-

The procedure followed for Carbon Footprint Estimation exercise has been adopted to

ensure maximum possible completeness transparency and conservativeness in terms of

identifying the sources of GHG emissions as well as the data collection and analysis

procedures.

Assumptions in the calculations

The relevant assumptions in the estimation of Carbon Footprint of ACL are as follows:

A. The study considers IPCC 2006 default values of emission factors and net calorific

values of fossil fuels in absence of locally measured or country specific values.

B. For inter-conversion of units of measurements, standard conversion factors have

been used.

C. For calculation of emissions due to transportation of products over rail, emission

factor for transportation of products by rail has been sourced from WBCSD.

D. For calculation of emissions due to transportation of products by road in diesel

trucks, a standard mileage value of 3 km/l has been assumed.

E. For calculation of emissions due to travel of employees by air, emission factor for

transportation of passengers by air has been sourced from WBCSD.

42

F. For calculation of emissions due to travel of employees by road, a standard mileage

value of 12km/l has been assumed.

G. Indirect emissions for the sake of calculation complication have been neglected,

though their effects have been duly considered.

Fossil Fuel Emission Factor(tCO2e/TJ) Net calorific value

Natural Gas(Gaseous) 56.1 0.048

Naptha 73.3 0.0445

Natural Gas(Liquid) 64.2 0.0442

LDO/HSD 74.1 0.043

Furnace Oil 77.4 0.0404

LPG 63.1 0.0473

Coal 96.1 0.0189

Pet Coke 97.5 0.032

Coking Coal 96.4 0.0282

Table 2:- List of IPCC factors for fossil fuels and emission factor of transportation used for

calculations

Mode of Transportation WBCSD Emission Factor

Emission factor of transportation by

Railway

0.02kg CO2/MT-km

Emission factor of air-travel of passengers Depends on the distance between source

and destination.

Table :- Emission Factor consideration as per WBCSD norms

43

CARBON FOOTPRINT AT HALDIA FACILITY:-

Direct Emissions from Haldia Facility:

The Haldia plant consists of the sulphuric acid plant, phosphoric acid and phosphatic

fertilizer plants which include sodium tri-poly phosphate (STPP) plant, di-ammonium

phosphate (DAP) plant, Nitrogen-Phosphorus-Potassium (NPK) complexes and single

super phosphate (SSP) fertilizer manufacturing plant. The carbon footprint of Haldia

Facility has been calculated considering the GHG emissions associated with operation of the

manufacturing processes and inbound and outbound logistics for transportation of

products.

OPERATIONAL BOUNDARY CONSIDERED FOR ACL, HALDIA UNIT

Fig: - Pictorial Representation of ACL PLANT, HALDIA

AQUASUB CHEMICALS, HALDIA UNIT

CO2& other emissions

Sulphuric Acid & Phosphoric Acid

DAP. NPK, SSP

44

Name of Unit Emission due to Electricity

Consumption tCO2

Emission due to

direct fossil fuel

combustion tCO2

Emission due to

steam consumption

tCO2

Total

% of

total

emission

Direct Emission

Sulphuric Acid Plant 4699 2153 0 6852 10.9359

Phosphoric Acid

Plant 4320 0 0 4320 6.894791

STPP Plant 6105 14001 0 20106 32.0895

LABSA PLANT 597 0 0 597 0.952822

SSP Plant 2373 0 0 2373 3.787347

DAP+NPK Plant 19301 9106 0 28408 45.33963

TOTAL 37395 25260 0 62656 100

Table: GHG Inventory of the Haldia Facility-Direct Emissions

* Steam consumed in Haldia Plant is generated from Waste Heat Recovery Boilers, hence GHG emissions due

to steam consumption is zero.

Indirect Emissions from Haldia Facility:-

Indirect emissions are those where the GHG inventory is not effected directly like:-

A. Emissions due to business travel of employees by road

B. Emissions due to business travel of employees by air

C. Emissions due to inward and outward bound logistics by road

D. Emissions due to inward and outward bound logistics by rail

Parameters Tonnes of CO2

Indirect Emission (Road Travel) 19

Indirect Emission (Air Travel) 60

In Logistics 23

Out Logistics (Rail) 16652

Out Logistics (Road) 6655

Total 23408

Table: - GHG Inventory due to Logistics & Travel, Haldia-Indirect Emissions

45

Fig: - Showing the percentage of total emission (direct emission)

Fig: - Showing percentage of total emission (indirect emission)

Emission Factor of Haldia plant: As the source of electricity is the eastern regional grid

of India, emission factor of the same grid has been assumed from CEA.

Sulphuric Acid

Plant

11%

Phosphoric Acid

Plant

7%

STPP Plant

32%

LABSA PLANT

1%

SSP Plant

4%

DAP+NPK Plant

45%

0% 0% 0%

71%

29%

Indirect Emission (Road Travel) Indirect Emission (Air Travel)

In Logistics Out Logistics (Rail)

Out Logistics (Road)

46

Name CO2 Emission Factor Source

Eastern Regional Grid (tCO2/MWh) 0.80 CEA Database

Table: - Electricity Emission Factor of Haldia Facility

Hence from the carbon footprint study at ACL Unit, Haldia, emission from (DAP +NPK)

plant is maximum in case of direct emissions while emissions from logistics freight by

Railways is maximum in case of indirect emission.

The footprint for ACL has been calculated based on the monitored plant data as provided

by ACL. In cases of unavailability of data there could be deviation leading to some

difference between the actual and the estimated emission calculations. The most

conservative estimate has been taken in such a case and standard values or IPCC default

values have been considered. The following parameters have been taken into consideration

while calculating the GHG inventory of the different chemical plants:

Emission Factors- The carbon percentage of the fuel in use are unavailable. So the

emission factors of Natural Gas, Naphtha, Pet Coke, LDO and Coal have been taken from the

IPCC 2006 guidelines.

Net Calorific Value of the fuel -In cases of unavailability of plant data the default Net

Calorific Value (from IPCC) values of the fuel into consideration has been taken. The Net

Calorific Value of Natural Gas, Naphtha, Pet Coke, LDO and coal have been taken from the

IPCC 2006 guidelines.

Density of the fuel -In cases where the density of the fuels is unavailable, it has been taken

from an authentic source or it has been calculated from the fundamentals. In Haldia the

density of Natural gas has been taken to be 0.667 kg/Sm3 (calculated).

Fossil fuel consumption –In case of unavailability of monthly data for fossil fuel

consumption, average hourly data (kg/hour) along with average operational hours for the

months (hour/month) have been used to calculate the fossil fuel consumption.

47

RESULTS & DISCUSSION

From the project activity, potential areas of increasing CO2 emissions were identified, both

for direct emissions and both for indirect emissions. Now the question arises, are there any

mitigatory measures? In this section we would discuss about the abatement measures and

necessary GHG strategy.

GHG Abatement Strategies in the Chemicals SBU of ACL

Short term Strategy:-

Energy efficiency improvement in production of chemicals such as sulphuric acid,

phosphoric acid and phosphatic fertilizers which include sodium tri-poly phosphate

(STPP), di-ammonium phosphate (DAP), Nitrogen-Phosphorus-Potassium (NPK)

complexes and single super phosphate (SSP) fertilizer. The plant is the largest producer of

STPP, a building component of detergents in India.

ACL may implement Nano-filtration (NF) technology for purification of brine used in the

soda ash plant. Due to unavailability of raw water, ACL presently uses sea water as source

of raw water. Owing to the high percentage of calcium and magnesium salts, ACL is

required to treat the raw sea water to remove salts. Thereafter, salt dissolves externally in

a static salt dissolver to increase the percentage of sodium chloride in sea-water. The NF

plant proves to be an effective technology for sea-water purification utilized for brine

preparation and purification. It is similar to a reverse osmosis plant consisting of:-

1. Conventional pretreatment unit

2. Nano Filtration membranes skid

Prior to passing through NF membranes skid, the sea water will pass through cartridge

filters to ensure that zero turbidity water enters the Nano filtration unit. The NF membrane

will remove the bivalent ions present in the seawater; Ca, Mg, SO4 while allowing maximum

chloride ions to pass through it.

48

Replacement of the 4-stage Calciner to a 6 stage Separate Line Calciner (SLC) coupled with

the use of high efficiency coolers will result in improvement in the thermal energy

efficiency and lead to reduction in overall GHG emissions. The presence of the additional

two stages will result in additional heat transfer to the kiln feed and reduce pre-heater

exhaust temperature. Coal combustion will also improve in the new SLC using the hot

tertiary air from the kiln hood. This will reduce the specific coal consumption, the quantity

of air requirement, the pre-heater gas volume and consequently the energy consumption of

the circulation system. The cumulative effect is a net reduction in emissions of GHGs to the

tune of 0.06tonne CO2/kg of clinker.

Proper redesigning of the grate system of the existing Cooler has the potential to increase

the cooler recuperation efficiency i.e. higher quantity of heat will be utilized in clinker

cooler. The technology involves retrofitting of the clinker cooler for effective trapping of

the heat in the clinker cooler. New clinker inlet distribution system is used to distribute the

clinker on the grate. Due to the benefits of the inlet grate system the proper cooling of inlet

will take place with additional benefit of high temperature tertiary air ducts. The

application of this technology at the cement plant will help to achieve a shift towards low

carbon path which can leverage financing through\ carbon revenue. Approximately 20

kCal/kg of clinker of thermal energy savings and is possible by application of this

technology.

The waste heat generated from the clinker-cooler exit-gas and pre-heater exit gas may

be captured in waste heat recovery boilers to generate steam. The steam can generate

power via a steam turbine using Rankine Cycle thus displacing the GHG intensive power

generation in the coal based captive power plant production facility. The effective

utilization of the waste gases which would otherwise have been vented into the

atmosphere for power generation is a major GHG abatement initiative that may be adopted

at the cement plant.

49

Fig: -Representative Diagram of utilization of clinker cooler gas for power

Generation

Injection of superheated steam into the compressor discharge upstream of combustion

chambers will increase the mass flow to the turbine section. This will result in increased

power output. The modification will result in added mass flow into the turbine without

considerable increase in compressor power consumption. This will result in lower specific

fuel consumption and an improved heat rate. Under usual conditions, turbine output

decreases with ambient temperature. Thus the steam injection modification can maintain

the higher output even at higher temperatures. The maximum steam injection possible for

power generation improvement is approximately 5% of compressor air flow for a typical

Frame V gas turbine that can be retrofitted with steam injection system19. Excess steam in

the fertilizer complex may cater to the superheated steam requirement of the steam

injection modification. As per estimates from BGGTS (joint venture between BHEL and GE)

a typical Frame V gas turbine having a steam injection

50

rate of approximately 5% compressor airflow may result in reduction of heat rate by

7.2% vis-à-vis an increase of 2-3MW in power generation.

Medium term abatement Strategies

From the viewpoint of an organization such as ACL, production of bio-fuels is an important

opportunity of reducing the overall GHG impact. The potential is considerable at close to

2.1 to 2.2 tonnes of carbon dioxide for every tonne of bio-diesel production. Bio-diesel

produced may be used in a number of ways to displace the consumption of GHG intensive

fossil based diesel oil. These include:

A. Substitution of diesel in vehicles used for company travel.

B. Substitution of diesel in transportation of raw materials and products

C. Sale of bio-diesel for road based or rail based transportation purposes

Based on the technology selection for bio-diesel production, the production costs may be

quite high. This is a crucial factor as in all likelihood, to remain competitive in the petro-

diesel dominated market in India; ACL may have to sell bio-diesel at prices comparable to

that of petro-diesel irrespective of the higher production costs. The role of carbon credits in

plugging the gap between the production costs and selling price of bio-diesel will be an

important factor determining the feasibility of the venture.

Utilization of the wind energy for power generation using a wind turbine holds significant

potential for GHG abatement that may be adopted in manufacturing facility. Clean

electricity may be generated with zero emissions by harnessing the wind power potential

of the site where the wind based power plant would be set up. As the plant is located on the

western coast of India, the wind patterns may be favorable for setting up a wind energy

based generation system.

Biomass based power generation refers to the process that generates energy in the form of

electricity or heat from a biomass source like bamboo, rice husk and other agro/forest

residues. Such technologies reduce fossil fuel consumption and decrease GHG emission

51

Long term abatement Strategies

Brunner Monde Lostock & Winnington (U.K) has been one of the most energy efficient

chemical plant in UK. Hence the energy efficiency measures and steps followed by the plant

could be implemented here in India as well. Brunner Monde’ Netherlands could also be an

ideal example while implementing energy efficiency measures

Tidal energy from the motion of ocean tides can be trapped and effectively utilized for

clean power generation. Tidal barrage systems are technically feasible, utilizing

conventional low head hydro turbines and dams/barrages. Adoption of renewable power

generation technology replacing the power generation from the existing coal based captive

power plant is a GHG abatement initiative resulting in GHG emission reductions to the tune

of 0.7 tCO2/MWh. Proximity of the plant location to the Arabian Sea will play a significant

role in working out the feasibility of harnessing the ocean waves to generate electricity and

displace fossil fuel based generation.

Geothermal energy i.e. the heat contained within the Earth that generates geological

phenomena on a planetary scale can be captured and utilized for power generation.

‘Geothermal energy’ is often used nowadays, however, to indicate that part of the Earth's

heat that can, or could, be recovered and exploited by man. The steam and water captured

beneath the earth’s surface is separated and electricity generation mainly takes place in

conventional steam turbines. Conventional steam turbines require fluids at temperatures

of at least 150 °C. The steam, direct from dry steam wells or, after separation, from wet

wells, is passed through a turbine and exhausted to the atmosphere. About 0.77

tCO2e/MWh of GHG abatement can be achieved through implementation of this measure

Soda ash production by calcination of trona ores is less GHG intensive as compared to the

production by Solvay process. Hence, a shift in the production from Solvay to natural trona

calcinations will result in reduction of carbon dioxide emissions capacities of soda ash after

due evaluation of the carbon liability of Solvay Process vis-à-vis trona calcination. This is

thus a very important consideration.

52

CONCLUSION

From the case study it was evident that chemical industry was one of the most vulnerable

industries and thereby made significant contributions as GHG emitter. It was also seen that

the share of indirect emissions were higher as compared to the direct emissions from the

chemical plant itself. Hence a short term, long term and long term GHG abatement strategy

was required so that GHG emission could be significantly reduced. For that more and more

emphasis was given on utilizing renewable energy sources which not only yielded clean

fuel but also saved national revenue. Now an obvious question that would arise as to why a

chemical industry requires knowing its carbon footprint estimates?

The exercise of carbon footprint will improve industry’s understanding of its emissions

profile and any potential GHG liability or “exposure.” A company’s GHG exposure is

increasingly becoming a management issue in light of heightened scrutiny by the insurance

industry, shareholders, and the emergence of environmental regulations/policies designed

to reduce GHG emissions.

Identification and quantification of the carbon assets and liabilities/risks of ACL which are

the two essential components for understanding climate change risk-return perspective of

ACL. Identification of potential opportunities of progressively reducing ACL’s present

carbon footprint through energy optimization, process modifications and improvements,

adoption of clean technologies (e.g. GHG capture and storage) and greening the supply

chain Identification of CDM/JI projects in different units and implementation of the same /

assessment of the CER/VER earning potential of the opportunities identified.

Let’s look what are the benefits of GHG Accounting/Carbon footprint analysis:-

A. Carbon footprint will identify the energy intensive processes, equipments and

operations. Improvements in these processes, equipments and operations will lead

to lower energy and raw material consumption and hence increased level of

53

understanding of better cost cutting and revenue enhancement opportunities across

the organization's value chain.

B. Proper implementation of energy efficiency/GHG abatement measures to further

upgrade processes and equipments will generate cost savings from improved

operational efficiencies and reduced consumption.

C. There is opportunity to understand the current position in lieu of anticipated

emissions trading and GHG emissions regulations and reporting requirements, e.g.

Carbon Disclosure Project and Carbon Tax impositions thereby managing the

climate change risk effectively.

D. Better and effective management of stakeholder expectations can be done (e.g.,

meet expectations of customers, shareholders and financial institutions). A green

image will help in strengthening investor relationship.

E. Fortification of the reputation and brand image improvement since this will add

some value to the overall goodwill of the industry/organization.

F. Improvement of the market positioning of ACL in terms of sustainability, brand,

products and services. In fact many institutional customers are more inclined to

purchase goods which are environment friendly.

G. Participating in GHG markets – GHG emission profile also helps in participating in

carbon trade. This includes supporting internal GHG trading programs, Participating

in external cap and trade allowance trading programs, Calculating carbon/GHG

taxes.

H. To facilitate development and implementation of GHG management strategies and

plans as devised by top management

54

Now an obvious question that arises is how does the project contribute towards

sustainable development? Well in brief, the quantification of GHG emission of an industry

itself is a giant step towards attaining sustainable development. To add to that if the

abatement/mitigation strategies that have been recommended are followed proactively

then quantifying GHG emission would definitely be a part of attaining Sustainable

Development by an industry/organization.

Let’s get a brief idea about the basic principles of GHG Accounting:-

As we all know that carbon footprint of a company can be measured by accounting for its

GHG emissions or by GHG accounting. To ensure that reported data, information & related

disclosures provide a faithful, true, fair account of GHG emissions, removals, emission

reductions, removal enhancements, GHG quantification, monitoring, reporting, validation,

verification shall be based on the following principles:-

A. Completeness: All GHG emissions and removals within the chosen boundaries are

included. Any GHG emissions or removals not quantified and/or monitored are

disclosed and explained/justified.

B. Consistency: Consistent methodologies are used to permit meaningful comparisons.

Any changes to the methodologies, procedures or any other relevant factors are

disclosed and explained/justified.

C. Accuracy: Sufficient accuracy is achieved to enable users to make decisions with

reasonable assurance as to the integrity of quantification & of reported information.

Uncertainties are reduced as far as practical.

D. Transparency: All relevant issues are documented and disclosed in a factual and

coherent manner (based on an audit trail that allows users to judge it’s reliability).

Any relevant assumptions made and appropriate references to the quantification

methodologies and data sources used are disclosed.

55

E. Relevance: GHG quantification, monitoring and reporting methodologies are

appropriately selected to reflect GHG emissions/ removals and to serve the

decision-making needs of users.

Fig: - It represents the principles of GHG Accounting

Finally let’s look into the scope of the emission inventory:-

Direct (Scope 1) Emissions from fuel oil use, naphtha use, diesel use, LPG use, natural gas

use, coal use, electricity consumption and other fuels etc.

Indirect (Scope 2) Emissions from all electricity purchased for use in office buildings and

townships.

Indirect (Scope 3) Emissions from air travel, business travel in rental cars/ taxis, rail travel,

transport of raw materials and products by road rail, business travel by employees etc.

Completeness

Consistency

Transparency

Accuracy

Relevance

56

SCOPE AHEAD

Now there are a lot of scopes for improvement pertaining to analyzing carbon footprint.

The Guidelines for Multinational Enterprises are recommendations from governments to

business on responsible business conduct. Though the Guidelines do not specifically

address climate change, many of their recommendations reflect governments and societies’

expectations on what constitutes responsible business conduct in addressing climate

change. The Guidelines thus have an important role to play in helping build international

consensus and spread knowledge about advanced management practices in support of a

low carbon economy. This overview highlights recommendations which are relevant to

business action to address climate change.

Enterprises should contribute to economic, social and environmental progress with a view

to achieving sustainable development, develop and apply effective self-regulatory practices

and management systems that foster a relationship of confidence and mutual trust

between enterprises and the societies in which they operate. Enterprises should, within the

framework of laws, regulation and administrative practices in the countries in which they

operate, and in consideration of relevant international agreements, principles, objectives,

and standards, take due account of the need to protect the environment, public health and

safety, and generally to conduct their activities in a manner contributing to the wider goals

of sustainable development.

Consistent with the scientific and technical understanding of the risks, where there are

threats of serious damage to the environment, taking also into account human health and

safety, not use the lack of full scientific certainty as a reason for postponing cost-effective

measures to prevent or minimize such damage.

Enterprises should ensure that timely, regular, reliable and relevant information is

disclosed regarding their activities and performance. This information should be disclosed

for the enterprise as a whole and, where appropriate along business lines or geographic

57

areas. Disclosure policies of enterprises should be tailored to the nature, size and location

of the enterprise with due regard taken of costs, business confidentiality and other

competitive concerns Enterprises are encouraged to communicate additional information

that could include: value statements or statements of business conduct intended for public

disclosure including information on the social, ethical and environmental policies of the

enterprise and other codes of conduct to which the company subscribes.

Enterprises should continually seek to improve corporate environmental performance, by

inter alia, such activities as: - development and provision of products and services that have

no undue environmental impacts, are safe in their intended use; are efficient in their

consumption of energy and natural resources; can be reused, recycled, or disposed of

safely; - promoting higher levels of awareness among customers of the environmental

implications of using the products and services of the enterprise.

When dealing with consumers, enterprises should act in accordance with fair business,

marketing and advertising practices and should take all reasonable steps to ensure the

safety and quality of the goods or services they provide. In particular, they should: - Ensure

that the goods or services they provide meet all agreed or legally required standards for

consumer health and safety, including health warnings and product safety and information

labels; - Provide accurate and clear information regarding their content, safe use,

maintenance, storage, and disposal sufficient to enable consumers to make informed

decisions; - Not make representations or omissions, not engage in any other practices that

are deceptive, misleading, fraudulent, or unfair.

Promoting a more systemic approach to climate change would not seek to reduce the

problem to marketing gimmicks, celebrity endorsements, technological quick-fixes, or neo-

colonial exploitation. Any individual, organization or government embracing this holistic

attitude would commit to doing everything they could to reduce their climate impact, but

would not offset responsibility for any of their remaining emissions. Rather they would

commit to demanding, adopting and supporting climate policies that reduce emissions at

source as opposed to offsets or trading. They would support stricter regulation and

58

oversight and penalties for polluters on community, local, national and international levels,

and they would commit to supporting communities adversely impacted by climate change

and so-called ‘climate-friendly’ projects. Finally they would endorse the notion that real

solutions to climate change require social change and they would count themselves to be a

part of that movement, spending time and energy towards achieving such change.

Fig: - Showing types of project and time needed to offset emissions

Use of Renewable Energy can be an ideal choice to reduce GHG Emission. As already

discussed, use of biomass, wind can be a good option to generate energy. In addition to that

it also gives an option to apply for TREC (Tradable Renewable Energy Certificate) which

can be traded and credits can be utilized in a positive way.

In fact, the speed with which we need to offset our emissions depends on two things:

First it depends on the impending nature of the climate crisis. Just how fast do we need to

reduce our emissions to stop global warming?

Second, it depends on the rate at which global carbon dioxide emissions continue to rise. If

emissions continue to go up, we need to offset even faster to meet reduction targets. Hence

the ideal solution regarding this issue would be to be categorizing the vulnerable areas and

then quantify the GHG emission and then depending upon the area where emission is

higher, suitable mitigating measure needs to be implemented, like opting for renewable

energy and ensuring that the methods/practices leads to sustainable development.

59

BIBLIOGRAPHY

Following journals/research helped to prepare this report:-

Babiker, M.H., J.M. Reilly, M. Mayer, R.S. Eckaus, I.S. Wing and R.C. Hyman (2001), ‘The MIT

Emissions

Prediction and Policy Analysis (EPPA) Model: Revisions, Sensitivities and Comparison of

Results’,

Report no. 71, MIT Joint Program on the Science and Policy of Global Change. Cambridge,

M.A. Burniaux, J.M., G. Nicoletti, and J.O. Martins (1992), ‘GREEN: A Global Model for

Quantifying the Cost of Policies to Curb CO2 Emissions’, OECD Economic Studies, no.19.

Paris.

Ghosh, Prodipto (1990). “Simulating Greenhouse Gases Emissions due to Energy Use by a

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Carnegie-Mellon University. Published by UMI, Ann Arbor, MI. Order No. DA9107559.

Robinson, Sherman et al (1999), ‘From Stylized to Applied Models : Building Multisector

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and Resources Institute (TERI), New Delhi.

Big Sky Carbon Sequestration Partnership and Brunner Monde Report (U.K) Durban 2010 FIFA World Cup Durban Carbon Footprint, Final Report. Future Work

Durban.

Following websites were referred while preparing this project:

http://www.marketwire.com/press-release/Greengold-Ray-Energies-Inc-923021.html

(Accessed on May 21st 2011)

http://www.global-greenhouse-warming.com/ISO-14064.html (Accessed on May 13th

2011)

http://www.climatevision.gov/sectors/cement/pdfs/44182.pdf (Accessed on May 12th

2011)

http://www.energyrating.gov.au/library/details200606-greening.htmt (Accessed on 2nd

May 2011)