Spend based emission factors
Last updated
Last updated
The GHG protocol Scope 3 Standard prescribes to apply the average industry spend-based methods when other methods are not feasible (supplier-specific activity-based , average industry activity-based or hybrid method). Based on your expenditures you can get a first view and/or benchmark on your emissions, in particularly for Scope 3, which otherwise can be a laborious task to assess. When using a spend-based approach, users should however be aware of it’s limitations (granularity, price volatility, supply-demand specificity...) and should aim to progress towards a full activity-based inventory, at least for the activities for which you want to formulate actions for. Using the same spend-based emission factor, you can only reduce your emissions by reducing you expenditures . To change emission intensity, opt for supplier-specific or activity-based methods. This is the typical approach for spend-based emission factors: begin with a spend-based method for a first complete overview as benchmark and then go more granular wherever needed. Companies may use a combination of the activity-based method and spend-based method (not all activities need the same granularity).
Spend-based emission factors are mostly based on Environmentally Extended Input-Output (EEIO) models, that have a specific approach for estimating the environmental impacts, particularly greenhouse gas emissions, associated with economic activities. Here's a more detailed breakdown:
Input-Output Analysis: This is a quantitative economic technique that describes the flow of goods and services within an economy. It shows how the output of one industry is the input of another, thus forming a complex web of economic transactions. The IO model aggregates high-level expenditures annually, regionally, and by sector. It presumes uniform pricing across industries for their specific outputs, which may differ from the actual price paid for a particular product. This discrepancy is minimized when expenses involve various parties and are distributed over time but that it's more of a consequence than a major driving factor to change your expenses.
Environmentally Extended Input-Output (EEIO) Models: These models expand upon traditional input-output analysis by integrating environmental data. This means they not only track the flow of economic goods and services but also how these flows relate to environmental impacts, such as resource use and emissions.
Spend-Based Emission Factors: In the context of EEIO models, spend-based emission factors represent the amount of emissions (like CO2, methane, etc.) associated with a specific amount of spending in a particular sector or on a specific product or service. These factors are derived by analyzing how spending in one sector leads to emissions across the entire supply chain.
For example, a spend-based emission factor for the automotive sector would not only include emissions from manufacturing cars but also the emissions from producing the steel, plastic, and other materials used in cars, as well as emissions from services like advertising and legal services that the automotive sector uses.
Exiobase is a global detailed Multi-Regional Environmentally Extended Input-Output Table model (EEIO) with spend-based emission factors for 163 industries (see below for the associated NACE acitvities) and 200 products (see below for the associated CPA products) and for 49 regions. The spend-based emission factors are derived by allocating national GHG emissions to groups of finished products based on economic flows between industry sectors. The Exiobase dataset is therefore comprehensive, but the level of granularity is relatively low.
Carbon+Alt+Delete used Exiobase 3.8.2 and this version is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
The specifications on the GHG spend-based emission factors of Exiobase 3.8.2 that are made available:
Cradle-to-gate spend-based emissions factors for 2019 in EUR were extracted from the Exiobase model for all products and industries for all regions.
All Kyoto GHGs are covered by Exiobase v3.8.2, except for the NF3. The AR6 values for the GWP are used for the implementation in our app.
The spend data should be imported with the 'basic price', the amount the producer receives exclusive of trade/transport margins or taxes. This excludes fluctuations due to trade/transport margins or taxes. To adjust your consumer price to the basis price of the producer, we suggest using the World Bank data on taxes: .
The logic for inflation and currency exchange correction:
The initial Exiobase environmental factors (EFs) are provided in units of kilograms of CO₂ per Euro (kg CO₂/EUR) for the year 2019. For instance, the 2019 EF for a product like apples produced in Belgium is 2 kg CO₂/EUR.
To make the EF relevant for local users, we first convert it into the local currency as it was valued in 2019. This is done by applying the currency exchange rate for 2019. For example, in Belgium, 1 Euro was equivalent to 40 Belgian Francs in 2019. Using this rate, the EF is converted to 0.05 kg CO₂ per Belgian Franc in 2019. (this example is for illustration only, Belgium is in the Eurozone and no longer uses the Belgian Franc)
Next, we adjust the 2019 EF in local currency for inflation to reflect price changes up to 2022. This inflation adjustment factor is derived from consumer price indices. In Belgium, the inflation rate from 2019 to 2022 is 1.5, indicating a 50% price increase over this period. After applying this factor, the "Corrected EF" for 2022 becomes 0.033 kg CO₂ per Belgian Franc.
To facilitate global comparisons, we convert the 2022 "Corrected EF" back into a standard currency, such as EUR, GBP, or USD, using the exchange rate for 2022. In Belgium, the 2022 conversion rate is 50 Belgian Francs per Euro. Applying this rate, the "Corrected EF" becomes 1.67 kg CO₂ per Euro in 2022.
Below we give an example of Chemicals n.e.c. (industry) for China in USD for 2023. Note that only the emission factor values in EUR and USD are visible in the app. The values in Chinese Yen (CNY) are not available in app:
Chemicals n.e.c. (industry)
2019
1,0000
EUR
1,9216
kgCO₂e/EUR
Currency exchange EUR to CY for 2019
2019
7,7338
CNY
0,2485
kgCO₂e/CY
Inflation in CY from 2019 to 2022
2022
8,1564
CNY
0,2356
kgCO₂e/CY
Currency exchange CY to USD for 2022
2022
1,2107
USD
1,5872
kgCO₂e/USD
Inflation in CY from 2019 to 2023
2023
8,1756
CNY
0,2350
kgCO₂e/CY
Currency exchange CY to USD for 2023
2023
1,1541
USD
1,6650
kgCO₂e/USD
The following data sources support our exchange rate and inflation adjustments:
Exchange Rate:
Inflation (via Consumer Price Index):
See in below the values we used for the corrections of 2023.
Note: We use annual average values for each Exiobase region, and sector-specific inflation rates are not applied.
Global exchange rates:
Taiwan-specific rates:
Global inflation data:
International Monetary Fund (IMF) projections:
Inquiries about specific industries or products can be directed to Exiobase through their support email address: