1. What Is a Carbon Footprint Inventory? 

A carbon footprint inventory is a method used to assess and track the activities and emission performance related to carbon emissions for organizations, companies, or individuals. It is a systematic process that focuses on identifying sources related to greenhouse gas emissions, collecting data, quantifying emissions, and compiling a complete greenhouse gas emissions report.

The inventory mainly targets greenhouse gases related to carbon dioxide and climate change. The emission sources include greenhouse gases generated from energy use and industrial activities, such as carbon dioxide (CO₂), nitrous oxide (N₂O), methane (CH₄), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF₆), and nitrogen trifluoride (NF₃). It also covers other climate-related gases emitted from human activities, such as energy consumption, transportation, and industrial production processes.

General Steps of a Carbon Footprint Inventory

• Identification of Key Areas
  Identify the major emission sources and operational boundaries to clearly understand where carbon emissions originate, which helps in establishing appropriate emission reduction strategies and targets.

• Data Collection
  Collect data related to carbon emissions, including energy consumption, fuel usage, production processes, and waste emissions.

• Data Analysis
  Analyze the collected data to calculate carbon emissions and convert them into quantified emission values. This process can be conducted using emission factors and calculation tools.

• Development of Carbon Reduction Plans
  Based on the identified key areas, develop emission reduction plans and implement appropriate measures to reduce carbon emissions.

• Monitoring and Reporting
  Regularly monitor carbon emissions and report the results to relevant stakeholders. This helps track progress and ensures that emission reduction targets are being achieved.

• Third-Party Verification
  Through independent third-party verification bodies, the final reported emission data and the reliability of internal procedures are verified, and an official third-party verification report is issued to ensure data credibility. 

The purpose of conducting a carbon footprint inventory is to help organizations and individuals better understand their emission profiles, identify carbon reduction opportunities, and reduce greenhouse gas emissions. Many companies and government institutions adopt carbon footprint inventories as a foundation for developing sustainable development strategies and emission reduction targets. This contributes to global efforts to reduce greenhouse gas emissions and address the challenges of climate change.

2. What Are the Most Common Types of Carbon Footprint Inventories? 

The most common types of carbon footprint inventories are mainly classified into three major categories, including ISO 14064-1 organizational greenhouse gas inventories, ISO 14064-2 project-based greenhouse gas emission reduction and removal enhancement, and ISO 14067 product carbon footprint research and reporting. 

ISO 14064-2 is a standard used for the quantification, monitoring, and verification of greenhouse gas (GHG) emission reductions and removals from specific projects or activities. It focuses on project-level carbon management. The key features and scope of ISO 14064-2 are as follows: 

1. Scope and Applicability

1. • Applicability:
     ISO 14064-2 is primarily applied to the carbon emission assessment of specific projects or activities, such as construction projects, renewable energy projects, and forest carbon sequestration projects, to quantify emission reductions and removals within a defined period.

   • Scope:
     This standard focuses on the entire project lifecycle, including construction, operation, and any phases where emission removals may occur.

2. Objectives

1. • Purpose:
     The main objective of ISO 14064-2 is to quantify the greenhouse gas emission reductions and removals achieved by specific projects in order to support the development of mitigation strategies and carbon offset programs. It can also be used to verify the effectiveness of project-based emission reduction activities.

3. Data Collection and Quantification

1. • Data Collection:
     Project-based carbon accounting requires the collection of project-specific data, including operational activities, manufacturing processes, energy consumption, material usage, and transportation.

   • Quantification Methodology:
     ISO 14064-2 requires the use of internationally recognized calculation methodologies to quantify project emissions and to assess emission reductions and removals.

4. Verification and Reporting

1. • Verification:
     Independent third-party verification is typically required to confirm the accuracy of the project’s emission reductions and removals.

   • Reporting:
     The results of project-based carbon accounting are usually reported to project stakeholders to support project management and emission reduction initiatives.

The three carbon footprint standards differ in the following aspects: 

•  Object:

1.ISO 14064-1 applies to the entire organization.

2.ISO 14064-2 applies to specific projects.

3.ISO 14067 applies to specific products or services.

•  Scope:

    1.ISO 14064-1 requires organizations to consider all business activities.

    2.ISO 14064-2 focuses on the entire project lifecycle.

    3.ISO 14067 focuses on the full life cycle of a product.

•  Purpose:

  1.ISO 14064-1 aims to establish an organization’s greenhouse gas inventory and support carbon management strategies.

  2.ISO 14064-2 is used for the assessment and verification of emission reductions and removals during a project period.

  3.ISO 14067 focuses on evaluating environmental impacts and product carbon footprints.

•  Data Collection and Calculation:

Each standard has specific requirements for data collection and calculation, depending on the nature of the assessment.

• Verification and Reporting:

ISO 14064-1, ISO 14064-2, and ISO 14067 all allow for independent third-party verification, but they have different reporting requirements to support transparency and public disclosure.

In summary, these three carbon footprint standards serve different application purposes in corporate and environmental management. They help organizations comprehensively understand organizational emissions, project-based emission reductions, and product environmental impacts. Selecting the appropriate standard depends on the type of assessment and its specific objectives, in order to support sustainable development and climate mitigation efforts. Companies can choose the most suitable standard based on their strategic goals and management needs to better manage environmental impacts and reduce emissions.

Introduction to the Differences Between Organizational, Product, and Project-Based Carbon Footprint Assessments 

These three types of carbon inventories are all methods for evaluating and managing carbon emissions. Their main differences are in the scope of application and purpose:

1. Organizational Carbon Inventory:

1. • Organizational carbon inventory is the evaluation and management of carbon emissions for the entire organization or company. This type of inventory usually involves collecting and analyzing carbon emission data from various organizational activities, including production, transportation, and supply chains.

   • The purpose is to help organizations understand their own carbon footprint, set emission reduction strategies and targets, and implement related measures to reduce carbon emissions.

2. Product Carbon Inventory:

• Product carbon inventory is the evaluation and management of carbon emissions throughout the life cycle of a product. This type of inventory considers the carbon emissions from manufacturing to use and disposal in the entire process.

• The purpose is to help companies evaluate the carbon footprint of their products, identify emission reduction opportunities, and reduce carbon emissions through product design and supply chain management.

3. Project Carbon Inventory:

• Project carbon inventory is the evaluation and management of carbon emissions for specific projects or activities. This type of inventory can be applied to construction projects, event organization, event hosting, and other types of projects.

• The purpose is to evaluate the carbon footprint of projects or activities, identify emission reduction opportunities, and take measures to reduce carbon emissions during project planning and implementation.

These three types of carbon inventories are all important tools for evaluating and managing carbon emissions. They help organizations and companies understand their carbon footprints, formulate emission reduction strategies, and achieve sustainable development goals. 

Organizational Carbon Inventory and Product Carbon Inventory are two important concepts in greenhouse gas management, and they differ in scope and objectives. 

1. Organizational Carbon Inventory (commonly based on ISO 14064-1): 

Organizational carbon inventory refers to the inventory and management of greenhouse gas emissions of an entire organization. It mainly focuses on the organization’s overall activities, manufacturing processes, and operational processes, and usually includes Scope 1, Scope 2, and Scope 3 emission sources as defined by the GHG Protocol, which correspond to ISO 14064-1 emission categories 1 to 6 (please refer to the classification of emission sources and definition diagram). Among them, direct emissions belong to Category 1, which include emissions generated from internal organizational activities, such as carbon dioxide emissions produced by fuel combustion. Indirect emissions include Categories 2 to 5, covering emissions indirectly affected by organizational activities, such as emissions from purchased electricity use (Category 2), emissions from supply chain product manufacturing and transportation processes (Category 3), emissions from non-energy product use (Categories 4 and 5). In addition, Category 6 refers to indirect emissions related to land use change. This type of inventory is mainly used to help organizations identify projects, calculate emissions, evaluate emission hotspots, and overall carbon footprints (carbon footprints are mainly applied to product carbon inventory), formulate emission reduction strategies, and achieve climate neutrality targets. 

2. Product Carbon Inventory (commonly based on ISO 14067):

Product carbon inventory refers to the boundary definition, calculation, evaluation, and management of the carbon footprint of a single product. It focuses on the entire life cycle of the product, including all stages from raw material procurement, production, transportation, and use to final disposal or recycling. Through product carbon inventory, enterprises can understand the impact of products on climate change and further improve product design, production, and supply chain management in a targeted manner in order to reduce the carbon footprint of products.

3. Boundary Differences:

• Organizational Carbon Inventory (ISO 14064-1):
  Organizational carbon inventory covers the greenhouse gas emissions of the entire organization. This means that it considers all activities of the organization, and the total emissions within a specific period (base year) are included from production to operational management.

• Product Carbon Inventory (ISO 14067):
  Product carbon inventory focuses on the greenhouse gas emissions within the life cycle of a single product. This includes emissions from raw material extraction, production, transportation, use, and disposal stages. Product carbon inventory not only focuses on the product itself but also covers the related supply chain and services. It not only includes emissions generated from the enterprise’s own product manufacturing but also includes upstream and downstream supply chains and services related to the product, the use of various raw materials and consumables, energy use, operating value contribution, and the allocation of resources proportionally according to a certain allocation principle.

4. Objectives:

• The objective of organizational carbon inventory is to evaluate the carbon footprint of the entire organization in order to formulate comprehensive emission reduction strategies. Through this type of inventory, organizations can identify and implement targeted emission reduction measures, improve efficiency, and achieve climate goals.

• The objective of product carbon inventory is to evaluate the carbon footprint of a single product throughout its entire life cycle. This helps enterprises understand the environmental impacts of products, optimize product design and production processes, and provide consumers with environmentally friendly choices.

5. Application Scope:

• Organizational carbon inventory is usually conducted by large enterprises or organizations because it requires extensive inventory and management of the entire organization. This type of inventory can help organizations achieve climate objectives and enhance corporate social responsibility image.
  
  

• Product carbon inventory is applicable to any enterprise that produces and provides products, regardless of scale. From large manufacturers to small handicraft shops, any enterprise can evaluate and improve the environmental performance of its products through product carbon inventory.

Carbon inventory is a professional tool for assessing and managing carbon emissions. Its main purpose is to help organizations and enterprises understand their current emission conditions, identify emission-reduction opportunities, and formulate corresponding reduction strategies and action plans. When an enterprise plans to introduce carbon inventory, it must consider the purpose in order to decide how to arrange the implementation and to meet the needs of various stakeholders and expected users. The explanations for each target group are as follows: 

1.Carbon Tax

• Carbon tax is a punitive tax intended to encourage enterprises to reduce carbon emissions. Through greenhouse gas inventory, enterprises can identify and reduce carbon emissions, thereby avoiding or reducing the payment of carbon tax and lowering costs.

2. Customer Requirements

• Many customers require enterprises in their supply chains to conduct carbon inventory to ensure the sustainability of products and services. Therefore, greenhouse gas inventory can meet customer requirements and enhance cooperation trust between enterprises and customers.

3. Executive Commitments (ESG)

• Many enterprises have made commitments in Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG), including carbon reduction. Through greenhouse gas inventory, enterprises can fulfill these executive commitments and enhance corporate image and brand value.

4. Government (Regulations)

• Many governments have established regulations and standards related to carbon emissions, requiring enterprises to conduct carbon inventory and report their emission data. Therefore, greenhouse gas inventory is a necessary step for enterprises to comply with regulatory requirements.

5.Suppliers

• Some enterprises require their suppliers to conduct greenhouse gas inventory in order to ensure the sustainability and environmental protection of the entire supply chain, and to meet the enterprises’ CSR and ESG commitments.

6.Financial Institutions

• Financial supervisory authorities may require financial institutions to conduct greenhouse gas inventory to assess the climate risks and sustainability of their investment portfolios, and to ensure the stability and sustainable development of the financial system.

7.Parent Companies

• Subsidiaries may be subject to the requirements of their parent companies and need to conduct greenhouse gas inventory in order to comply with the parent companies’ CSR policies and ESG sustainability reporting carbon reduction targets, and to enhance the overall image and value of the corporate group.

Organizational Boundary Definition for Organizational GHG Inventory 

1. Inventory Reporting Boundary: Definition of Organizational Emission Coverage 

(1) Definition of Related Parties
For group-structured companies, the parent company, subsidiaries, and entities under control relationships shall be included within the reporting boundary. In particular, the inclusion of emission sources shall follow the principle of materiality to ensure proper coverage of significant emission sources.

(2) Financial Reporting Consistency and Emission Inclusion
To ensure the effectiveness of reduction performance comparison based on a baseline year, the organizational inventory report must clearly define both the reporting scope and the included emission sources. Only with consistent boundary definitions can emission reduction performance be accurately calculated and interpreted.

(3) Avoidance of Double Counting
To prevent duplicate carbon liability recognition and repeated reporting of reduction achievements across different companies within a corporate group, mechanisms must be established to avoid double counting of emissions and corresponding reduction results.

The Organizational Carbon Inventory Process Is Structured into Two Major Phases: Qualitative and Quantitative Operations 

1. Qualitative Operations: Non-Quantitative Preparatory Steps for Greenhouse Gas Accounting 

(1) Kick-off Meeting:
The kick-off meeting typically includes defining the objectives and scope of the carbon inventory, confirming the project timeline and budget, identifying relevant stakeholders participating in the inventory, and establishing a preparatory working group.

(2) Top Management Commitment:
This includes securing senior management support and commitment to the carbon inventory, ensuring adequate allocation of resources and support, and formally establishing the objectives and targets of the inventory.

(3) Establishment of a Steering Committee:
This involves setting up a dedicated governance unit responsible for supervising and guiding the implementation of the carbon inventory to ensure compliance with expected objectives and standards.

(4) Organizational Boundary Setting:
The organizational scope and boundaries of the carbon inventory are defined, including all relevant business units, activities, and locations. Personnel training and education are also conducted to ensure participants clearly understand the objectives and procedures of the inventory.

(5) Emission Source Identification:
The sources and categories of greenhouse gas emissions are identified. Corresponding inventory templates, checklists, and significant emission source lists are established to support subsequent quantitative assessment work.

2. Quantitative Operations: Quantification of Quality Indicators and Data Indicators (Including Procedural Management Standards)

(1) Activity Data Collection:
Collect activity data related to greenhouse gas emissions and complete the relevant inventory tables, checklists, and significant emission source lists to support subsequent emission calculations.

(2) Selection of Emission Factors:
Select appropriate emission factors for different types of activities and complete the corresponding inventory tables, checklists, and significant emission source lists.

(3) Emission Calculation:
Calculate greenhouse gas emissions based on the collected activity data and selected emission factors.

(4) Establishment of the Emissions Inventory:
Organize and consolidate the calculated emission data to establish a formal greenhouse gas emissions inventory for subsequent reporting and analysis.

(5) Data Quality Management:
Conduct quality management and verification of the data, including ensuring accuracy, completeness, and consistency, and prepare the relevant inventory reports and internal audit plans.

(6) Documentation of Procedures:
Document the inventory procedures and workflows, including the preparation of the inventory report and internal audit plan, for future review and verification.

(7) Internal Verification Plan:
Establish an internal audit plan and conduct internal audits of the carbon inventory to ensure that the inventory work complies with the expected standards and requirements.

(8) External Verification Plan:
Arrange for external verification of the carbon inventory by an accredited independent third-party verification body to ensure the credibility and recognition of the inventory results.

• Special Note: Clarification of the Commonly Confused Concepts of “Scope 1–3” and “Category 1–6” 

The GHG Protocol (Greenhouse Gas Protocol) and ISO 14064-1: Greenhouse Gas Emissions and Removals are two different standards used for quantifying and reporting greenhouse gas emissions. They share certain similarities, but also have important differences. The following explains the distinctions between their scopes and categories: 

Scopes under the GHG Protocol

(1) Scope 1 – Direct Emissions:
These are emissions from sources that are owned or directly controlled by the company, such as emissions from on-site industrial processes, stationary combustion, and company-owned vehicles.

(2) Scope 2 – Indirect Energy Emissions:
These refer to emissions associated with the generation of purchased electricity, steam, heating, or cooling that is consumed by the company, such as emissions from electricity purchased from power utilities.

(3) Scope 3 – Other Indirect Emissions:
These include all other indirect emissions related to the company’s activities, such as emissions from the value chain, including purchased goods and services, business travel, employee commuting, and upstream and downstream trading relationships. Scope 3 is further subdivided into Category 1–15.
(Please refer to the GHG Protocol Scope 3 value chain categories, Categories 1–15.)

• Categories under ISO 14064-1:

Unlike the GHG Protocol, which further subdivides the value chain under Scope 3 into Categories 1–15, ISO 14064-1 classifies greenhouse gas emissions into different categories, which generally correspond to the scopes defined under the GHG Protocol:

1.Category 1 – Direct Emissions
This category corresponds to Scope 1 under the GHG Protocol and includes emissions from sources that are directly owned or controlled by the organization.

2.Category 2 – Energy Indirect Emissions
This category corresponds to Scope 2 under the GHG Protocol and refers to indirect emissions resulting from externally supplied energy, such as purchased electricity, that is related to the organization’s activities.

3.Category 3 – Transportation Indirect Emissions
This category corresponds to Scope 3 under the GHG Protocol and includes emissions arising from internal and external transportation activities, as well as employee commuting, that are associated with the organization’s operations.

4.Category 4 – Upstream Indirect Emissions from Purchased Products and Services
This category also corresponds to Scope 3 under the GHG Protocol and includes emissions resulting from upstream supply chain activities, such as emissions from purchased raw materials, requested services, and other upstream procurement-related activities.

5.Category 5 – Downstream Indirect Emissions from Products Provided by the Organization
This category likewise corresponds to Scope 3 under the GHG Protocol and includes emissions generated from downstream supply chain activities, such as emissions associated with customers, provided products, raw material supply, and service delivery.

6.Category 6 – Other Emission Sources
This category includes all other emission sources not covered under Categories 1–5, such as emissions arising from subsidiaries and group-controlled companies.
(Please refer to ISO 14064-1 value chain classifications, which map mainly to Categories 3–6.)

• Distinction Between ISO 14064-1 and the GHG Protocol:

The GHG Protocol scopes and the ISO 14064-1 categories are conceptually similar in that both classify greenhouse gas emissions into direct emissions, indirect emissions, and other indirect emissions. However, the primary difference between the two frameworks lies in the level of detail applied to other indirect emissions.Under the GHG Protocol, Scope 3 is further subdivided into Categories 1–15, providing a more detailed breakdown of value chain emissions. In contrast, ISO 14064-1 consolidates indirect emissions into Categories 2–6, offering a broader classification structure.

Although both the GHG Protocol and ISO 14064-1 serve as frameworks for sustainability reporting and greenhouse gas emissions accounting, they differ significantly in terms of application, verification requirements, scope of applicability, and the level of methodological detail. Therefore, it is essential for organizations to select the most appropriate standard based on their specific operational needs and regulatory or reporting requirements.

What Data Should Be Prepared in Advance for an Organizational Greenhouse Gas Inventory?

(Using the GHG Protocol Accounting Framework as an Example)

Against the background of promoting corporate sustainability and responding to global climate change risks, conducting a Greenhouse Gas Inventory has become an indispensable task for all types of organizations. Whether it is to respond to government carbon policies, participate in carbon disclosure initiatives (such as CDP), set Science-Based Targets (SBTi), or comply with international disclosure standards (such as IFRS S2), accurate and systematic greenhouse gas accounting must be based on comprehensive data collection prior to the inventory process. 

In addition, if a company operates wastewater treatment facilities or incineration systems, it must also prepare relevant data to calculate direct emissions of methane (CH₄) and nitrous oxide (N₂O). The required data for preparation include: 

For wastewater treatment and incineration emissions, data such as the number of personnel operating treatment facilities (labor-hour records), wastewater volume, pumping records, and facility operation and maintenance logs must be prepared. In addition to emissions from fuel combustion, refrigerant leakage, process gases, and wastewater treatment, organizations must also account for emissions from fire suppression systems, particularly for facilities using CO₂ fire extinguishers and HFC suppression systems. The type, capacity, inspection records, and usage status of fire extinguishers must be verified, and relevant management manuals and inspection documentation should also be retained. 

This section follows the classification framework of the GHG Protocol (international standard for greenhouse gas inventories) to explain the activity data requirements and document preparation for Scope 1, Scope 2, and Scope 3 (including 15 categories). This is intended to assist enterprises in completing all necessary preparatory work prior to the inventory process (refer to the table: Activity Data and Supporting Documentation Checklist). 

1.Scope 1 – Direct Emissions Data Preparation

Scope 1 covers greenhouse gas emissions that are directly generated by the organization, including emissions from fixed fuel combustion, mobile fuel use by vehicles, process emissions, and refrigerant leakage. The required data and supporting documentation to be prepared include the following:

• Fixed fuel combustion: Types of fuel used and fuel consumption (in kilograms or cubic meters), along with retained purchase invoices, refueling records, or fuel contracts.

• Mobile fuel combustion: Refueling receipts for vehicles or machinery, driving logs, and monthly fuel card statements.

• Process emissions: Purchase invoices and operational records for special gases or chemical agents used in production processes.

• Refrigerant leakage: Equipment nameplate photos of refrigeration and air-conditioning systems, records of refrigerant types and charging quantities, and maintenance and repair logs for refrigerants.

• Incineration and wastewater treatment emissions: Number of service personnel (labor-hour records), wastewater volume, pumping records, and facility operation and maintenance records.

• Fire suppression system leakage: For equipment such as HFC and CO₂ fire suppression systems, it is necessary to verify the extinguisher type, capacity, inspection records, and usage status, and to properly retain fire suppression system management manuals and inspection documents.

These data serve as the basis for calculating direct greenhouse gas emissions and ensure the completeness and traceability of emission estimates.

2.Scope 2 – Indirect Energy Emissions Data Preparation

Scope 2 mainly refers to emissions generated from the purchase of electricity, steam, hot water, or chilled water. The required activity data and supporting documentation include the following:

• Purchased electricity: Electricity consumption (kWh), electricity bill records, contractual documents, and data from the Energy Management System (EMS).

• Purchased steam, hot water, and chilled water: Purchase records and supplier invoices.

• This category of data is not only related to the organization’s energy-use efficiency but also directly affects the main emission structure reflected in the greenhouse gas inventory results.

3.Scope 3 – Value Chain–Related Emissions Data Preparation 

Scope 3 covers other indirect emissions generated across the upstream and downstream value chain of the organization and is divided into 15 categories. The required data and data collection strategies vary by category, as outlined below: 

• Category 1: Purchased Goods and Services – Procurement lists, supplier invoices, and product specifications.

• Category 2: Capital Goods – Capital expenditures (e.g., equipment and construction), purchase invoices, and contracts.

• Category 3: Fuel- and Energy-Related Activities (Not Included in Scope 1 or 2) – Upstream fuel procurement data and supplier carbon emission data related to transportation.

• Category 4: Upstream Transportation and Distribution – Third-party logistics contracts and freight invoices.

• Category 5: Waste Generated in Operations – Waste disposal manifests and government waste reporting records.

• Category 6: Employee Commuting – Transportation surveys and employee questionnaire results.

• Category 7: Business Travel – Travel expense records and transportation tickets (air, rail, accommodation).

• Category 8: Upstream Leased Assets – Lease contracts and related energy billing records.

• Category 9: Downstream Transportation and Distribution – Delivery company shipping documents and carbon emission reports.

• Category 10: Processing of Sold Products – Customer processing activity survey data.

• Category 11: Use of Sold Products – Carbon emission data during the use phase of products and product manuals.

• Category 12: End-of-Life Treatment of Sold Products – Material composition analysis and waste treatment information.

• Category 13: Downstream Leased Assets – Energy consumption billing records and lease contracts.

• Category 14: Franchises – Energy consumption and carbon emission data of franchise operating units.

• Category 15: Investments – Greenhouse gas emission reports or sustainability disclosure information of investee companies.

As Scope 3 involves data from external suppliers, business partners, or customers, it is recommended that enterprises establish data collection questionnaires in advance before the annual inventory process in order to facilitate systematic and comprehensive data gathering.

4.Key Considerations for Data Collection 

When conducting data collection, special attention should be paid to the following key points:

• Completeness of Supporting Documents:
  All invoices, contracts, monthly statements, and record sheets should be fully retained as the basis for carbon inventory calculation and third-party verification.

• Consistency of Units and Quantification Standards:
  Activity data such as fuel consumption, electricity usage, distance, and weight must be reported using standardized units (e.g., liters, kWh, kilometers, kilograms) to avoid calculation errors in the inventory.

• Proper Arrangement of Data Collection Frequency:
  It is recommended to determine appropriate collection frequencies based on the nature of the activity, such as monthly collection (e.g., electricity consumption, fuel refueling), quarterly collection (e.g., business travel, logistics distribution), or annual collection (e.g., capital expenditures, investment data).

• Establishment of Standardized Procedures:
  Fixed data collection workflows, responsible departments, and timelines should be clearly defined to ensure that the annual inventory process proceeds smoothly and systematically.

Greenhouse gas inventory is not a one-time task, but rather a critical foundation for continuous management.
By systematically preparing activity data and supporting documents prior to the inventory process, enterprises can not only improve inventory quality and efficiency, but also establish a solid foundation for future carbon reduction strategies, climate risk disclosure, and carbon trading management.
Only by placing strong emphasis on data preparation can enterprises remain resilient and proactive in the face of increasingly stringent climate governance challenges.

Product (Carbon Footprint) Carbon Inventory Process and Key Steps 

1. Initiation Phase

(1) Goal Setting:
Define the objectives and purposes of conducting the carbon footprint assessment, such as reducing product carbon emissions and enhancing the environmental image of the product.

(2) Product Selection:
Select the specific product(s) to be assessed. Typically, these are the most representative or influential products within the organization.

(3) Supplier Engagement:
Invite product suppliers to participate in the carbon footprint calculation process and jointly provide relevant data and information.

2. Carbon Footprint Calculation

(1) Establish the Manufacturing Process Flowchart:
Develop a process flow diagram of the product to clearly illustrate the entire production process from raw material procurement to finished product manufacturing, along with the associated emission sources.

(2) Identify Emission Sources:
Identify emission sources at each stage of the product life cycle, based on product-specific rules and standards (CFP, PCR) and defined priority, and establish calculation rules and priorities for the carbon footprint assessment.

(3) Data Collection:
Collect relevant data for each life cycle stage, including energy consumption and emission quantities, to ensure data completeness and accuracy.

(4) Determine Emission Factors:
Identify the appropriate emission factors for each emission source. These factors are usually derived from industry standards or scientific research, and their sources must be verified for reliability and validity.

(5) Carbon Footprint Calculation and Analysis:
Use the collected data and emission factors to calculate the product’s carbon footprint and conduct relevant analyses to identify the main emission sources and influencing factors.

(6) Data Quality Assessment:
Evaluate the quality of the collected data to ensure its reliability and accuracy, and to prevent bias in the calculation results.

3. Communication and Verification

(1) Preparation of the Inventory Report:
Based on the calculation results, prepare the carbon footprint inventory report and present the calculation outcomes of carbon emissions in a clear and easily understandable manner.

(2) Explanation of the Inventory Process and Results:
Provide a detailed explanation of the carbon footprint inventory process and calculation results, and communicate the carbon emission status and related impacts to stakeholders.

(3) Third-Party Verification (Optional):
If required, an independent third-party verification body may be invited to verify the carbon footprint calculation process and results in order to enhance the credibility and transparency of the calculated outcomes.

When Conducting a Product Carbon Footprint Assessment, the Entire Life Cycle Assessment (LCA) Must Be Considered 

A product carbon footprint assessment is an integrated evaluation tool used to assess greenhouse gas emissions generated by a single product throughout its entire life cycle. This concept is derived from the application of Life Cycle Assessment (LCA) methodology, with a specific focus on greenhouse gas emissions, particularly carbon dioxide (CO₂). The following describes the life cycle stages of a product carbon footprint assessment: 

1. Raw Material Extraction

At the initial stage of the life cycle, the process of extracting raw materials from the natural environment must be considered. This may include the extraction of minerals, crude oil, timber, and other resources. Greenhouse gas emissions may already occur before these resources enter the production chain, such as emissions from energy consumption and transportation.

2. Manufacturing and Production

During the manufacturing stage, raw materials are converted into final products, which usually requires the consumption of energy and other resources. Greenhouse gas emissions generated in this stage mainly come from industrial manufacturing processes, including electricity consumption, chemical production, and equipment operation.

3. Product Transportation and Distribution

Emissions generated during product transportation are an important component of the product carbon footprint. This includes the transportation of raw materials to manufacturing sites, the distribution and sales processes of products, and the final delivery of products to consumers.

4. Use Phase

Greenhouse gas emissions generated during the use phase depend on the type and purpose of the product. For example, the use of household appliances may lead to electricity consumption, while the use of automobiles may result in fuel combustion emissions.

5. Disposal and Recycling

After the product’s useful life ends, its disposal method must be considered. This may include landfill disposal, incineration, or recycling. Different disposal methods have different impacts on greenhouse gas emissions. For example, incineration may generate carbon dioxide emissions.

Through a comprehensive evaluation of the entire product life cycle, product carbon footprint assessments help both enterprises and consumers understand the impact of products on climate change, thereby promoting the implementation of emission reduction and environmental protection measures. 

Mitigation Amount (Carbon Reduction Credits), Carbon Credit, and Carbon Offset 

The CDM Methodology Booklet refers to the methodology handbook of the Clean Development Mechanism (CDM), a mechanism established under the United Nations Framework Convention on Climate Change (UNFCCC). This document provides detailed technical guidance and standardized procedures for stakeholders on how to develop and implement CDM projects. The Clean Development Mechanism is one of the key instruments under the Kyoto Protocol, designed to assist developing countries in achieving greenhouse gas (GHG) emission reduction targets while simultaneously promoting technology transfer and sustainable development. The CDM methodology handbook establishes standardized calculation methods, monitoring procedures, and verification requirements to ensure that emission reductions from CDM projects can be accurately quantified and verified.

The relationship between ISO 14064-2 (Specification for GHG emission reductions and removals at the project level) and CDM lies in their shared focus on quantifying, monitoring, and reporting greenhouse gas emission reductions. ISO 14064-2 is an international standard that provides guidance on how organizations can determine, monitor, and report GHG emission reductions and removals at the project level and implement corresponding mitigation actions. This standard plays a crucial role in corporate GHG management and mitigation strategies. In contrast, the Clean Development Mechanism (CDM), as established under the Kyoto Protocol, focuses on enabling developing countries to achieve emission reduction targets that may otherwise be difficult to attain due to technological or financial constraints. Therefore, the CDM methodology handbook is essential for the accurate measurement and verification of emission reductions achieved by CDM projects.

ISO 14064-2 requires organizations to quantify and report project-level greenhouse gas emission reductions and to establish corresponding mitigation plans. During this process, organizations may participate in CDM projects, which can generate additional certified emission reductions. These emission reductions may be used to meet the mitigation objectives required under ISO 14064-2. Accordingly, the CDM methodology handbook provides standardized methodologies to assess the emission reduction performance of CDM projects, ensuring that such reductions can be accurately quantified, reported, and verified in compliance with ISO 14064-2 requirements.

By integrating the Clean Development Mechanism (CDM) methodology into the implementation of ISO 14064-2 project-based mitigation activities, organizations are able to manage and reduce greenhouse gas emissions more effectively while simultaneously promoting clean technology deployment and sustainable development. The following section further outlines the detailed procedures and workflow for integrating CDM methodologies into ISO 14064-2 project-level implementation.

Enterprises adopt ISO 14064-2 mitigation project planning in order to systematically manage and reduce their greenhouse gas emissions while enhancing corporate environmental responsibility and sustainable development performance. By integrating the CDM methodology with ISO 14064-2, enterprises can establish a standardized and credible framework for the design, implementation, monitoring, and verification of emission reduction projects.

1.Project Initiation Phase

• Define Project Objectives: Clearly define the greenhouse gas (GHG) emission reduction targets of the project, and specify the measurable objectives to be achieved through the implementation of ISO 14064-2.

• Establish the Project Team: Form the project team, identify the project leader and responsible personnel, and clearly define the roles and responsibilities of each member.

2.Preparation Phase

• Define the Scope of Emission Reduction: Clearly determine the scope of emission reduction, including all organizational business operations and activities, to ensure comprehensive coverage.

• Develop the Greenhouse Gas Management Plan: In accordance with the requirements of ISO 14064-2, establish the organization’s greenhouse gas management plan, including monitoring, reporting, and verification arrangements.

• Data Collection and Modeling: Initiate data collection activities, gather relevant activity data from all operations, and establish a greenhouse gas emission model for mitigation benefit calculation and forecasting.

3.Implementation Phase (Corrected Version)

• Formulate Mitigation Measures: Based on the greenhouse gas management plan, develop mitigation measures suitable for the organization, including energy efficiency improvements and the application of clean production technologies.

• Evaluate Mitigation Effectiveness: Assess the effectiveness of each mitigation measure, including emission reduction potential and cost-effectiveness, in order to identify the optimal mitigation solution.

• Implement Mitigation Measures: Implement the selected mitigation measures according to the evaluation results, and carry out corresponding monitoring and management to ensure effective implementation and achievement of results

4.Monitoring and Improvement Phase

• Monitoring and Reporting: Establish a monitoring system, regularly collect and monitor organizational greenhouse gas emission data, and prepare reports in accordance with ISO 14064-2 requirements.

• Verification of Mitigation Performance: Verify the mitigation performance in accordance with ISO 14064-2 requirements to ensure compliance with standard requirements and to prepare relevant reports.

• Performance Evaluation: Periodically evaluate project performance, including mitigation effectiveness and cost-effectiveness, and make appropriate adjustments and improvements based on the evaluation results.

5.Project Closure Phase

• Summary and Reporting: Summarize the outcomes and experience of the project and prepare the project completion report, covering mitigation performance, cost-effectiveness, and lessons learned.

• Knowledge Sharing and Learning: Share and disseminate the knowledge and experience gained from the project to promote continuous organizational improvement and capacity enhancement.

When enterprises implement ISO 14064-2 mitigation project plans, they must begin by clearly defining project objectives, followed by systematic preparation, implementation, monitoring, and improvement, ultimately achieving the organization’s greenhouse gas emission reduction targets while enhancing environmental responsibility and sustainability performance. Throughout the project execution process, organizations are required to comply with the requirements of ISO 14064-2 and make necessary adjustments and improvements based on actual conditions to ensure smooth implementation and successful achievement of project objectives. 

Reduction Credits (Carbon Allowances), Carbon Credits, Carbon Offset Credits 

Voluntary Emission Reduction and Carbon Offsetting 

1. Purpose of Establishing a Voluntary Emission Reduction and Carbon Offset Platform: 

• Carbon Credit Management Planning:

The platform is established to assist enterprises in planning and managing carbon credits, ensuring regulatory compliance and market competitiveness under climate policies and market conditions. 

• Achievement of Environmental Impact Assessment (EIA) Commitments:

The platform provides carbon offset acquisition plans to support developers in fulfilling EIA commitments and promoting the sustainable development of projects. 

2. Types of Voluntary Emission Reduction and Carbon Offset Projects: 

• Voluntary Emission Reduction Projects:

These include two types: removal and reduction/avoidance of emissions. Both rolling and fixed crediting periods are available to ensure the robustness and flexibility of emission reduction targets. 

• Application for Emission Reduction Credits After Project Completion:

After project registration, emission reductions are calculated based on actual monitoring results. Once verified by an accredited verification body, the applicant may submit an application for emission reduction credits to the Climate Change Administration, Ministry of Environment. 

The operational process and procedures of the voluntary emission reduction and carbon offset platform help enterprises and relevant institutions better utilize this tool to implement climate policies and emission reduction actions.

What Are “Confidence Interval” and “Data Quality Management” in Greenhouse Gas Inventories? 

Definitions of “Confidence Interval” and “Data Quality Management” 

1. Confidence Interval

A confidence interval refers to the possible range within which emission data may fall. Since emission data often involves uncertainties arising from parameters and calculation methods, it is not possible to provide a single precise value, but rather a range. A 95% confidence level is commonly used, indicating that there is a 95% probability that the actual emission value lies within this interval.

The width of the confidence interval depends on data quality and the magnitude of uncertainty. Generally, the narrower the confidence interval, the lower the data uncertainty and the higher the reliability. Conversely, a wider interval indicates greater data uncertainty.

2. Data Quality Management

Data quality management refers to a series of measures and procedures implemented to ensure that emission data meet specific quality standards and requirements. This typically includes:

• Establishing data quality objectives and requirements

• Identifying factors that affect data quality

• Selecting appropriate data collection, calculation, and reporting methods

• Implementing quality control and quality assurance procedures

• Conducting regular reviews and evaluations of data quality

Effective data quality management enhances the accuracy, completeness, consistency, comparability, and transparency of emission data, thereby reducing uncertainty and narrowing the confidence interval. This is critical for preparing reliable greenhouse gas inventories and for tracking emission reduction performance.

The confidence interval reflects the level of reliability of the data, while data quality management is a key means of ensuring data quality. The two complement each other and are both indispensable in greenhouse gas inventory work.

3.Examples of “Confidence Interval” and “Data Quality Management”

The following examples illustrate the relationship between confidence intervals and data uncertainty:

• Example 1: Measuring the annual electricity consumption of a building

If high-precision smart meters are used for continuous monitoring and recording, the confidence interval may be within ±1%.
If the estimation is based only on monthly electricity bills, the confidence interval may be ±10% or even higher.

• Example 2: Estimating a factory’s annual carbon dioxide emissions

If the factory has installed continuous monitoring systems and maintains accurate records for fossil fuel use and production data, the confidence interval may be around ±5%.
If the estimation is based only on rough annual fuel purchase volumes and approximate production output, the confidence interval may exceed ±20%.

• Example 3: Compiling a city’s annual greenhouse gas emissions inventory

If there is a complete set of activity data and locally measured emission factors, the confidence interval may be around ±15%.
If the estimation mainly relies on rough assumptions or lacks local parameters, the confidence interval may reach ±30% or more.

When the activity data, emission factors, and other parameters used are more accurate, and when data collection methods are more rigorous, the confidence interval becomes narrower and uncertainty decreases. Conversely, when data and methods contain deficiencies and rely on coarse estimation, the confidence interval widens and uncertainty increases. Throughout the inventory process, effective data quality control measures should be implemented to enhance the overall reliability of the final results.

What is the relationship between the GHG Inventory (Greenhouse Gas Protocol / GHG Protocol Standard) and the Science Based Targets initiative (SBTi) requirements?

The Relationship Between Carbon Inventory (GHG Protocol Standard) and Science Based Targets initiative (SBTi)

Carbon inventory (GHG Protocol) and Science Based Targets initiative (SBTi) are closely related. Their main differences and connections are as follows:

1. Scope 3 (Value Chain) as the Core Accounting Standard

The GHG Protocol is a standardized framework and methodology for quantifying and reporting organizational greenhouse gas (GHG) emissions. It provides a unified approach for calculating and reporting:

• Scope 1: Direct emissions

• Scope 2: Indirect energy emissions (e.g., purchased electricity)

• Scope 3: Other indirect emissions across the value chain
  
  

2. SBTi Is a Non-Profit Organization

SBTi is a collaborative initiative jointly launched by CDP, the United Nations Global Compact (UNGC), the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
It provides companies with standards and validation procedures for setting science-based emission reduction targets.

3. GHG Protocol as the Accounting Basis for SBTi Targets

SBTi sets corporate emission reduction targets based on Scope 1, Scope 2, and Scope 3 emissions as defined under the GHG Protocol, and these targets are aligned with climate science recommendations, such as limiting global temperature rise to 1.5°C or well below 2°C.

4. SBTi Requires Companies to Establish a Baseline Emissions Inventory First

Before setting science-based targets, companies must first complete a greenhouse gas inventory in accordance with the GHG Protocol to clearly understand their current emission status, and then apply the SBTi criteria by integrating emission reduction potential and cost considerations in order to establish long-term science-based emission reduction targets.

5.SBTi Requires Coverage of Scope 1 to Scope 3 Emissions

SBTi requires that corporate emission reduction targets must cover Scope 1 and Scope 2 emissions, while Scope 3 emissions are strongly encouraged but not mandatory, and the GHG Protocol provides the methodological support for calculating Scope 3 emissions.

6.SBTi Follow-up Reporting Requirements

Once a company has obtained SBTi validation, it is required to annually disclose and report its emissions in accordance with the GHG Protocol standards to verify whether the established emission reduction targets have been achieved.

Overall, the GHG Protocol provides companies with standardized methods for greenhouse gas accounting, while SBTi offers guidance for setting long-term, science-based emission reduction targets. Together, these two frameworks complement each other and help companies develop and implement more effective climate action strategies. 

Methodological Development of the GHG Protocol and Science-Based Targets (SBTi) 

1. Development of the GHG Protocol Methodology

The GHG Protocol was jointly launched in 1998 by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). After years of revisions and expansion, it has become the world’s most widely recognized standard for corporate greenhouse gas accounting. It provides accounting guidance for greenhouse gas emissions at multiple levels, including organizations, cities, products, and supply chains.

2. Relationship Between SBTi and the Paris Agreement

The target-setting framework of SBTi is based on the long-term climate goals established in the Paris Agreement, which aim to limit the rise in global average temperature to within 2°C, while striving to control it to 1.5°C. Therefore, by setting emission reduction targets through SBTi, companies are effectively contributing to the achievement of the Paris Agreement’s objectives.

3. SBTi Certification Process

Companies must submit their emission reduction targets and related technical documents to SBTi in accordance with SBTi standards and guidance. SBTi will then commission an independent third-party organization to evaluate the scientific validity, feasibility, and implementation pathways of the proposed targets. Once the targets pass the assessment, the company is officially granted SBTi certification.

4. SBTi Compliance Tracking

After obtaining SBTi certification, companies are required to disclose their greenhouse gas emissions annually in accordance with the standards of the GHG Protocol. SBTi continuously tracks the company’s actual progress in emission reductions. If a company fails to achieve its targets as planned, it may be required to re-submit and revise its emission reduction targets.

5. Development Trends of SBTi

To date, more than 2,000 companies worldwide have passed SBTi certification. In the future, SBTi is expected to further expand its scope of application to cover more industries and organizational types, while also strengthening requirements related to Scope 3 emissions from supply chains.

Both the GHG Protocol and SBTi provide standardized tools and frameworks for companies to quantify and manage greenhouse gas emissions. These frameworks play a critical role in supporting corporate contributions to climate targets and in addressing the risks and challenges brought about by climate change.

Why Is the GHG Protocol Important to the Scientific Framework of SBTi? 

1. Importance of Scope 3 Emissions

Although SBTi currently treats Scope 3 emissions (supply chain and other indirect emissions) as a recommended rather than mandatory requirement, Scope 3 emissions often account for a large proportion of a company’s total emissions. Therefore, incorporating Scope 3 into emission reduction targets is crucial for achieving long-term, science-based decarbonization goals. The GHG Protocol provides standardized quantification methods for 15 categories of Scope 3 emissions, helping companies identify and manage emissions across different domains.

2. Base Year Setting

When setting emission reduction targets, companies must select a base year to compare future emissions and evaluate reduction progress. Typically, a year with early and reliable data is chosen as the base year. The GHG Protocol provides specific guidelines on how to select the base year and how to adjust emission data over time to ensure consistency.

3. Internal Carbon Pricing

To incentivize corporate energy conservation and emission reduction, some companies implement internal carbon pricing or internal carbon trading mechanisms. By incorporating carbon emission costs into operational and production decisions, companies can more effectively drive energy-saving actions across departments. The GHG Protocol offers dedicated guidance on how companies can establish internal carbon pricing mechanisms.

4. Disclosure and Third-Party Verification

To enhance data transparency and credibility, companies should disclose their greenhouse gas inventories and related information annually in accordance with GHG Protocol standards, and commission independent third parties to conduct verification in order to ensure the accuracy and reliability of the data.

5. National and Regional Greenhouse Gas Accounting Methodologies

In addition to the GHG Protocol, some countries and regions have established localized greenhouse gas accounting standards and reporting guidelines, such as the U.S. greenhouse gas accounting system and China’s regional standards. Companies must pay attention to and comply with the accounting and reporting requirements of the jurisdictions in which they operate.

6. Emerging Issues in GHG Accounting and Target Setting

As climate change issues continue to evolve, both the GHG Protocol and SBTi are being continuously revised and updated to address emerging emission reduction challenges, such as incorporating emissions from land use and biological resources, and responding to net-zero emission targets.

In summary, the GHG Protocol and SBTi together provide a complete roadmap and essential tools for companies to formulate and implement science-based emission reduction targets, thereby enhancing corporate climate governance and supporting the achievement of sustainable development.

The Greenhouse Gas Protocol (GHG Protocol) and the Science Based Targets initiative (SBTi) are closely interrelated and mutually reinforcing frameworks: 

• The GHG Protocol provides a unified standard and methodology for corporate greenhouse gas inventory and reporting, covering Scope 1, Scope 2, and Scope 3 emissions. It establishes the fundamental basis for companies to identify and quantify their carbon footprints.

• Building upon this foundation, SBTi provides guidance and validation procedures for companies to set long-term, science-based emission reduction targets aligned with the climate goals of the Paris Agreement. Companies must first complete their greenhouse gas inventory in accordance with the GHG Protocol, and then set eligible reduction targets under SBTi standards to obtain validation.
  
  

• The integration of both frameworks offers a complete implementation pathway for corporate greenhouse gas management and emission reduction:
  GHG inventory → science-based target setting → implementation of emission reduction actions → progress tracking → public disclosure of results.
  This process helps companies better respond to climate-related risks and advance toward sustainable development.
  
  

• Looking ahead, as climate governance continues to deepen, both standards will be continuously updated and refined to better guide and promote corporate decarbonization practices, enabling a stronger response to the increasingly severe challenges of global climate change.