Energy Use Accounting

1.0 Introduction

This moduleModule (Independent components of Isometric Certified Protocols which are transferable between and applicable to different Protocols.) describes how energy-related emissions must be calculated infor aCarbon carbonDioxide removalRemoval (CDR) projectprojects (An activity or process or group of activities or processes that alter the condition of a Baseline and leads to Removals or Reductions.) soas that they can be subtracted in the net CO2e (The amountpart of CO₂project emissionsgreenhouse that would cause the same integrated radiative forcing or temperature change, over a given time horizon, as an emitted amount of GHG or a mixture of GHGs. One common metric of CO₂e is the 100-year Global Warming Potential.)removalgas (The term used to represent the CO₂ taken out of the atmosphere as a result of a CDR process.) calculation. Furthermore, this module applies to all carbon removal pathways (A collection of Removal or Reduction processes that have mechanisms in common.), ensuring a consistently rigorous standard in how energy-related emissions are quantified and reported between different carbon removal projects and approaches.

2.0 System Boundaries

[math: CO_2e_{Energy\ R}] must account for all operations and support systems that consume energy within the removal process, for example through electricity or fuel, as specified in Section 3 of this module. These operations and support systems are denoted as [math: k].

Primarily non-road/rail/air/maritime mobile sources are included within this boundary, such as fork trucks and loaders used for material handling. However road, rail, air and martime mobile emission sources are excluded from [math: k], such as electric or diesel vehicles, as they are accounted for in [math: CO_2e_{Transportation,\ R}].

Where possible, project proponents (The organization that develops and/or has overall legal ownership or control of a Removal or Reduction Project.) should account for emission impacts of electricity usage based on the same grid regions (A geographically precise and internally well-connected energy distribution and use area representing a subsection or the entirety of a synchronized electricity grid. The assignment of a project to a grid region should be based on the location of the project’s point of interconnection within the topology of the electricity system, rather than the physical location of the project itself.) (well-connected energy distribution and use areas) as endorsed by national governments. For facilities within projects that consume large quantities of electricity, known as intensive facilities, accounting for the consequential (The analysis of specific Uncertainties, hazards and scenarios inherent in complex systems such as the natural and engineered environment, aiming to describe how systems-level environmentally relevant flows will change in response to possible decisions.) emission impacts of electricity usage may also be required. More details on when this is applicable can be found in Section 3.2.1.

3.0 Calculation of CO2eEnergy, R

Emissions associated with energy usage include the following potential emissions sources,

[math: CO_2e_{Energy,\ R} = CO_2e_{Electricity,\ R} + CO_2e_{Fuel,\ R}]

(Equation 1)

Where:

• [math: CO_2e_{Energy,\ R}] = the total quantity of GHG (Those gaseous constituents of the atmosphere, both natural and anthropogenic (human-caused), that absorb and emit radiation at specific wavelengths within the spectrum of terrestrial radiation emitted by the Earth’s surface, by the atmosphere itself, and by clouds. This property causes the greenhouse effect, whereby heat is trapped in Earth’s atmosphere (CDR Primer, 2022).)) accounting. This Module applies to all CDR pathways (A collection of Removal or Reduction processes that have mechanisms in common.), ensuring a consistently rigorous standard in how energy-related emissions (massare unitsquantified and reported between different projects and approaches.

2.0 Future versions

This Module was developed based on the current state of the art, publicly available science regarding energy emissions accounting. This Module will be updated in future versions as the underlying science evolves and the availability of high-quality data and documentation in the energy market increases, for example regarding emissions factors and power purchase agreements.

This Module will be reviewed at a minimum each year, when substantial changes of data availability in the energy market occur, or when there are substantial advances in understanding of scientific concepts relevant to emissions accounting for energy usage.

Isometric recognizes that best practices for the provision of energy to CDR projects currently represents an area of uncertainty. Isometric will continue to actively engage with the scientific community regarding the scientific rigor and operability of various energy emissions accounting frameworks for CDR projects, and will actively work to drive consensus in the ecosystem between suppliers, buyers, and academics towards the most rigorous approaches possible. This ongoing assessment and consensus building exercise will include monitoring both hourly temporal matching and emissions matching as approaches for low-carbon power procurement, with respect to scientific rigour, operability, and alignment with emerging policy frameworks. Any future changes to the approach outlined in this Module will be conducted in consultation with a range of ecosystem participants to ensure a robust transition to the best available approaches, while maintaining operational integrity for existing projects which are continuing to be established under an evolving governance landscape.

Isometric is committed to progressively introducing the most rigorous available requirements for energy emissions accounting over time, and intends to phase-in more robust approaches at the earliest time at which the evolving science allows, and at which time such approaches are proven to be operable under prevailing market conditions.

3.0 System boundaries

The emissions associated with energy use must account for all operations that consume energy within the CDR project processes, through the usage of both electricity and fuel. Emissions associated with energy use for a Removal, [math: R], are written hereafter as [math: CO_2e_{Energy,R}].

Primary non-road/rail/air/maritime mobile sources are included within this boundary, such as fork trucks and loaders used for material handling, and small personal transport modes used to move staff around project sites. However, road, rail, air and maritime mobile emission sources are excluded from the calculation of [math: CO_2e_{Energy,R}], as they are accounted for in [math: CO_2e_{Transportation,R}]. Refer to the Transportation Emissions Accounting Module for the calculation guidelines.

It should be noted that this Module relates to electricity and fuel consumption strictly within the project gate. Energy emissions associated with the production of products/feedstocks used as inputs for project operations are accounted for separately within the scope of the Embodied Emissions Accounting Module.

4.0 Calculation of CO₂e_Energy,R

Emissions including,associated atwith aenergy minimum,usage CO2,include CH4,the use of both electricity and N2Ofuel. The following calculation approach must be followed for the calculation of [math: CO_2e_{Energy,R}]:

[math: CO_2e_{Energy,R} = CO_2e_{Electricity,R} + CO_2e_{Fuel,R}]

(Equation 1)

Where:

• [math: CO_2e_{Energy,R}]: the total GHG emissions) associated with energy consumption for a removal, [math: R], in tonnes; of CO₂ equivalent (CO₂e).
• [math: CO_2e_{Electricity,\ R}]: =the Emissionstotal fromGHG emissions associated with electricity usage for a removal, [math: R], in tonnes, seeof Section 3CO₂e.2; and
• [math: CO_2e_{Fuel,\ R}]: =the Emissionstotal fromGHG emissions associated with fuel combustion to produce heat or thermal energy in the process or from fuel combustion in primarily non-road mobile equipment, such as forklifts and other material handling equipment used within the process (inside the gate),usage for a removal, [math: R], in tonnes, seeof Section 3.3, Equation (5)CO₂e.

[math: CO_2e_{Electricity,\ R}] and [math: CO_2e_{Fuel,\ R}] must account for all operations and support systems that consume electricity or fuel within athe removal,CDR denoted as [math: k]process. This may be calculated on an individual or combined basis (e.g., forprovided an individual piece of equipment, a sub-process, and/or a Project) as long asthat all operations andwithin supportthe systems, [math: k],process are accounted for.

34.1 Calculation Approachapproach

Equation (1) and the calculation approaches described in SectionSections 35-6 can also be followed for a batch, [math: n], or for a reportingReporting periodPeriod, [math: RP].

3

5.20 Calculation of CO₂e_{Electricity, R}

Electricity-related emissions are typically are indirect emissions associated with generation and transmission of electricity by another entity (e.g. an electric utility) which is used by the CDR process. All electricity-related emissions for electricity obtained from the grid (i.e. from an electric utility) shall be accounted for using average emissions intensities for the grid region within which The Project is located (see Section 5.2).

3.2

5.1 Definition of non-intensive and non-intensive facilities

The calculation approach in this moduleModule distinguishes between the types of electricity consumingintensive facilities used for a removal, [math: R], within a project. [math: CO_2e_{Electricity,\ R}] is calculated from the sum of electricity usage across facilities for a given removal, [math: R].

The two categories of projects relevant to this calculation approach are intensive projects, which have the potential foruse significant amounts of electricity utilization, and non-intensive projectsfacilities. AIntensive facilityfacilities isare considereddefined toas bethose non-intensivewhich forconsume the purposes of a project if it uses lessmore than 10 GWh and where the estimated electricity use per ton of CO2 sequestration is less than 50 kWh. Facilities that use greater than 10200 GWh of electricity or where estimated electricity use per tonyear.

Intensive of CO2 sequestration is greater than 50 kWhfacilities are classified as intensive facilities.

Any intensive facilities within a project, such as direct air capture facilities, must evaluate and account for the consequential impact of electricity usage on the system they are procuring electricity from accordingsubject to themore approachstringent inenergy Sectionaccounting 3.2.3.rules Anythan non-intensive facilities. withinNon-intensive afacilities project do not need to account for the consequential impact of electricity usage, and mustshould follow the calculation approach in Section 3.25.2 and Section 5.4.1 (if applicable). Intensive facilities should follow the calculation approach in Section 5.2 and Section 5.4.2 (if applicable).

3.2

5.2 Calculation of CO₂e_{Electricity, R} forwith nongrid-intensivebased facilities

electricity provision

The following calculation approach must be followed for non-intensiveemissions facilitiesassociated with provision of electricity from the grid:

[math: CO_2e_{Electricity,\ R} = f_{grid} \sum_{i=1}^{N}kwh_{k}\cdot EF_{Elect,\ r}E_i]

(Equation 2)

Where:

• [math: CO_2e_f_{Electricity,\ Rgrid}]: =grid total GHGaverage emissions resulting from electricity use for a removal [math: R]factor, in tonnes; of CO₂e/kWh. Details of requirements for acceptable emissions factors can be found in Section 5.5.
• [math: kwh_{k}E_i] = total kilowatt hours of: electricity usedusage forin each operation or support system,hour [math: ki], occurring in akWh.
• [math: non-intensiveN]: facilitytotal as partnumber of acalendar hours for removal, [math: R]; and
• [math: EF_{Elect,\ r}] = Emission factor in tonnes [math: CO_2e]/[math: kwh] for a given electrical grid located in region, [math: r].

If a CDR project relying on a non-intensive facility wishes to reduce their energy emissions through thedirect purchaseprocurement of qualifyinglow-carbon electricity thenpower, they may use the calculation approach in EquationsSection 35.4.1. andIf a CDR project relying on an intensive facility wishes to reduce their energy emissions through direct procurement of low-carbon power, they may use the calculation approach in Section 5.4.2 replacing [math: EF_G] with [math: EF_{Elect,\ r}]. Project proponentsProponents will be responsible for collectingproviding sufficient documentation to submit these calculations, as set out in Section 5.3.

3.2

5.3 CalculationEligibility of CO2eElectricity, Rcriteria for intensivelow-carbon Projects

power procurement

ForA intensiveproject facilitiesmay a consequential accounting approach is adopted (see Appendix 1 for further information), which is designedwish to bereduce conservativeits (Purposefullyenergy erringemissions onthrough the side of caution under conditions of Uncertainty by choosing input parameter values that will result in a lower net CO₂ Removal or GHG Reduction than if using the median input values. This is done to increase the likelihood that a given Removal or Reduction calculation is an underestimation rather than an overestimation.) such that it avoids overestimating the net carbon removal of a project. Emission impacts resulting from both the consumption of grid electricity and the direct procurement of low-carbon power. fromProject individualProponents generatorswill arebe consideredresponsible asfor partproviding sufficient documentation to allow for the discounting of thisproject approach.

3.2.3.1energy Exemptionusage for facilities subject to approved cap-and-trade programs

Facilities that source electricity from within jurisdictions that have implemented sufficiently rigorous GHG cap-and-trade programs shall assume a consequential emissions rate of zero for all electricity consumption within these jurisdictions. See Appendix 2 for further information onthrough this exemption. Currently the European Union (EU) Emissions Trading Scheme is the only cap-and-trade jurisdiction approved as sufficiently rigorous under this Modulemechanism.

3.2.3.2 Other facilities

For facilities not subject to the above exemption total emissions for a removal, [math: R], are calculated as the sum of the hourly emissions, [math: CO_2e_{Electricity,\ L}], over all hours of electricity consumption within that removal:

[math: CO_2e_{Electricity,\ R} = \sum CO_2e_{Electricity,\ L}]

(Equation 3)

Where:

• [math: CO_2e_{Electricity,\ R}] = total GHG emissions resulting from electricity use for a removal, [math: R], in tonnes; and
• [math: CO_2e_{Electricity,\ L}] = the total GHG emissions associated with [math: kwh_{L}] kilowatt-hours of electricity consumption in the hour in question for a project relying on an intensive facility, occurring within a removal, [math: R], in tonnes.

[math: CO_2e_{Electricity,\ L}] is calculated as follows:

[math: CO_2e_{Electricity,\ L} = max \bigg(0,kwh_{L} - \sum_{p}G_{p}\cdot m_{p}\bigg) \cdot EF_G + \sum_{p} \frac {G_{p}\cdot EF_{p}}{m_{p}}]

(Equation 4)

Where:

• [math: kwh_{L}] = total kilowatt-hours of electricity consumption in the hour in question;
• [math: G_{p}] = the amount of qualifying electricity procured for physical delivery from generator, [math: p], to the project in the same hour;
• [math: m_p] = derating factor used to account for transmission losses from delivery of power from generator, [math: p];
• [math: EF_G] = the hourly short-run marginal emissions rate (The estimated change in total greenhouse gas emissions from a structurally-fixed electricity system that would result from an incremental change in electricity demand at a specific point in the system at a specific time. Short-run marginal emissions rates reflect the emissions associated with real-time changes in output from specific marginal generators in response to the hypothetical change in demand. They do not reflect the potential for a persistent change in demand to incentivize entry of new generating facilities into the electricity system (i.e., structural change). Multiple methodologies for calculating short-run marginal emissions rates from available grid data exist, but all aim to quantify the same impact. Short-run marginal emissions rates are provided directly at hourly or sub-hourly resolution by some grid operators, and in other cases they are calculated and made available by third-party vendors. Some grid operators also provide temporally granular data on ‘fuels on the margin,’ from which project proponents may calculate marginal emissions rates using average fuel-specific emissions factors from the grid region in question.) (emissions associated with real-time changes in output from specific marginal generators in response to the hypothetical change in demand) of the local electricity grid at the project’s point of interconnection, and;
• [math: EF_{p}] = the hourly average carbon dioxide equivalent emissions intensity of the electricity generated by generator [math: p].

3.2.4 Eligibility Criteria for Qualified Electricity

Electricity consumption may beis subdivided into consumption of 'Qualified' electricity‘qualified’ and '‘non-Qualified'qualified’ electricity:

• ‘Qualified’: electricity usagewhich requiresis accountingprocured by contract purchase from low-carbon sources for onlythe theexclusive use of The Project. For qualified electricity, Project Proponents are required to account for emissions associated with individualthe identifiedspecific generatorsgenerator types which have been procured, including any embodied emissions.
• Non-qualified: electricity which is obtained from the electricity grid to which The Project is connected. For non-qualified electricity, Project Proponents are required to use average grid emissions factors for the calculation of emissions - as described in Section 5.2.

It should be noted that Project Proponents may elect to establish power generation "behind-the-meter". Generators are considered to be behind-the-meter when the equipment is owned and operated by the Project Proponent, or when the equipment is (Lifei) cycleowned GHGand operated by a third-party, (ii) directly connected to The Project, and (iii) does not contribute to transmission on the local electric grid. Under these circumstances, the electricity usage metered for the project operations ([math: E_i]) will correspond to the difference between the total electricity demand of The Project and the amount of electricity generated by behind-the-meter generators in each metering time period. Generators which are behind-the-meter do not need to satisfy the eligibility criteria established below for qualified electricity. Both embodied and operational emissions associated with productionbehind-the-meter generators should be quantified and allocated to the net-CO₂e calculation for each Reporting Period, [math: RP], following the same approach as for all other project equipment. Note that a connection of materials,"behind-the-meter" transportation,generators andto constructionthe grid will be permitted on a case-by-case basis in instances where the connection is present to manage excess generation which cannot be reasonably stored or other processes for goods or buildings.)

5.3.1 Definition of grid regions

Acceptable grid region definitions should be utilized in-line with those defined by a local regulatory authority. For projects operating in the United States, Project Proponents should use the definitions of grid regions established in the Department of Energy National Transmission Needs Study¹ (i.e. the definition adopted in the United States 45V tax credit for production of clean hydrogen), or definitions of grid regions corresponding to Independent System Operator (ISO) regions. Projects operating in the United States should provide a brief justification in the PDD for the choice of grid region definition with respect to the deliverability of procured power. We note that the Project Proponent must adopt a consistent definition of grid regions in the United States for all projects registered with Isometric operating within the United States, whenever technically feasible. For projects operating in the European Union, Project Proponents should use the European Network of Transmission System Operators (ENTSO) definitions of grid regions (referred to as "power regions"). Projects operating within all other global regions will agree with Isometric, at the point of submission of the PDD, appropriate grid region boundaries to use for the purposes of applying the requirements established in this Module. It should be noted that the definition of a grid region within this Module may change over time as regional frameworks and definitions develop further. However, generators which are certified as deliverable to a Project at the point of initial project validation will retain this certification for the duration of the project lifetime, regardless of future updates to this Module.

5.4 Calculation of CO₂e_{Electricity, R} with procured low-carbon power

Projects which procure low-carbon power to reduce their energy emissions should follow the calculation approach for [math: CO_2e_{Electricity,R}] described in this Section. Non-intensive facilities should follow the approach described in Section 5.4.1. Intensive facilities should follow the approach described in Section 5.4.2.

5.4.1 Non-intensive facilities

The following calculation approach must be used for non-intensive facilities:

[math: CO_2e_{Electricity, R} = f_{grid} \left[ \left( \sum_{i=1}^{N}E_i \right) - \left( \sum_p G_p \right) \right] + \sum_p f_p G_p]

(Equation 3)

Where:

• [math: G_p]: total amount of energy procured for removal [math: R] by generator type [math: p], in kWh. Note that in the samecalculation outlined above, the amount of procured electricity may not exceed the amount of electricity consumption by The Project for the removal, [math: R].
• [math: f_p]: emissions factor for generation by generator type [math: p], in tonnes of CO₂e/kWh.

For non-intensive facilities, documentation proving the direct procurement of low-carbon power should be time-stamped within one year prior to the point of consumption by The Project.

5.4.2 Intensive facilities

The following calculation approach must be used for intensive facilities:

[math: CO_2e_{Electricity, R} = f_{grid} \sum_{i=1}^N \left( E_i - \sum_p G_{p,i} \right) + \sum_p \left( f_p \sum_{i=1}^N G_{p,i} \right)]

(Equation 4)

Where:

• [math: G_{p,i}]: amount of energy procured in hour for[math: whichi] itby isgenerator claimedtype [math: p], in kWh. ElectricityNote isthat in the calculation outlined above, the amount of procured energy in hour [math: i] may not exceed the amount of electricity consumption by The Project in hour [math: i].

For intensive facilities, documentation proving the direct procurement of low-carbon power should be time-stamped with an hourly time granularity and accordingly matched to project energy usage on an hourly basis. Project Proponents must obtain documentation time-stamped with an hourly time granularity when available in the region of operation. We note that as an alternative approach, Project Proponents are permitted to operationalize Configuration 3 of the EnergyTag Granular Certificate Scheme Standard². Further details of this approach, and limitations to it's application in the context of this Module, are provided in Appendix 2.

Under some operational circumstances, documentation proving the direct procurement of low-carbon power featuring hourly time stamps may not be consideredavailable physically deliverable iffrom any power provider in the region of project operations. In this case, intensive facilities may follow the calculation approach described in Section 5.4.1 (Equation 3), provided that all of the following conditions are met:

• TheProject projectFinal Investment Decision (FID) is directlyreached connected ‘behindbefore the meter’year to the generating facility.
• Both the project and the generating facility are located within the same grid region.2028;
• The projectProject and the generating facility are located in adjacent grid regions (i.e., those sharing a direct transmission connection), at least one of which publishes locational marginal electricity prices (LMPs), and the average LMPis at the project'sdemonstration pointscale, defined here as an annual gross removal rate of interconnection is less than 10%100,000 greatertnCO₂/yr. thanNote thethat average LMP at the generator’s pointsubdivison of interconnectionprojects overinto theseveral hoursmaller inprojects question.is Ifexplicitly one of the two grid regions does not publish LMPsprohibited, thenand thecompliance LMPwith atthis therequirement intertie location between the two regions (or the average of LMPs at all intertie locations if multiple exist) maywill be usedverified ason a substitutecase-by-case for the LMPbasis at the point of interconnectionproject verification; and
• Reasonable best efforts have been made to obtain documentation featuring hourly time stamps. This must be evidenced by the provision to Isometric at the point of project verification of both (i) evidence of engagement with a minimum of three independent power providers and/or vertically-integrated utilities in whose territory the Project operates, including evidenced correspondence confirming that these suppliers do not offer documentation featuring hourly time-stamps and evidence that power provision from these suppliers would otherwise satisfy the requirements established under EC3 and EC4 for whicheverqualified electricity, generatorand (ii) a signed affidavit by the Project Proponent declaring that, to the best of their knowledge, procurement documentation featuring hourly time stamps is locatednot currently available in the non-publishingregion regionof project operations.

In regions where three eligible independent power providers and/or vertically-integrated utilities in whose territory The Project operates do not exist, evidence of engagement with all caseseligible entities must be provided.

It should be noted that all energy intensive projects must procure low-carbon power according to an hourly matching scheme (i.e. Equation 4) whenever possible, as this represents the most credible approach towards accurate characterization of the emissions associated with the provision of electricity to CDR projects. Isometric anticipates that by approximately the year 2028, contracting structures featuring hourly time stamps to facilitate hourly matching of low-carbon power procurement to project electricity demand will be widely available as a consequence of incoming regulations in various jurisdictions (e.g. the US DoE 45V tax credit for the production of low-carbon hydrogen, EU CRCF, etc.). At such a time that contracts featuring hourly time stamps are widely available in the energy market, the exception for energy intensive facilities described above will be revoked and compliance with the hourly matching scheme (Equation 4) will be mandatory for all projects relying on an intensive facility. Isometric anticipates that this provision will expire in approximately the year 2028. However, this date will remain under constant review. It should be noted that projects which commence operations using the exception described above will be permitted to utilize the exception for the full duration of the obtained PPA, regardless of any future updates to this Module. Upon expiration of the obtained PPA, if this occurs at such a time that this provision has been revoked from this Module, then compliance with the hourly matching scheme described above will be mandatory.

Information regarding the low-carbon power procurement approach used by the Project mustProponent provide:

• Physicalwill systembe documentationtransparently reported in the public PDD, includingwhich physicalwill locationbe and grid interconnection locationavailable for thedownload Project and generating facility

In cases wherefrom the Projectregistry page associated with each credited removal.

5.4.2.1 Intensive facilities larger than demonstration scale

Projects with an annual gross removal rate of more than 100,000 tnCO₂/yr may also utilize the provision outlined above, following the calculation approach described in Section 5.4.1 (Equation 3). However, use of this provision by projects with a gross removal rate of more than 100,000 tnCO₂/yr is notfurther directlysubject connectedto ‘behindan additional safeguard in the meter’form of an "emissions screen". Projects operationalizing this provision must demonstrate that the following criteria is satisfied by power procurement activities:

[math: \left( f_{grid} \sum_{i=1}^{N} E_i \right) - \left( \sum_p (f_{grid} - f_p)G_p \right) \leq 0]

(Equation 5)

Note that in some cases, satisfying this criteria may require that a larger amount of RECs/EACs are retired than the amount claimed for discounting project energy usage according to theEquation generating facility, the Project must provide:3.

• Documentation from governments or grid operators justifying grid region definitions

In cases where the Project seeks to establish deliverability between two adjacent grid regions, the Project must provide:

• Hourly-granularity LMP data sourced from a grid operator that administers at least one of the two grid regions

3.2

5.5 Acceptable Emissionemissions Factors and Ratesfactors - CO₂e_{Electricity, R}

3.2.5.1 EFElect,r and EFp

Emission[math: factorsf_{grid}] (An estimate of the- emissions intensity per unit of an activity.)factors used must:

• Be technology-specific to the mix of electricity generation methods in the connected electric grid;
• Be reported on a consumption basis, meaning that all net physical energy imports/exports across the grid boundary should be reflected;
• Account for the full life cycle emissions associated with electricity generation, including direct emissions from power generation, transmission and distribution losses, and upstream life cycle emissions associated with extraction, refining and transportation of primary fuels (i.e. from cradle-to-gate);
• Be for the specific region (nation, state, locality) where the electricity consumption is occurring, with the most granular or site-specific data source preferred;
• Be for the most recent published year. Wherever possible, the utilized emissions factors must correspond to those most recently published by the relevant authority in the region of project operations;
• Wherever available, be reported on a residual-mix basis, meaning that any generators within a grid region which are subject to contract purchase (e.g. through RECs/PPAs) are excluded from the average emissions calculation. Project Proponents must declare whether such data is available in the region of operation, and utilize such data wherever possible; and
• Account for total GHG emissions as CO₂e. Separate emissions factors for each GHG may be utilized, and the calculated emissions should be converted to CO₂e using the 100-yr Global Warming Potential (GWP) for the relevant GHG, based on the most recent volume of the IPCC Assessment Report (presently the Sixth Assessment Report).

[math: f_p] - emissions factors used must:

• Be technology-specific to the method of electricity generation;
• accountAccount for all embodied emissions associated with the establishment of procured generators by amortizing on a per unit electricity generation basis. If embodied emissions are not included within the used emissions factor, then they must be calculated separately and allocated to The Project on a proportional basis relative to the usage of the generating asset over its anticipated lifetime and generation capacity;
• Account for the full life cycle emissions associated with electricity generation and include direct emissions from power generation (i.e., fuel combustion), upstream emissions associated with fuel production, equipment manufacture, and equipment decommissioning and disposal at a minimum;
• beAccount for theany specificnecessary regionderating (nation,factors state,associated locality)with whereenergy loss during transmission between the electricitygenerating productionfacility occurring,and withThe Project. Where derating factors are not applied in the mostutilized granularemissions factors, the Project Proponent must additionally account for these. For example, derating factors for transmission losses may be estimated using the approach of Sadovskaia et al. (2019)³, or site-specificany dataother sourcesuitably preferred;
• bejustified for the most recent published yearmethod; and
• accountAccount for total GHG emissions as CO₂e. Separate emissionemissions factors for each GHG may be utilized, and the calculated emissions should be converted to CO₂e using the 100-yr Global Warming Potential (GWP) for the relevant GHG, based on the most recent IPCCUN 100-year global warming potentials (A measurevolume of howthe muchIPCC energyAssessment Report (presently the emissionsSixth ofAssessment 1 tonne of a GHG will absorb over a given period of time, relative to the emissions of 1 ton of CO₂.Report).

AcceptableRegional or subnational location-based grid average emissions factors must be used where available for the calculation of [math: f_{grid}]. These must represent net physical energy imports and exports across the grid boundary and all electricity production occurring in a defined grid distribution region that approximates a geographically precise energy distribution and use area.

Applicable life cycle emission factors include those utilized in the Argonne National Laboratory GREET Model¹⁴, California Air Resources Board modified GREET model (CA-GREET)²⁵, Ecoinvent database³⁶, US Federal Life Cycle Inventory database or LCA Commons⁴⁷, and similar databases used in common life cycle assessment (LCA (An analysis of the balance of positive and negative emissions associated with a certain process, which includes all of the flows of CO₂ and other GHGs, along with other environmental or social impacts of concern.)) practices or tools (such as OpenLCA, SimaPro, or GaBi (LCA for Experts) ).

Other emissionEmission factors may also be used that do not incorporate the full life cycle emissions associated with power generation if these additional life cycle emissions are accounted for separately. For example, real-time carbon intensity factors5 may also be utilized, provided they are time-aligned with operations and account for CO2, CH4, and N2O. Power generation emission factors based on fuel combustion from sources such as EIA or US EPA (i.e., AP-42) may also be utilized if the additional upstream and downstream life cycle considerations are addressed. A combination of such emission factor sources may also be used, such as real-time or daily CO2 data plus EPA or EIA CH4 and N2O factors.

3.2.

5.2 Short-run Marginal Emission Rates - EFG

Project proponents may estimate the short-run marginal emissions (SRME) rate, [math: EF_G], associated with consumption of grid electricity at a project’s point of interconnection, using hourly SRME data provided by a grid operator, government, or third-party provider, wherever such data is available.

Emission rates must:

• incorporate the most geographically-precise SRME data offered by the chosen provider:
  • either the individual node most representative of the project’s point of interconnection to the grid in the case of nodal-resolution marginal emissions data,
  • or the smallest data region containing the project’s point of interconnection in the case of regional-resolution marginal emissions data.
• include upstream emissions
  • if the marginal emissions data sets used to calculate [math: EF_G] do not incorporate upstream emissions, the project proponent should apply a 1.2x mulitplier to the baseline (A set of data describing pre-intervention or control conditions to be used as a reference scenario for comparison.) emissions factor in order to correct for upstream impacts.

If a project is located in a grid region for which no hourly-resolution SRME data is available from any provider, or if the project proponent opts not to use such data, the project proponent should assign a proxy (A measurement which correlates with but is not a direct measurement of the variable of interest.) marginal emission rate to all net electricity consumption from the grid.

• To calculate this proxy rate, the project proponent should:
  • first identify all grid regions that share a direct transmission connection with the project’s local grid region;
  • subsequently calculate average emission factors for all fuel types that accounted for more than 5% of total generation in this combined region in the year prior to the reporting period. This may be done by dividing the annual total reported GHG emissions from all plants of a given fuel type by their annual total electricity generation.
  • an exception to this rule exists for facilities operating in grid regions that publish LMPs for all hours in which the average LMP at the project’s point of interconnection is less than the equivalent of USD 10/MWh in 2022. In such cases, the project should be assumed to have consumed electricity from carbon-free resources that would otherwise have been curtailed, and the value of [math: EF_G] should be reported as zero rather than the typical proxy value. If the grid region in which the Project is located does not publish LMPs, but at least one adjacent region does, the Project may use the average of all published LMPs at the intertie points between the Project’s grid region and the adjacent grid regions as a proxy for the LMP in the Project’s grid region.

Emission rates must not:

• use non-consequential metrics such as average grid emissions intensities in reporting the additional emissions impact of grid electricity consumption. Average emissions rates can be used to divide responsibility for emissions among all electricity consumers, but they do not reflect the impacts of an individual consumer’s actions on total emissions; or
• be estimated using [math: EF_G] SRME data from grid regions other than the one in which the project is located.

3.2.5.3 Derating Factors - mp

For every generating facility, [math: p], the value of [math: G_{p}] (see Section 3.2.3) in a given hour must be equivalent to the average metered A/C power output of the Project in that hour. If the facility is co-located ‘behind-the-meter’ with the Project, the value of [math: m_{p}] should be equal to 1. If the generating facility is not co-located with the Project, the value of [math: m_{p}] should be revised to 0.95, in order to account for transmission losses6.

3.2.6 Measurements - CO₂e_{Electricity, R}

PrimaryThe measurementsprimary measurement considered in calculation of electricity emissions areis:

• for non-intensive facilities:
  • [math: kwh_kE_i] (Equation 2) -: total kilowatt hoursamount of electricity used forby eachThe operationProject orin support system,hour [math: ki]; and
• for intensive facilities:
  • [math: kwh_L] (Equation 4) - total kilowatt hours of electricity used for the hour in question
  .

Measurements must be made using a utility grade power meteringmeter, or an independent power meter installed by the Project Proponent, with hourly reporting frequency at a minimum. MetersPreference mustis havefor meters with an accuracy of better than 2% of reading for total energyelectricity consumption, as reported in kwhunits of kWh.

Any However, meters usedwith accuracy of worse than 2% of reading for total electricity consumption are acceptable provided that the accuracy of the meter is reported and an appropriate discount is applied to the Project net-CDR calculation. Meters must be calibrated initially and at regular intervals in accordance with manufacturer specifications to ensure accuracy.

3.2

5.7 Required Recordsrecords &and Documentationdocumentation - CO₂e_{Electricity, R}

Electricity usage must be monitored for all operations within the gate at each location of their utilization relevant to project operation. The projectProject proponentProponent must maintain records of any electricity use for any operation or support system, [math: k], within the gate of a removal, [math: R]'s, process, that consumes electricity. This is in addition to documentation listed in Section 5.3.2.4, if applicable to aThe projectProject.

• Allowable electricity records include, but are not limited to:

  • onOn-site electricity meter readings (i.e., utility electric meter), whether owned by the site owner ofor by the electric utility, either electronic or manually logged; or
  • independentIndependent power meter readings for metering equipment installed by the projectProject proponentProponent to measure power consumption of the process;
  .

If other equipment or processes not related to the removal, [math: R]’s, process are included in meter readings or utility bills, electricity usage may be allocated to such processes based on sub-metering data, equipment maximum electricity consumption ratings and operating hours for each sub-system and percentage of total maximum electricity consumption accounted for by the meter or utility bill, or by other justifiable allocation methods which must be reviewed and accepted during third party verification.

All records of electricity usage, including meter specificationsspecification and calibration records, must be maintained by the projectProject proponentProponent for a period of at least five years.

3

6.30 Calculation of CO₂e_{Fuel, R}

Process emissions may result from combustion of fuels to provide thermal energy to support equipment startup and operation oroperations, to supply steam or other thermal energy sources for operations, or to power primary non-road/rail/air/maritime mobile sources. Fuels for the provision of heat to The Project can be supplied from outside sources, or may be produced as a result of activities within the project gate.

The following calculation approach must be followed for calculation of [math: CO_2e_{Fuel, R}]:

[math: CO_2e_{Fuel,\ R} = \sum_{k=1}^{k}K m_{Fuelfuel,\ k}\cdot\ EF_f_{Fuelfuel,k}]

(Equation 56)

Where:

• [math: CO_2e_{Fuel,\ R}] =: total GHG emissions resulting from thermal energy generation via fuel combustion for a removal, [math: R], in tonnes of [math: CO_2e]CO₂e.
• [math: m_{Fuelfuel,\ k}] =: total mass, volume, or heating value of fuel used for each operation or support system, [math: k], asused part offor a removal, [math: R] (in appropriate units e.g. kg, gal, ft³, therms, etc. as required based on emission factor units)
• [math: EF_f_{Fuelfuel,k}]=: Emissionemissions factor infor tonnesfuel [math: CO_2ek] in tonnes of CO₂e/unit.
• [math: K]: total number of distinct fuels, [math: k], used for a givenremoval, fuel[math: type where unit is specific to each fuel type and factorR].

OperationsProject Proponents may consider the use of waste heat to potentially reduce the energyfuel usage of a processproject. A true wasteWaste heat sourcesources doesdo not require accounting of GHG emissions associated with the production and delivery of the wasteutilized heatthermal to the project gateenergy. Waste heat utilization must meet the criteria described in Section 3.36.1 to be consideredeligible wastefor discounting against project heat usage.

Any activities specifically developed inside the project gate to handle and utilize the waste heat, however, must be accounted for in the life cycle analysis. These potentially include, but are not limited to:

• wasteWaste heat distribution systems, including pumps, piping, or other equipment;
• wasteWaste heat upgrading processes, such as heat pumps, booster pumps, orother other equipment; and
• wasteWaste heat conversion processes, such as waste heat -to -power technologies, such as(e.g. organic rankingRankine cycle generators).

Equipment and energy usage associated with waste heat utilization must be accounted for in accordance with the requirements of this moduleModule and the Embodied Emissions moduleAccounting Module.

3.3

6.1 Waste Heatheat Eligibilityeligibility Criteria

criteria

Waste heat utilization must meet all of the following criteria to be considered true waste heat, and be exempt from GHG emissions accounting:

3.3

6.2 Acceptable Emissionemissions Factorsfactors - CO₂e_{Fuel, R}

Emission[math: f_{fuel,k}] - emissions factors used must:

• beBe selected based on the specific fuel type being used and the type of combustion process;
• accountBe for the specific region (nation, state, locality) where the fuel consumption is occurring, with the most granular or site-specific data source preferred;
• Account for the full life cycle emissions (well-to-wheel) associated with fuel combustion and include direct emissions (Emissions that are produced by a specific CDR process and are directly controllable.) from fuel combustion, as well as upstream emissions associated with fuel production and equipment manufacture, and downstream emissions associated with equipment decommissioning and disposal, at a minimum;
• be for the most recent published year; and
• accountAccount for total GHG emissions as CO₂e, including, at a minimum, CO2, CH4, and N2O emissions. Separate emissionemissions factors for each gasGHG may be utilized and calculated emissions converted to CO₂e using the 100-yr Global Warming Potential (GWP) for the relevant GHG, based on the most recent IPCCUNvolume 100-yearof globalthe warmingIPCC potentialsAssessment Report (presently the Sixth Assessment Report).

Acceptable emission factors include those utilized in the Argonne National Laboratory GREET Model¹⁴, California Air Resources Board modified GREET model (CA-GREET)²⁵, Ecoinvent database³⁶, US Federal Life Cycle Inventory database or LCA Commons⁴⁷, and similar databases used in common LCA practices or tools (such as OpenLCA, SimaPro, or GaBi (LCA for Experts) ).

Other emission factors may also be used that do not incorporate the full life cycle emissions associated with fuel combustion if the additional life cycle emissions are accounted for separately. For example, data sources such as the US EPA - Direct Emissions from Stationary Combustion⁷⁸, US EPA AP-42⁸⁹, or US EPA MOVES Model⁹¹⁰ (mobile sources) may be utilized as long as additional factors for full life cycle emissions are included in analyses.

Note that heat supply to projects from sources other than fuel combustion is allowable under this Module (e.g. geothermal steam). In these cases, bespoke emissions factors are likely necessary on a case-by-case basis, as emissions from such sources can vary significantly by site. Therefore, the exact emissions allocation procedure will be reviewed and agreed by Isometric at the point of project verification.

3.3

6.3 Measurements - CO₂e_{Fuel, R}

PrimaryThe measurementsprimary measurement considered in calculation of fuel emissions areis:

• [math: m_{Fuelfuel,\ k}] =: total mass, volume, or heating value of fuel used for each operation or support system, [math: k] used for a removal, [math: R] in appropriate units e.g. kg, gal, ft³, therms etc.

3.3

6.4 Required Recordsrecords &and Documentationdocumentation - CO₂e_{Fuel, R}

Fuel usage must be monitored for all operations within the gate at each location of their utilization relevant to project operation. The projectProject proponentProponent must maintain records of any fuel use for any operation or support system, [math: k], within the gate of a removal [math: R]'s process, that consumes fuel.

• Allowable fuel records include, but are not limited to:

  • onOn-site fuel meter readings (e.g., natural gas utility meter, fuel flow meters), either electronic or manually logged; or
  • weightWeight of fuel container readings, either electronic or manually logged; or
  • although not preferable, monthlyMonthly utility bills may be used, if they indicate total fuel usageconsumption for the month, the bills fully address any fuel usage by the process, and/or a justifiable allocation procedure is used to determine fuel consumption by the process; or
  • fuelFuel usage for handling equipment may also be determined by any of the above methods, or, if necessary, by documentation of total time of use of each equipment item duringfor thea processremoval, R, and calculation of the fuel consumption based on manufacturer fuel consumption ratings. Data obtained from equipment manufacturer on-board-diagnostics or on board data systems is also acceptable.

If other equipment or processes not related to the removal [math: R]'s process are included in meter readings or utility bills, fuel usage may be allocated to such processes based on sub-metering data, equipment maximum fuel consumption ratings and operating hours for each sub-system and percentage of total maximum fuel consumption accounted for by the meter or utility bill, or by other justifiable allocation methods which must be reviewed and accepted during third party verification.

Any meters usedMeters must be calibrated initially and at regular intervals in accordance with manufacturer specifications to ensure accuracy. All records of fuel usage, including meter specificationsspecification and calibration records, must be maintained by the projectProject proponentProponent for a period of at least five years.

47.0 Acknowledgements

Isometric would like to thank following contributors to this moduleModule:

• Tim Hansen (350 Solutions).
• Wilson Ricks (Princeton University)

Isometric would like to thank following reviewers of this module:

• Grant Faber (Carbon Based Consulting).

58.0 Definitions and Acronymsacronyms

Independent components of Isometric Certified Protocols which are transferable between and applicable to different Protocols.

An activity or process or group of activities or processes that alter the condition of a Baseline and leads to Removals or Reductions.

The amount of CO₂ emissions that would cause the same integrated radiative forcing or temperature change, over a given time horizon, as an emitted amount of GHG or a mixture of GHGs. One common metric of CO₂e is the 100-year Global Warming Potential.

The term used to represent the CO₂ taken out of the atmosphere as a result of a CDR process.

A collection of Removal or Reduction processes that have mechanisms in common.

The organization that develops and/or has overall legal ownership or control of a Removal or Reduction Project.

A geographically precise and internally well-connected energy distribution and use area representing a subsection or the entirety of a synchronized electricity grid. The assignment of a project to a grid region should be based on the location of the project’s point of interconnection within the topology of the electricity system, rather than the physical location of the project itself.

The analysis of specific Uncertainties, hazards and scenarios inherent in complex systems such as the natural and engineered environment, aiming to describe how systems-level environmentally relevant flows will change in response to possible decisions.

Those gaseous constituents of the atmosphere, both natural and anthropogenic (human-caused), that absorb and emit radiation at specific wavelengths within the spectrum of terrestrial radiation emitted by the Earth’s surface, by the atmosphere itself, and by clouds. This property causes the greenhouse effect, whereby heat is trapped in Earth’s atmosphere (CDR Primer, 2022).

PurposefullyA erring on the sidecollection of caution under conditions of Uncertainty by choosing input parameter values that will result in a lower net CO₂ Removal or GHG Reduction than if using the median input values. This is done to increase the likelihood that a given Removal or Reduction calculationprocesses isthat anhave underestimation rather than an overestimation.

The estimated changemechanisms in total greenhouse gas emissions from a structurally-fixed electricity system that would result from an incremental change in electricity demand at a specific point in the system at a specific time. Short-run marginal emissions rates reflect the emissions associated with real-time changes in output from specific marginal generators in response to the hypothetical change in demand. They do not reflect the potential for a persistent change in demand to incentivize entry of new generating facilities into the electricity system (i.e., structural change). Multiple methodologies for calculating short-run marginal emissions rates from available grid data exist, but all aim to quantify the same impact. Short-run marginal emissions rates are provided directly at hourly or sub-hourly resolution by some grid operators, and in other cases they are calculated and made available by third-party vendors. Some grid operators also provide temporally granular data on ‘fuels on the margin,’ from which project proponents may calculate marginal emissions rates using average fuel-specific emissions factors from the grid region in question.

Life cycle GHG emissions associated with production of materials, transportation, and construction or other processes for goods or buildings.

An estimate of the emissions intensity per unit of an activity.

A measure of how much energy the emissions of 1 tonne of a GHG will absorb over a given period of time, relative to the emissions of 1 ton of CO₂common.

An analysis of the balance of positive and negative emissions associated with a certain process, which includes all of the flows of CO₂ and other GHGs, along with other environmental or social impacts of concern.

A set of data describing pre-intervention or control conditions to be used as a reference scenario for comparison.

A measurement which correlates with but is not a direct measurement of the variable of interest.

Emissions that are produced by a specific CDR process and are directly controllable.

Lowering future GHG releases from a specific entity.

69.0 Appendix 1 - Consequentialcompanion Impactsdocumentation

This appendix is a companion to the Isometric Energy Use Accounting Module V1.2, providing supporting information regarding the rationale and factors considered when determining the requirements of Electricitythe UsageModule. This appendix should be read in conjunction with the Module and is provided as guidance. Should there be any discrepancy or inconsistency between this appendix and the Module itself, the requirements of the Module will prevail.

9.1 Why does the Module use average emissions factors for grid-based electricity use?

The emissions accounting approach adopted in this Module for electricity consumption from the grid requires the use of generation-weighted grid-average emissions factors. An alternative approach supported by some published studies relies on the use of marginal grid emissions factors when accounting for emissions from electricity consumption from the grid.

A marginal generator is the specific generating unit in a grid region which will modify its output in response to changes in demand from users of the grid. In many grid regions, even those with a high proportion of generation provided by renewables, the marginal generators will often be fossil-fuel based. The marginal emissions factor, specifically the Short-Run Marginal Emissions (SRME) rate, aims to quantify the emissions which result from an incremental increase in demand causing a real-time increase in output from a specific marginal generator. The motivation behind marginal emissions accounting in this context is to embed within the calculations that incremental demand, like that from a CDR project, is likely to be met by flexible fossil-fuel based power generation in many real-world settings - which can result in significant emissions and a reduction of the net carbon removal achieved by a project. In many cases, the SRME will be substantially larger than the corresponding grid average emissions factor.

However, Isometric’s present view is that marginal emissions factors are not appropriate for emissions accounting of electricity usage in this context. Firstly, the marginal generator is fundamentally unobservable in practice. In real-world grids, there are a large number of fluctuating sources of demand at any given time, and complex grid dispatch models respond to these fluctuations in demand by ramping up/down several independent generators simultaneously. Under these conditions, the definition of the SRME provided above is invalid and loses practical meaning from the perspective of establishing a causal relationship between a CDR project and a specific marginal generator.

Secondly, marginal emissions rates are determined by modeling approaches, which can be categorized as either (i) statistical models applied to historical data to analyze the relationship between demand and emissions, or (ii) economic dispatch models to estimate a merit order based on marginal generation cost (dispatching lowest cost first). There is no clear consensus in the published literature as to which modeling approach is favorable, and the models used are fundamentally unable to be validated because the marginal generator cannot be observed in practice. Therefore, there is no clear mechanism by which any model for the marginal emissions factor can be validated as achieving the intended goal in real-world scenarios. This combination of factors does not satisfy Isometrics standards for the use of modeling approaches in emissions accounting. As per Section 2.5.5.3 of the Isometric Standard; “Models must be [...] shown to be reliable via [...] testing or correlation with empirical data”. In contrast, grid-average emissions factors can be readily validated as achieving their intended objective by using empirical data and real-world measurements. This means that grid-average emissions factors are inherently more reliable, based on currently available data and science.

Therefore, while marginal emissions rates appear to be the most conceptually aligned approach with a consequential emissions accounting framework for CDR projects, currently available data and methodologies for their calculation are not sufficient to permit confident real-world usage. Isometric will continue to monitor developments in the scientific literature, as well as data availability in the energy market, and will make future amendments to this Module as needed.

9.2 How does the Module approach procurement of low-carbon electricity for energy intensive projects?

For energy intensive projects, defined as having an annual electricity consumption of more than 200 GWh, the Module requires that any procured power is matched to project demand on an hourly basis (i.e. “hourly matching”). Following consultation with experts in the carbon removal ecosystem, Isometric believes that such an approach is the only effective means by which to embed the impact of generator intermittency within the emissions accounting scheme for widely-used low-carbon generator types (e.g. solar, wind).

In practice, implementation of hourly matching requires two conditions to be satisfied by the prevailing energy market:

• Renewable Energy Certificates (RECs) or Energy Attribute Certificates (EACs) proving procurement of power featuring hourly generation timestamps must be available; and
• Digital infrastructure in the energy market must exist to facilitate liquid trading of hourly RECs/EACs to match the varied operational requirements of carbon removal suppliers.

At present, it is generally the case that neither of these conditions are satisfied by real-world regional energy markets. Isometric anticipates substantial developments in energy markets towards these goals over the next several years. However, in the interim while these market developments take place, an alternative emissions accounting approach is required. To ensure that early stage projects can secure financing, emissions accounting requirements which are operable in the real-world are necessary. This is an essential component of ensuring that the CDR industry can scale effectively over the coming years to drive down cost and energy consumption of key carbon removal technologies.

Therefore, Isometric is introducing an operational on-ramp for carbon removal suppliers operating energy intensive projects. The on-ramp will allow an exemption for energy intensive projects to use a conventional volumetric matching approach (i.e. “annual matching”), rather than being required to conduct hourly matching. This on-ramp will be accessible to suppliers initiating projects in the period until 2028. Isometric will be reviewing the conditions of the energy market on, at least, an annual basis to determine if the continued use of the exemption is necessary - if the wider energy market develops the required infrastructure faster than we anticipate, then Isometric’s timeline for a full transition to hourly matching will be accelerated. The exemption will only be available to removal projects which meet the following two criteria (i) the gross removal capacity of the project is less than 100,000 tnCO₂/yr, and (ii) a burden of proof is satisfied to demonstrate that implementation of hourly matching is not possible in the region of project operations. Full details of the burden of proof and other details relating to the exemption can be found in the Module main text.

As outlined above, the exemption for energy intensive projects to use volumetric matching in place of hourly matching is expected to increase uncertainty on the number of credits which should be generated for a removal activity. Prior to the release of this Module, Isometric has conducted extensive modeling activities to quantify how the volumetric matching exemption could impact the number of generated removal credits. As inputs, the modeling exercise used:

• Regional electricity generation and carbon intensity data from the NREL Cambium model for a range of typical grid regions; and
• Representative performance data and electricity demand profiles for carbon removal technologies.

This data was used to estimate the impact on calculated energy emissions in a range of scenarios for both hourly matching and volumetric matching based frameworks. We have concluded based on the outcomes of this exercise that the impact on the accuracy of the net carbon removal calculation when allowing volumetric matching is small enough in magnitude that use of the exemption is permissible in the near-term for projects operating at small scales. It is important to note that the limited use of the exemption with respect to project deployment date and size are key pillars towards ensuring the responsible application of carbon accounting rules in the context of energy intensive carbon removal.

As outlined in Section 35.4.2.31 implicitly assumes that all non-differentiated grid electricity generated to supply a Project’s needs comes from existing marginal generators, which in today’s electricity systems are generally fossil-fired. This method on its own is likely to overestimate the long-run marginal emissions impact of a plant’s electricity consumption, as it is possible if not likely that new low-carbon generators would eventually be deployed to meet some portion of this demand.

Because the consequential impact of a Project's electricity consumption on decisions to deploy new low-carbon generators cannot be observed empiricallyModule, the approachuse endorsedof the exemption is also permitted for projects with a gross removal of more than 100,000 tnCO₂/yr - subject to the application of an “emissions screen” (see Equation 5). The emissions screen provides an additional guardrail to protect against significant uncertainties in Sectionthe 3context of large energy intensive projects.2.4 The formulation of the emissions screen criteria requires that alarge Projectprojects procure a sufficient amount of power to fully abate all emissions which would have occurred had the project procured all electricity directly from newthe low-carbongrid. generatorsWe note that this will always result in ordera project at least procuring a sufficient volume of power to be credited with consumption of their electricity. It further requires procured electricity to be generated inmatch the samemeasured hourlydemand periodby forthe which it is claimedproject, and will in some cases require the project to beprocure physicallyan deliverableexcess of power to ensure that the full amount of equivalent grid-based emissions are fully addressed.

While permissible for near-term use, Isometric intends to phase out the use of this exemption at the earliest possible date. Isometric will actively support market advancements in collaboration with carbon removal suppliers, buyers, and academics to ensure that the necessary market structures are both rigorous, and implemented as soon as possible, to enable a full transition to the Project during this period. These conditions align the electricity market and emissions impactsapplication of bothan grid-basedhourly generatorsmatching and those that are co-located with the Project.

While recent research has demonstrated that procurement of carbon-free electricity subject to these constraints can typically mitigate the consequential emissions impact of a Project’s electricity consumption during the hoursapproach for which such claims are made, there are still conditions under which this mitigation can be imperfect 10¹¹. If low-carbonall energy deploymentintensive is constrained temporarily by manufacturing, permitting, or installation bottlenecks, or permanently by geographic limitations, there can be carbon opportunity costs associated with the procurement of these resources to serve new electricity demand rather than to displace existing fossil-fired electricity generation. While this module establishes guardrails intended to mitigate such outcomes, it should be acknowledged that these carbon opportunity costs are fundamentally unobservable and cannot be eliminated with certainty. Project developers should take steps to qualitatively assess current and potential future bottlenecks to clean electricity development in their target markets, and should aim to deployremoval projects in locations where such constraints are minimized.

710.0 Appendix 2 - RobustEnergyTag's Cap-and-trade"Configuration Jurisdictions3"

BindingThe government-imposedEnergyTag capsGranular onCertificate GHGScheme emissionsStandard prevent(Version individual electricity consumers from driving system-level changes in emissions2)², andpublished therebyMarch obviate the need for project-level accounting of consequential emission impacts.

In a jurisdiction subject to a robust GHG cap-and-trade policy that is not oversupplied with emissions allowances2024, anyestablishes increasesguidence in("Configuration emissions3"), fromwhich a project’s electricity consumption are required tocan be offset by reductions (Lowering future GHG releases from a specific entity.) in emissions elsewhereoperationalized in the economyabsence of the availability of documentation proving the procurement of low-carbon power for provision to the project time stamped with an hourly granularity, which can emulate the same outcomes as hourly time matching under limited circumstances.

The basis of this approach is that where the RECs/EACs produced by a generator are not explicitly time stamped with hourly granularity, generation side metering of electricity production with hourly measurement frequency can be used to map a time stamp onto the RECs/EACs purchased from that generator. Under this approach, RECs/EACs produced by the generator are allocated time stamps corresponding to particular hours in proportion to the observed generating output from the generator in each hour of interest.

We note that the currently published guidence by EnergyTag in Version 2 of the Granular Certificate Scheme Standard does not provide protections against duplicate claims to generation at a partricular time under contractual purchasing structures where two (or more) buyers receive RECs/EACs generated by a single generator. Therefore, theat consequentialthis emissionstime, impactoperationalization of aConfiguration project’s3 electricityfor consumptionemulation shouldof hourly time matching will only be assumedpermitted to be 0, ifunder the project is locatedModule in ancircumstances approved jurisdiction with a GHG cap-and-trade policy recognized under this Protocol as sufficiently robust.

Factors that characterize a robust cap-and-trade policy include:

• emission limits that are stringent in relation to emissions, inclusive of any banked compliance instruments,
• effective border adjustment policies that minimize carbon leakage, especially inwhere the electricityProject sector,
• the legal authority and apparent political commitment to operate the market over long time horizons, and
• any other major factors that illustrate a high likelihood of credible, binding emission limits for covered facilities.

Currently the EU Emissions Trading Scheme, which covers the 27 EU member nations as well as Iceland, Norway, and Liechtenstein,Proponent is the onlysole cap-and-tradebuyer jurisdictionof approvedRECs/EACs asproduced sufficientlyby rigorousa under this Protocolgenerator.

811.0 Relevant Worksworks

EcoInvent. (2013). Overview and methodology Data quality guideline for the ecoinvent database version 3. https://ecoinvent.org/wp-content/uploads/2020/10/dataqualityguideline_ecoinvent_3_20130506_.pdf

Intergovernmental Panel on Climate Change (IPCC). (2023). IPCC Sixth Assessment Report. https://www.ipcc.ch/assessment-report/ar6/

International Organization for Standardization. (2006). ISO 14040:2006 Environmental management — Life cycle assessment — Principles and framework. https://www.iso.org/standard/37456.html

International Organization for Standardization. (2006). ISO 14044:2006 Environmental management — Life cycle assessment — Requirements and guidelines. https://www.iso.org/standard/38498.html

International Organization for Standardization. (2008). Evaluation of measurement data — Guide to the expression of uncertainty in measurement (ISO JGCM GUM). https://www.iso.org/sites/JCGM/GUM/JCGM100/C045315e-html/C045315e.html?csnumber=50461

International Organization for Standardization. (2011). ISO 14066:2011 Greenhouse gases — Competence requirements for greenhouse gas vion teams and verification teams. https://www.iso.org/standard/43277.html

International Organization for Standardization. (2017). ISO 21930:2017 Sustainability in buildings and civil engineering works — Core rules for environmental product declarations of construction products and services. https://www.iso.org/standard/61694.html

International Organization for Standardization. (2017). ISO/IEC 17025:2017 General requirements for the competence of testing and calibration laboratories. https://www.iso.org/standard/66912.html

International Organization for Standardization. (2019). ISO 14064-2:2019. Greenhouse Gases - Part 2: Specification With Guidance At The Project Level For Quantification, Monitoring And Reporting Of Greenhouse Gas Emission Reductions Or Removal Enhancements. ISO. https://www.iso.org/standard/66454.html

International Organization for Standardization. (2019). ISO 14064-3:2019. Greenhouse gases — Part 3: Specification with guidance for the verification and validation of greenhouse gas statements. ISO. https://www.iso.org/standard/66455.html

Isometric. (n.d.). Isometric — Glossary: Defining the terms that appear regularly in our work. Isometric. https://isometric.com/glossary

Matthews, J.B.R. (Ed.). (2018). IPCC, 2018: Annex I: Glossary [Matthews, J.B.R. (ed.)]. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of... Cambridge University Press. https://doi.org/10.1017/9781009157940.008

U.S. Environmental Protection Agency. (2023, April 18). Understanding Global Warming Potentials | US EPA. Environmental Protection Agency. Retrieved June 14, 2023, from https://www.epa.gov/ghgemissions/understanding-global-warming-potentials