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Energy Use Accounting
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This moduleModule describes how energy-related emissions must be calculated infor aCarbon carbonDioxide removalRemoval (CDR) projectprojects soas thatpart theyof canproject begreenhouse subtractedgas in(GHG) the net CO2eremoval calculationaccounting. Furthermore,This this moduleModule applies to all carbon removalCDR pathways, ensuring a consistently rigorous standard in how energy-related emissions are quantified and reported between different carbon removal projects and approaches.
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.
[math:The CO_2e_{Energy\emissions R}]associated with energy use must account for all operations and support systems that consume energy within the removalCDR processproject processes, through the usage of both electricity and fuel. Emissions associated with energy use for examplea through electricity or fuelRemoval, as[math: specified in Section 3 of this module. These operations and support systemsR], are denotedwritten hereafter as [math: kCO_2e_{Energy,R}].
PrimarilyPrimary 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 martimemaritime mobile emission sources are excluded from the calculation of [math: kCO_2e_{Energy,R}], such as electric or diesel vehicles, as they are accounted for in [math: CO_2e_{Transportation,\ R}]. Refer to the Transportation Emissions Accounting Module for the calculation guidelines.
Refer to Transportation Emissions Accounting Module for the calculation guidelines.
Where possible, project proponentsIt should accountbe 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 emissionproject impactsoperations are accounted for separately within the scope of electricity usage based on the sameEmbodied gridEmissions regionsAccounting (wellModule.
Refer distributionto andEmbodied useEmissions areas)Accounting as endorsed by national governments. For facilities within projects that consume large quantities of electricity, known as intensive facilities, accountingModule for the consequentialcalculation emission impacts of electricity usage may also be required. More details on when this is applicable can be found in Section 3.2.1guidelines.
Emissions associated with energy usage include the use of both electricity and fuel. The following potentialcalculation emissionsapproach sourcesmust 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_{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.
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].
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).
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).
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:
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.
Forpower intensiveprocurement
A project may reduce its energy emissions through the direct procurement of low-carbon power. fromProject individualProponents generatorswill arebe consideredresponsible asfor partproviding sufficient documentation to allow for the discounting of thisproject approach.
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.
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,\ 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:
Electricity consumption may beis subdivided into consumption of 'Qualified' electricity‘qualified’ and '‘non-Qualified'qualified’ electricity:
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 (i) owned and operated by a third-party, (ii) directly connected to The Project, and (iii) does not contribute to transmission on emissionsthe fromlocal electric grid. Under these circumstances, the entireelectricity 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 behind-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 "behind-the-meter" generators to the grid via hourly marginal emissions analysis
Towill 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 used on-site by The Project.
Qualified', electricity must meet all of the following eligibility criteria:
Criteria | Description | Documentation required (non-intensive facilities) | Documentation required (intensive facilities) |
|---|---|---|---|
[G-RMPA-0, Projects must obtain the electricity via contract purchase and provide the EAC purchase contract and retirement certificates; for intensive facilities, provide a Power Purchase Agreement identifying the physical source and type of generation, the location and grid region, the commissioning date, and the PPA date.]EC1[/G-RMPA-0] | The electricity utilized is |
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[G-C9HZ-0, Projects must obtain and retire all EACs tied to the claimed electricity and provide the retirement certificates, except EACs required to be transferred to the load-serving entity under a Clean Electricity Standard (not exceeding the CES-attributable increase), with the applicable CES documentation.]EC2[/G-C9HZ-0] | The Project has acquired and retired all RECs or similar EACs associated with the claimed electricity, except those that are transferred to a load-serving entity to meet the requirements of a jurisdictional clean electricity standard (CES) or similar government policy, and must submit sufficient proof that this has occurred. |
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[G-ZYDM-0, Projects must
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| ]EC3[/G-ZYDM-0] | The generating facility from which the claimed electricity is sourced entered service no more than | Evidence that the generating facilities identified in the RECs/EACs entered service no more than 36 months before The Project was initiated. | One of the following:
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[G-KK99-0, Projects must demonstrate the electricity is physically deliverable — the Project |
| Provide the location of the | One
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[G-784Y-0, Projects must demonstrate temporal matching: non-intensive facilities — generation no more than 12 months before consumption (up to 18 months under evidenced market constraints); intensive facilities — hourly matching where possible, or no more than 12 months where FID was reached before 2030 and EC6 is met.]EC5[/G-784Y-0] | If The Project is classified as a non-intensive facility (see Section 5.1), the electricity must be generated no more than one year prior to the point of consumption by The Project. If The Project is classified as an intensive facility (see Section 5.1), wherever possible, the electricity must be generated in the same hour for which it is claimed. In cases where this is not possible, it will be permitted for projects classified as an intensive facility to use electricity which was generated no more than one year prior to the point of consumption by The Project. | Provide documentation of power procurement proving that generation of the claimed electricity occurred no more than one year prior to the point of consumption by The Project | One of the following:
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The
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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.
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.
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:
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.
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:
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:
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:
In cases wherefrom the Projectregistry page associated with each credited removal.
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.
In cases where the Project seeks to establish deliverability between two adjacent grid regions, the Project must provide:
Emission[math: f_{grid}] - emissions factors used must:
[math: f_p] - emissions factors used must:
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 Model1^2, California Air Resources Board modified GREET model (CA-GREET)2^3, Ecoinvent database3^4, US Federal Life Cycle Inventory database or LCA Commons4^5, and similar databases used in common life cycle assessment (LCA) 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.
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:
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 marginal emission rate to all net electricity consumption from the grid.
Emission rates must not:
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.
PrimaryThe measurementsprimary measurement considered in calculation of electricity emissions areis:
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.
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:
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.
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:
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:
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.
Refer to Embodied Emissions Accounting Module for the calculation guidelines.
Waste heat utilization must meet all of the following criteria to be considered true waste heat, and be exempt from GHG emissions accounting:
Criteria | Description | Documentation | |
|---|---|---|---|
[G-8YQG-0, Projects must demonstrate that the heat is provided from an off-site source - evidenced by contracts for waste heat provision.]EC6[/G-8YQG-0] | Heat is provided from an off-site source. |
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[G-WKK5-0, Projects must demonstrate that they don't pay for the heat, or they pay only for the cost associated with delivering the heat - evidenced with waste heat provision contract.]EC7[/G-WKK5-0] | The end-user does not pay for the heat, or only pays for the costs | See EC6 requirements. A cost structure for the contract purchase price | |
[G-G8ET-0, Projects must demonstrate that the heat is 'unavoidable waste heat', meaning that the delivered thermal energy cannot be recovered inside the same process, be reduced through the use of more efficient equipment or other efficiency measures, or be supplied to another co-located non CDR-industrial process - evidenced with an affidavit from waste heat supplier.]EC8[/G-G8ET-0] | The waste heat is
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[G-3XAF-0, Waste heat | Waste heat must be a byproduct of an operation or process. Heat cannot be the intended output of a process, such as in a combined | Copy of contract and information required as indicated in EC6. |
Emission[math: f_{fuel,k}] - emissions factors used must:
Acceptable emission factors include those utilized in the Argonne National Laboratory GREET Model1^2, California Air Resources Board modified GREET model (CA-GREET)2^3, Ecoinvent database3^4, US Federal Life Cycle Inventory database or LCA Commons4^5, 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 Combustion74, US EPA AP-4285, or US EPA MOVES Model96 (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.
PrimaryThe measurementsprimary measurement considered in calculation of fuel emissions areis:
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:
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.
Isometric would like to thank following contributors to this moduleModule:
Isometric would like to thank following reviewers of this module:
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.
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.
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:
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:
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.
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 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:
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.
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