Terms like “carbon neutral” and “net zero” are appearing on food labels and corporate brands around the world. In the third installment of “Climate change 101”, Carolien Samson, head of sustainable banking at Oxbury Bank Limited, discusses this concept in detail.
Nando’s in the United Kingdom has been proudly carbon neutral since the end of 2021 and the bottle of Kumala Chenin Blanc in my fridge is certified carbon neutral. But what does that mean exactly? We need to first understand how greenhouse gases are divided to see what is included in these claims.
The Greenhouse Gas Protocol divides emissions in three groups or scopes.
Scope 1 is direct emissions from energy sources that are owned or controlled by a business. The vast majority of emissions generated by a coal-powered electricity generator like Eskom are regarded as Scope 1. On a farm this may include an anaerobic digester, but also methane from animals.
Scope 2 emissions refers to the electricity, fuel, heat or steam purchased by a company for its own operations. On a farm this would include electricity purchased to heat or cool operations, fuel for trucks, tractors and other vehicles used by the business and electricity for irrigation systems.
Scope 3 emissions are found in a company’s value chain – from goods and services purchased, emissions from products sold during their further lifecycle, waste disposal, transport costs, etc.
On farms, this could include nitrogen emissions from fertiliser, animal feed purchased, animal and food waste, or transporting food to end-consumers and packaging.
Scope 3 emissions are often divided in upstream and downstream emissions. Upstream emissions come into the operation – on a farm it could be the emissions generated when fertiliser is made and delivered to the farm or emissions involved in producing animal feed. Downstream emissions occur after the produce leaves the operation.
Examples include packed fruit and vegetables transported via road and ships or planes, food waste ending up in landfill and emissions created when food packaging is made.
The other distinction in scope 3 emissions is between direct and indirect emissions. An example of a direct emission for a business is emissions generated by employees travelling to and from work.
It could also be the costs of using a remotely managed computer system – the company data may be in the cloud, but it takes a lot of energy to run and cool data centres. Emails may save paper, but they still have a carbon footprint! Indirect Scope 3 emissions are nor directly linked to the company’s daily activities.
When is an operation carbon neutral?
A business is carbon neutral when it balances the greenhouse gases it emits through its operations with the same amount removed or absorbed from the atmosphere. A carbon negative operation emits more greenhouses gases in the atmosphere than it absorbs or removes.
So, the first question to ask when a business makes a claim about being carbon neutral is to confirm the extent of emissions included in the definition. Let’s take Nando’s in the United Kingdom as an example. The process starts by using a carbon calculator to determine the carbon footprint of the operation. I’ll cover this in the next instalment as there are a multitude of these calculators available.
Nando’s in the United Kingdom doesn’t generate scope 1 emissions as it is not an energy company. Its scope 2 emissions include the electricity used in the restaurants to light them, run equipment like fridges and stoves and fuel purchased for trucks and delivery vehicles owned by Nando’s. The company has to record the volume and type of energy used at each of its operations and these will be used in a calculator.
Nando’s is using renewable energy at all its businesses in England, Scotland and Wales which would have reduced its scope 2 emissions significantly. It could also change to electric vehicles charged from renewable sources to improve its Scope 2 emissions in time.
In terms of scope 3 emissions, they aim to recycle 70% of their own waste as a start. This will cut down on emissions generated when the food waste ends up in a landfill. They could also focus on reducing or changing packaging.
Although Nando’s is working with farmers and suppliers to cut the emissions in their value-chain, these have not been included in their carbon calculations. Their claim is only for their direct scope 2 and scope 3 emissions. This is pretty much the norm for companies at the moment as only direct emissions are included in carbon neutral statements.
But Nando’s still have emissions, so how do they balance the remaining ones to get “neutral”? They pay projects that remove and absorb emissions from the atmosphere to do this on their behalf in the form of carbon offsets. Once they have confirmation that sufficient carbon emissions have been removed, Nando’s is able to state that they are carbon neutral. Offsets have a jargon all by themselves – which I will discuss in future installments of “Climate change 101”.
By the way, Nando’s in the United Kingdom has an excellent carbon jargon page on their website which explains the confusing terminology in inimitable Nando’s style!
Click here to read more.
Are farms carbon negative of positive?
The vast majority of businesses are carbon positive at the moment – they generate more emissions than are absorbed or removed from the atmosphere.
Farming is one of the very few sectors that both emits and absorbs greenhouse gases from the atmosphere. It is therefore possible for a farm to become carbon neutral or negative by reducing its emissions and storing sufficient carbon in soil and trees. We’ll look at examples in the next instalments and unpack the term net zero next week.
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