Estimating CO2 from Production-Cost Data: What and Why?

Many chemical operators are already or soon will be obliged to estimate their emissions of CO2 and, in time, other greenhouse gases (GHGs). This is creating a secondary application for management accounts: the estimation of emissions. (The primary purpose for management accounts – as their name suggests – is to support managerial decisions.) In this report, we present a method for estimating carbon emissions from management accounts – namely SRI Consulting’s own PEP production cost data – and we test it on three chemical processes. Our findings are that the method is:

• Consistent with reporting/accounting guidelines proposed by the World Business Council for Sustainable Development
• Significantly easier, faster and cheaper than other methods
• The only public data-source available for many products

We conclude that the method is useful as a carbon emissions benchmark for manufacturers in the chemical industry, as well as for their verifiers and regulators. We propose to develop CO2/GHG emission estimates for the entire range of chemicals covered under PEP.