Preparing for Emissions Reporting Demands
In September 27, 2024, California Governor Gavin Newsom signed Senate Bill 219 (SB 219) into law, making important changes to California’s historic Climate Corporate Data Accountability Act (SB 253) and the Climate‐Related Financial Risk Act (SB 261) enacted last year as part of California’s Climate Accountability Package. SB 253 and SB 261 impose unprecedented climate-related disclosure requirements on US public and private companies that do business in California and meet certain annual revenue thresholds. SB 219 amends the climate bills by granting the implementing authority – the California Air Resources Board (CARB) – time and discretion to adopt implementing regulations and clarify answers to key implementation questions.
Under the final legislation, US-based entities with $1 billion or more in annual revenue that do business in California must file annual reports covering their prior fiscal year disclosing Scope 1 and Scope 2 greenhouse gas (GHG) emissions starting in 2026 and Scope 3 GHG emissions starting in 2027. Also, US-based entities with $500 million or more in annual revenue that do business in California must disclose climate-related financial risks by January 1, 2026 covering the 2025 reporting period.
Unfortunately, adopted legislation allows CARB until July 1, 2025 to adopt final reporting requirements while not extending the first reporting requirements of January 1, 2025.
Reporting requirements lead to emission reduction schemas such as tax on carbon or regulatory demands/penalties that include emission reduction standards.
Reporting is not limited to the confines of California. Rather, a company meeting the thresholds must report company-wide emissions and risks. This same global approach is seen in the upcoming EU Corporate Sustainability Due Diligence Directive (CS3D).
By including Scope 3 emissions, as ill-defined as they might be, these new reporting requirements are effectively encompassing all companies in a supply chain. Whereas Scope 1 emissions are directly generated by the reporting company, Scope 3 emissions are generated by those doing business with the reporting company. This means that regulated parties will be forced to collect emissions data from carriers contracted to move goods and fuels used by those carriers, as one example.
The Transportation Energy Institute has worked with fuel providers and fleet operators to design a program which calculates metric tons of GHG via fuels and transportation. The B2B Carbon Avoidance Tracker program provides insights and allows for emission reduction planning, should a fuel marketer or fleet operator be asked for this information (regulated company’s Scope 3 emissions). Supported by the Argonne National Laboratory’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, the Carbon Avoidance Tracker can report percent reductions and metric tons of CO2e avoided due to low carbon fuel options used.
For more information on the Transportation Energy Institute’s Carbon Avoidance Tracker, contact Jeff Hove at jhove@transportationenergy.org.
Carbon Avoidance Tracker Solutions to B2B Carbon Reporting
Carbon Reporting Continues to be Important.
From Amazon to Zoe’s Coffee Shop, businesses you work with are looking for suppliers and service providers that share their concerns on climate and environmental impacts. Big and small, all realize that they have choices on how they manage their businesses and who they choose to partner with on supply, distribution, and everything in between.
Some companies have moved away from requiring full Environmental, Social, and Governance (ESG) reporting from fuel suppliers and fleet service providers, however an increasing number have created new greenhouse gas emission (Scope 1 and Scope 2) reporting demands in their place. In fact, large organizations have begun to assess their total emissions (including Scope 3) throughout their supply chains, including third party freight hauling.
Whether they are a multi-national company improving their supply chain emissions, in anticipation of federal and global required reporting, or a small company voluntarily making the decision to be better stewards of the planet, the impact is the same. And the ripple effect is becoming immense throughout supply chains.
New Business Opportunities Mean Getting on the Bandwagon
As you seek out new business opportunities, many large companies will include a request for your fleet emissions and the carbon intensity of the fuel being purchased, should you be selected as a partner. After all, moving goods and people across the country is a carbon intense business and accounts for the majority of greenhouse gas emissions today. Increasingly, emissions reporting is becoming a pre-requisite for doing business and even a requirement to maintain existing or preferred status.
Fuel suppliers and fleet operators have an opportunity to bring valuable knowledge to their clients as they set emission reduction goals.
Fleet operators and fuel providers have resources to reduce emissions and many have been implementing these solutions over the past decade. From low carbon biofuels to last-mile electric fleet operations and logistics improvements, we can make the significant emission improvements that customers are looking for.
Carbon emissions are slowly becoming a new dynamic in pricing fuels and freight costs and, in many cases, are at the same level of importance as the price of the fuel itself. As unusual as this sounds, we are now witnessing end-users willing to pay a premium for low carbon fuels and lower carbon freight prices.
If you’re not part of the solution, you’re part of the problem.
In this case, the solution is often very good for business!
Implementing the solutions is not always easy and can be costly. But worth it if you know how to communicate these reductions and use this data to improve your business relationships and create new business partnerships.
Tracking and reporting, along with transparent and verifiable emissions modeling, is critical due to the vast amount of historical greenwashing and misleading information. As we go down this path, it is strongly suggested that your company adopt policy and programming that can withstand heavy auditing and critiques. The past “black box” models and guesswork on carbon emissions are no longer acceptable.
The Carbon Avoidance Tracker (CAT) is Your Partner in CO2 Tracking.
To meet these immediate industry needs, the Transportation Energy Institute has created the CAT business-to-business (B2B) reporting tool. Emission calculations use the transparent and widely accepted Argonne National Laboratory’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model which is an open-sourced and verifiable model that is overseen by third party modeling experts to provide a greater assurance of accuracy. The resulting business-to-business reports are designed to be shared across inner company divisions or with customers seeking this critical data. Data results from the CAT program may be migrated into a future ESG plan and report, if necessary.
There are currently multiple ways to report fuel and transportation emissions and methods continue to evolve as global climate change groups strive for a standard practice in which industry can rely upon. The CAT program provides tailpipe, lifecycle, and biogenic emission results that calculate the metric tons of CO2e avoided, overall percent reductions of metric tons CO2e, and separates out your biogenic emissions from fuels blended with biofuels.
Fleet operators are increasingly seeing the benefits of adopting electric vehicles for certain use-cases. Given miles travelled for these vehicles, CAT will calculate tailpipe CO2e emissions avoided and if Scope 2 grid emissions are available, a lifecycle emission may also be assessed.
How CAT Works for Fuel Suppliers
Fuel suppliers are being asked to provide low carbon fuel solutions that help the customer reduce their scope 1 direct emissions. Providing solutions like higher blends of ethanol and biodiesel, renewable diesel, and renewable CNG needs to be in the fuel suppliers list of customer solutions. All of these solutions, and potentially more, can help the customer to reduce tailpipe and lifecycle GHG emissions if the fuel wholesaler or retailer can effectively communicate these benefits.
Not only does the carbon intensity of the fuel need to be available on bulk fuel purchases, but also at the publicly available dispensers. Pressures for increasing transparency, in fuel supply contracts as well as at the pump, are creating new trackable variables that will require fleet card providers and retailers to capture this data and share with the consumer.
How CAT Works for Fleet Operators/Carriers
Private and government fleet operators should be determining their baseline emissions if not already assessed. Fuel suppliers are being asked, as partners, to assist fleet operators with bringing new low carbon solutions into fuel supply and fleet operation contracts. Shippers are under immense pressure to reduce direct and even indirect emissions through their shipping/carrier contracts.
Government fleet operators are not new to this space and have been working under federal fleet efficiency demands for several years. It will become increasingly important to have a standard set of practices for emissions tracking and modeling which can be applied and allow for the fleet operator to determine long-term emission reduction goals.
This includes providing transparent emissions modeling, supported by third parties for quality assurance purposes, which meet global and U.S. EPA guidance demands.
GREET Modeling
Reliable data calculations backed by Argonne National Labs.
Exportable Reports
URL Link, PDF, Document, and XML reporting formats.
Piecewise Data Entry
Save partial reports and return to where you left off.
Report Archives
Access reports from previous years.
Find out more about ESG Integrity and the Carbon Avoidance Tracker.
For more information on the Carbon Avoidance Tracker, contact:
Jeff Hove
Vice President
703-518-7972
jhove@transportationenergy.org
