GHG Emissions Measurement & MRV

Emissions Covered Under the Compliance Mechanism

Under CCTS, compliance ultimately comes down to one thing: getting the emissions data right, every year, within a fixed operational boundary. Sections 3 and 4 of the CCTS compliance procedure make it clear that this is not a high-level disclosure exercise—it is a facility-level, calculation-driven regime with explicit inclusions, exclusions, and verification consequences. For a comprehensive overview of how these gases fit into India's compliance framework, read our guide to understanding CCTS basics.

Greenhouse Gases In Scope

CO₂ and PFC within gate-to-gate boundary: All greenhouse gas emissions must be converted to CO₂ equivalent (CO₂e) using IPCC Global Warming Potentials (GWPs). CO₂ has a GWP of 1; PFC emissions from aluminium smelting are converted using sector-specific GWPs (typically ~7,500 for CF₄ and CF₂).

Emissions Included & Excluded

Scope 1 (Direct) Emissions

• •Fuel combustion: CO₂ from burning fossil fuels (coal, natural gas, oil, petcoke) in on-site furnaces, boilers, kilns, and power generation equipment
• •Process emissions: CO₂ released during chemical or physical transformations (e.g., limestone → lime + CO₂ in cement; iron ore reduction in blast furnaces)
• •Fugitive emissions: Unintended releases from equipment leaks or venting (less common in compliance calculations but should be assessed)

Scope 2 (Indirect from Electricity & Heat)

Purchased Electricity: CO₂ embedded in grid electricity consumed at the facility, calculated as: Electricity consumed (kWh) × Grid emission factor (tCO₂e/kWh). The emission factor is updated annually by the grid operator and reflects the carbon intensity of electricity generation (coal, gas, renewables, nuclear).

Purchased Heat/Steam: CO₂ embedded in purchased steam or hot water from external sources, calculated similarly using facility-specific or default emission factors.

Emission Intensity Targets and Performance Assessment

Compliance is measured not in absolute tonnes, but in emissions intensity—the ratio of emissions to production. Targets are set annually over a defined trajectory period and are benchmarked at the facility level, not the company level. Errors in activity data or boundary definition translate directly into financial exposure.

Defining Emission Intensity

Product Definition and Equivalent Product

Each sector defines what counts as the product for intensity calculation. For example:

• •Cement: Tonnes of cement clinker (or finished cement)
• •Steel: Tonnes of crude steel (blast furnace route) or tonnes of liquid steel (EAF route)
• •Aluminium: Tonnes of primary aluminium produced
• •Fertiliser (Ammonia): Tonnes of ammonia produced

Equivalent Product Conversion: Facilities producing multiple products (e.g., a refinery producing gasoline, diesel, fuel oil) may need to convert to an "equivalent product" basis to ensure comparable intensity metrics. Regulators publish standardised conversion factors.

Target Setting and Benchmarking

Each facility receives a GEI target, typically set using one of two approaches: (1) Facility-specific baseline: Based on the facility's historical average performance (usually 3-year baseline) reduced by a trajectory of annual improvement percentages, or (2) Sector benchmark: Set at a percentile of sector median performance (e.g., 75th percentile), allowing higher-efficiency facilities to outperform more easily. Targets are announced at the start of each compliance year and remain fixed for that year.

What Data Must Be Collected

Accuracy begins with data collection. Facilities must establish and maintain a comprehensive monitoring plan that documents every emissions source and data stream:

Monitoring Plan Components

Source Identification: List all emission sources: boilers, furnaces, kilns, process reactions, electricity imports, steam imports, etc. Include equipment IDs, fuel types, and operating parameters.

Fuel / Material Quantity Data: Monthly or continuous records of:

• •Coal consumed (tonnes, with ash analysis for carbon content)
• •Natural gas consumed (Nm³ or tonnes)
• •Oil / petcoke consumed (tonnes)
• •Raw materials (limestone for cement, iron ore for steel, caustic soda for chlor-alkali)
• •Purchased electricity (kWh)

Calorific Values and Carbon Content: For each fuel type, documentation of (aligned with GHG Protocol standards):

• •Net calorific value (MJ/kg or similar)
• •Carbon content (% by weight or tCO₂/MJ)
• •Oxidation factor (typically 100%, meaning all carbon is oxidised; lower for waste fuels)
• •These can come from fuel supplier certificates, lab testing, or published IPCC defaults

Electricity and Heat Data: Monthly meter readings for purchased electricity (kWh) and, if applicable, heat imports (MJ or tonnes of steam). Document the source (grid, captive power, external supplier).

Production Data: Monthly or annual records of product output (tonnes) to calculate emission intensity. This may include by-products or co-products that need to be accounted for.

Emission Factors: Documentation of the emission factors used for each fuel and electricity source, including publication source (IPCC, national authority, facility-specific study) and the year of data.

Audit Your Current Data Systems

Ensure your monitoring plan meets CCTS requirements and verification standards.

Verification and Materiality

Once a facility has compiled its annual emissions calculation, it must undergo independent third-party verification before submission to regulators.

Independent Verification

Who? Accredited third-party verifiers (auditors with expertise in emissions accounting and CCTS methodologies). Verifiers must be independent from the facility and have no financial interest in the outcome.

What? Verifiers conduct a detailed review of:

• •Data collection procedures and documentation
• •Completeness of monitoring plan
• •Accuracy of calculations and emission factors used
• •Consistency with prior years and regulatory requirements
• •Identification of any non-conformances or best-practice gaps

Materiality Thresholds

What is Materiality? Materiality defines the maximum acceptable error or uncertainty in reported emissions. If an error is below the materiality threshold, it is not considered material enough to require correction. Typical thresholds are 5% of total emissions.

Verification Process and Outcomes

On-Site Audit: Verifiers typically conduct an on-site audit of the facility, reviewing records, interviewing staff, and validating data against source documents (invoices, fuel slips, meter readings, lab reports).

Verification Report: The verifier issues a report confirming:

• •Verified emissions (total tCO₂e)
• •Verified emission intensity (tCO₂e per unit product)
• •Any non-conformances or uncertainties identified
• •Overall assurance level (unqualified, qualified with exceptions, etc.)

Check Verification: If a facility's submitted data shows significant variance from the verifier's finding (e.g., facility claims 5% better performance than verifier confirms), regulators or NSC ICM may conduct a "check verification"—a second, independent audit—to resolve discrepancies.

How Climate Decode and TerraNova Support the Process

This level of specificity is where many facilities struggle. Climate Decode's TerraNova platform is designed to operationalize CCTS requirements at the facility level — from structuring emissions inventories to tracking GEI performance against notified targets.

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