Three Ways You Can Apply Book and Claim in GHG Emissions Inventories
In the evolving landscape of greenhouse gas (GHG) emissions reporting, the concept of "book and claim" is gaining traction. This market-based approach and methodology, which decouples the physical flow of energy from its environmental attributes, enables a flexible approach to emissions accounting. It is important for companies to take a lead in transportation decarbonization to get viable measures to scale. Companies that are taking a lead today find themselves in a situation where actually reporting on the effects of their measures in corporate inventories is still in an infancy stage. Standard setters like the Greenhouse Gas Protocol and the Science Based Targets Initiative are currently defining the future landscape of reporting. But already today, we find various ways you can integrate book and claim into your GHG emissions inventories:
1. Direct Provision of Fuels
For owned, leased or tightly controlled assets like vans, trucks or planes, direct provision of fuels is straightforward. You can directly link fuel use to your carbon inventory. This method is already in practice and allows for clear reporting of low emissions fuels and their associated benefits versus their fossil counterparts. reductions from the use of sustainable fuels. For example, if you directly fuel a truck with Hydrotreated Vegetable Oil (HVO), you can directly account for this in your emissions inventory. This could be called a ‘physical separation’ chain of custody.
2. Mass Balance Approaches
Mass balance approaches are useful when dealing with fuels distributed through a common pool, such as aviation fuels from an airport fuel farm. This method allows for the allocation of emissions reductions based on the proportion of sustainable fuels used. However, it becomes challenging when trying to allocate emissions reductions disproportionately. Despite these challenges, mass balance approaches are recognized by standards like the Greenhouse Gas Protocol and ISO 14083, largely because the stakeholder is still connected physically. They come with important rigor and still require attention to detail. Consider reviewing the balancing period (time), boundaries, and possibility of physical presence.
3. Market-Based Measures
Market-based measures involve purchasing environmental attribute certificates for renewable energy or sustainable fuels. Although there is no gold standard for including these certificates in emissions inventories, it is important to start integrating them. The Greenhouse Gas Protocol's Scope 2 reporting guidance introduces the concept of location-based and market-based reporting, which can be—and is—further developed for other types of emissions. Companies can report both physical and market-based emissions almost in a “gross” and “net” emissions fashion, reporting the lower emissions values achieved through market-based measures.
Real-World Examples
Several companies have already started integrating book and claim into their emissions reporting. Here are three anonymized examples:
Example 1: A service company with comparably low emissions, but a strong focus on business travel, uses sustainable aviation fuel (SAF) certificates to reduce their reported air travel emissions. They report both the physical (gross) emissions and the reductions achieved through the purchase of SAF certificates. The company reported 307,044 tonnes of CO₂ equivalent tank-to-wake emissions from air travel last year. (Figure 1) They expanded this to a full life-cycle emissions figure of 370,643 tonnes by including well-to-tank emissions in their sustainability report and then achieved a reduction of 5,358 tonnes through the purchase of SAF certificates, resulting in 365,000 tonnes of remaining emissions. (Figure 2).
Figure 1
Figure 2
Example 2: Another company reports their GHG inventory in two separate tables: Table 1A presents physical (gross) emissions across all categories, while Table 1B (management criteria) shows adjusted emissions that incorporate reductions from sustainable fuels. This dual-table approach provides transparency and allows clear differentiation between standard reporting and market-based interventions. In Table 1B, the lower emission values achieved via market-based measures are specifically applied to Category 4 (upstream transportation and distribution) and Category 6 (business travel), reflecting the impact of their long-term SAF contracts, which are also detailed in the narrative section of their report. (Figure 3).
Figure 3
Example 3: A third company integrates physical (gross) and total emissions after including the lower emission profiles procured through a market-based approach into a single table. This approach simplifies reporting and highlights the impact of sustainable practices. Within the table (Figure 4), they include a specific line item labeled "reduction through market-based measures," showing the difference between the lower emissions achieved and the reference case (ie, fossil) as negative values. For Scope 3, for example, they report logistics-related emissions by summing Categories 3, 4, and 6 without market-based measures, then note the difference between their physical and market-based scenarios as “reductions”. Notably, the company presents the net emissions figure—33 million tonnes in this case—as the primary headline number, supported by a brief narrative elsewhere in their report. (Figure 5).
Figure 4
Figure 5
Conclusion
Despite the lack of formal acknowledgment by some standards, integrating book and claim into GHG emissions inventories is already possible today and practiced by several companies.
While we highlight the above inventory methods, we have not reviewed these organizations’ specific inventories or underlying methodology. We suggest that such inventories represent the sum of low emission transportation activity—together with the organization’s traditional fossil transportation—where each element is accounted for in line with standard ISO 14083 / GLEC transportation accounting methodology. Said another way, we support an inventory methodology where even the booked/claimed service or solution is appropriately and transparently integrated into the transportation activity as a sum of positive values, even if such values are lower by nature of being from a low emission activity. This approach contrasts with implementation of consequential-based accounting of booked/claimed attributes as a subtraction (ie, offset-style). For more on this, please see the blog link on the reductions below.
We are providing several resources to continue the learning and real-life application:
- The SFC Market Based Measures homepage and SFC Academy training opportunities.
- Want to “assure” your GHG inventory that includes Book and Claim / Market Based measures? See SFC’s Market Based Measures Assurance Program—SFC Market Based Measures Assurance Program
- Curious how to account for “Reductions”? Read our previous blog post—Reductionist “Reductions” Beware: LETS Improve Accounting to Bolster Book and Claim Acceptance
- Book and Claim Community—Capacity-building page
By setting a credible and transparent precedent, we can pave the way for broader acceptance and standardization for future accounting and reporting of ‘book and claim’ in transportation. We encourage you to take the lead! If you are interested, want to provide thoughts or have questions: Feel free to reach out!