science-based target setting
METHODOLOGYOVERVIEW& CONSULTATION
An initiative by
Agenda & Objectives
objectives
agenda
An initiative by
• To present an overview of the science-based target setting initiative
• To present an update on the sectoral decarbonisation approach (SDA) developed
by Ecofys
• To discuss next steps with this initiative and opportunities to get involved
a)
b)
c)
d)
About this initiative
Sector-decarbonisation approach (SDA) – overview
Next steps
Questions & Answers
(5 min)
(25 min)
(10 min)
(20 min)
Mind the Science, Mind the Gap - Overview
goal
To raise the ambition of corporate GHG reduction targets to support a transition to a
low carbon economy and keep the planet below a 2 degree temperature rise
objective
Enable science-based GHG reduction targets to become standard business
practice for businesses
expected
outcomes
a) By the end of 2015 a group of leading multinational companies will have
commited to adopt science-based emissions reduction targets.
b) This initiative will also demonstrate to policy-makers the scale of ambition among
leading companies to reduce their emissions and act as a positive influence on
international climate negotiations.
An initiative by
Mind the Science, Mind the Gap - Overview
An initiative by
mind the science
mind the gap
Mind the Science, the first phase of
this initiative, intends to provide
tools & guidance for companies to
set emission reduction targets in line
with climate science.
Mind the Gap, the second phase of
the initiative, intends to encourage
businesses to adopt emission
reduction
targets
that
are
consistent with a 2ºC threshold.
Mind the Science, Mind the Gap - Overview
steering
committee
technical
advisory group
Bill Baue
Bryan Jacob
Chris Tuppen
Edward Butt
Edward Cameron
Emma Stewart
Geoff Lye
Guy Rickard
Heidi Huusko
Jed Davis
Jeff Gowdy
An initiative by
Kevin Moss
Kevin Ravinovitch
Larry Merritt
Mark McElroy
Mario Abreu
Michael Alexander
Tim Juliani
Stweart van Horn
technical
consultant
supporter
Mind the Science, Mind the Gap - Overview
methodology
An initiative by
high level exec.
summary
website
Science-based target setting overview
Global Emissions
49
GtCO2
ss
ine
Bus
2ºC
U
(BA
ual
s
u
as
em
issi
)
Business as usual scenario
• emissions increased by 2.2% on average every year
• reach 3.7 to 4.8ºC of global warming by the end of the century
ons
14 to 29
tra
jec
GtCO2
tor
y
2ºC Carbon Budget
2010
An initiative by
Time
2ºC scenario
• In 2050, 41 to 72% lower emissions than in 2010
• 2ºC carbon budget for the period 2011-2050 is in the range of 530
– 1300 GtCO2 (144 – 354 GtC)
2050
Science-based target setting overview
1. Absolute targets
2. Value-added
approach
Carbon
Intensit
y Secto
ri
Ca
rbo
n In
te n
sity
Sec
tor
j
C
ar
bo
n
In
te
ns
ity
Se
ct
or
2ºC Carbon Budget
k
2ºC
em
issi
on
s tr
14 to 29
aje
cto
GtCO2
ry
Ca
rbo
n
(tC Inten
2ºC
O2
s
em
/ U ity
issi
SD)
on
s tr
aje
cto
ry
2ºC Carbon Budget
(530 to 1300 GtCO2)
2010
Time
2ºC Carbon Budget
2050
10 – 18% per decade (compared
to 2010) based on IPCC AR5
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Global Emissions
GDP
Global Emissions
Global Emissions
49
GtCO2
3. Sectoral
decarbonisation
approach
2010
Time
2050
Generic decarbonisation pathway
based on 2ºC carbon budget and
expected economic growth
2010
Time
2050
Sector-specific
decarbonisation
pathway based on 2ºC carbon
budget, expected sector activity
and mitigation potential
Sectoral Decarbonisation Approach – Overview
This methodology provides a sector-based approach
for companies to set GHG reduction targets necessary
to meet a global 2°C temperature rise.
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The
Sectoral
Decarbonisation
Approach (SDA) is a freely available
open-source methodology that allows
companies to set emission reduction
targets
in
line
with
a
2oC
decarbonisation scenario. It is based
on the 2oC scenario (2DS) developed
by the International Energy Agency
(IEA) as part of its publication, Energy
Technology Perspectives 2014 (IEA,
2014).
Sectoral Decarbonisation Approach – Overview
Highlights:
Temperature
increase
threshold
Representative
Concentration
Pahway
Global Carbon
Budget
Sectoral
Carbon
Budget
SDA Approach (Methodology & Tool)
Science-based targets
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Sectoral
Activity
Projections
Sectoral
Intensity
Input entered by
the company
• 2ºC as temperature threshold for the
methodology
• 450 ppm as emissions threshold from RCP 2.6
• 1055 GTCO2e as cumulative budget
(2010-2050) – From IEA ETP 2014
• Sector-specific budget & activity
projections are obtained from 2DS
modelling (peak & decline)
Sectoral Decarbonisation Approach –Assumptions
1.
2.
3.
4.
5.
6.
7.
The carbon intensity of each company in a homogeneous sector will converge with the
sectoral carbon intensity in 2050.
The SDA methodology intrinsically accounts for regional differences regarding level of
activity and carbon intensity but not explicitly in relation to historical responsibility
Economic growth is decoupled from demand for energy and materials.
Added value of individual heterogeneous sectors is assumed to grow proportional to
GDP growth.
Added value is defined as gross profit, which equals revenue minus cost of sold goods
and services.
Emissions from heat, steam, and cooling are negligible compared with those of
electricity; this also holds for the longer term.
Road vehicles are assumed to have a lifetime of 15 years; the carbon efficiency of new
vehicles is calculated based on this assumption.
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Sectoral Decarbonisation Approach – Coverage
About 60% of the global
GHG emissions are covered
by the SDA methodology.
• Fossil fuel extraction and
production not covered
• Emissions
from
the
residential
sector
(buildings) not covered
• LULUCF
emissions
not
covered (in version 1)
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Sectoral Decarbonisation Approach – 2DS Decarbonisation Pathway
1055 GTCO2e
SDA
coverage
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Sectoral Decarbonisation Approach – Sectoral Breakdown
Services
Heterogenous
Services / Commercial buildings
Other transport
Aviation
Transport
Homogenous
Heterogenous
Industry
$ value-added
$ value-added
Passenger-kilometer
Rail passenger transport
Passenger-kilometer
Heavy road passenger transport
Passenger-kilometer
Light road passenger transport
Passenger-kilometer
Other Processing & Manufacturing
Industries
$ value-added
Chemicals & Petrochemicals
$ value-added
Pulp & Paper
Tonne of paper & cardboard
Aluminium
Tonne of aluminium
Iron & Steel
Tonne of steel
Cement
Tonne of cement
Power generation
MWh
Homogenous
Energy
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Sectoral Decarbonisation Approach – Compression & Convergence
Homogenous
Heterogenous
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The methodology assumes that the carbon intensity for the
companies in all homogeneous sectors tend to converge in 2050.
The rate of convergence depends on the differential between the
carbon intensity of the company and the 2ºC carbon intensity of
the sector. This differential declines linearly over time until 2050,
when the carbon intensity of all companies is the same as the 2ºC
carbon intensity for the sector.
For more heterogeneous sectors the methodology uses valueadded as an indicator of activity in the sector. ‘Gross profit’ is used
as a proxy for value-added. In the absence of more sector-specific
decarbonisation pathways, a reasonable alternative is to depict
how the carbon-intensities of different companies would compress
in order to be within a broad 2ºC carbon budget.
Sectoral Decarbonisation Approach – Scope 2 Target
Consumption of electricity represents the vast majority of Scope 2
emissions and the lack of 2ºC decarbonisation models for the heat
and steam sectors, the indirect GHG emissions from consumption of
purchased electricity is used as a proxy for Scope 2 emissions
Taking the total electricity consumption at the sector level, the 2ºC
budget for the generation of this electricity (i.e. using the 2ºC
carbon intensity indicator for the power sector), and the total
sectoral activity, it is possible to estimate the Scope 2 carbon
intensity for a sector.
Scope 2 emissions (and carbon intensity) for a company can be
derived using the principle of compression (heterogenous sector) or
convergence (homogenous sectors)
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Sectoral Decarbonisation Approach – Scope 2 Target
Consumption of electricity represents the vast majority of Scope 2
emissions and the lack of 2ºC decarbonisation models for the heat
and steam sectors, the indirect GHG emissions from consumption of
purchased electricity is used as a proxy for Scope 2 emissions
Taking the total electricity consumption at the sector level, the 2ºC
budget for the generation of this electricity (i.e. using the 2ºC
carbon intensity indicator for the power sector), and the total
sectoral activity, it is possible to estimate the Scope 2 carbon
intensity for a sector.
Scope 2 emissions (and carbon intensity) for a company can be
derived using the principle of compression (heterogenous sector) or
convergence (homogenous sectors)
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Sectoral Decarbonisation Approach – Scope 2 Target
2ºC Carbon Intensity - Aluminium Sector - Scope 2 (IEA 2DS, 2014)
8
Consumption of electricity represents the vast majority of Scope 2
emissions and the lack of 2ºC decarbonisation models for the heat
and steam sectors, the indirect GHG emissions from consumption of
purchased electricity is used as a proxy for Scope 2 emissions
7
6
5
Power intensity (TWh / Mt aluminium)
4
Scope 2 Carbon Intensity (tCO2 /
tAluminium)
3
Taking the total electricity consumption at the sector level, the 2ºC
budget for the generation of this electricity (i.e. using the 2ºC
carbon intensity indicator for the power sector), and the total
sectoral activity, it is possible to estimate the Scope 2 carbon
intensity for a sector.
2
1
0
2011
2020
2025
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2030
2035
2040
2045
2050
Scope 2 emissions (and carbon intensity) for a company can be
derived using the principle of compression (heterogenous sector) or
convergence (homogenous sectors)
Sectoral Decarbonisation Approach – Scope 3 Target
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Scope 3 category
Direction to set targets in line
with a 2°C pathway
Category 1: Purchased
goods and services
A target can be set based on the 2
°C pathway of the applicable
supplier sector (e.g. the chemical
sector for companies purchasing
chemical compounds).
Category 6: Business
travel
A target can be set based on the
2°C pathway of the light passenger
transport and aviation sector.
Category 8: Upstream
leased assets
A target can be set based on the
2°C pathway of the service buildings
sector.
Sectoral Decarbonisation Approach – Step by Step
Select base-year and
target-year
Scope 1
Scope 2
Estimate the carbon
intensity of the company
using activity data and
Scope-1 emissions in the
base-year*
Forecast activity in the
base and target year for
each sector where the
company operates
Estimate the carbon
intensity of the company
using activity data and
Scope-2 emissions in the
base-year
Estimate the target
carbon intensity (Scope
1) based on the 2ºC
sector intensity (Equation
1)
Indicate electricity
consumption in base
year
Estimate the target
carbon intensity (Scope
2) based on the 2ºC
sector intensity (Equation
1)
Estimate the 2ºC carbon
budget (Scope 1) by
multiplying the target
carbon intensity times the
activity forecasted
Add Scope 1 and Scope
2 budgets to estimate the
overall (Scope 1+2)
budget in the target year
Estimate the 2ºC carbon
budget (Scope 2) by
multiplying the target
carbon intensity times the
activity forecasted
*A company should disclose all GHG
emissions in base year.
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Identify sector(s)
applicable to the
company
Update target
periodically to reflect
changes in the company
structure / growth
predictions
Sectoral Decarbonisation Approach –Areas for further development
• Structural parameters within sectors
to more accurately account for
deviations from a sector’s average
structure
• Additional scope 3 emissions
categories
• Additional sectors that have sectorspecific
science-based
2ºC
decarbonisation pathways
This methodology provides a sector-based approach
for companies to set GHG reduction targets necessary
to meet a global 2°C temperature rise.
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Sectoral Decarbonisation Approach – Public Consultation
October 23rd
www.sciencebasedtargets.org
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Sectoral Decarbonisation Approach – Engagement Opportunities
Comment
•
•
•
Test the methodology
Challenge its assumptions
Suggest improvements
Share
•
•
•
Share the methodology
Invite other businesses to use it
Let peers know about the public consultation
Inspire
•
Opportunities to showcase companies already setting science-based targets
(e.g. website, webinars, video, side-events, etc.)
•
We are looking for funds to support this work through the different activities
that have been planned (guidance, monitoring, benchmarking, capacity
building, etc.)
Support
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discussion
METHODOLOGYOVERVIEW& CONSULTATION
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