What is Digital MRV?
Digital MRV stands for Digital Measurement, Reporting, and Verification. This typically entails looking at how to verify carbon emissions or sinks based on measurements taken. “Measurement” has historically been a bit of a misnomer as many approaches rely on estimations and inventory methods. These are often of the form of filling out spreadsheets or online tools that provide a formulaic approach to accounting for carbon. Modern approaches include direct measurement of emissions that do not require a detailed inventory or time to collect and enter the inventory into accounting software. Reporting entails a disclosure of the data, methods, and details of the analysis. Some companies and emerging technologies utilize blockchain to provide a public ledger of the carbon data and inventory as part of the reporting so that this can be publicly viewed and validated.
Persefoni, IBM’s Environmental Intelligence Suite, and Sphera provide online question and answer based approaches that build up an inventory of carbon. These methods work well for managers who have an extensive and detailed inventory of all operations, machinery, and energy purchases. This entails knowing each individual asset, type, and emission profile. For example, the type, brand, age, and maintenance history of a refrigeration unit. This extends to all operation assets such as air conditioners, forklifts, vehicles, generators, and more. This also requires a complete usage log of all purchased power, such as electricity purchased, natural gas, and gasoline, down to the number of gallons or kilowatts in the case of electricity. Knowing the power source is essential as well, as purchased power from the grid may be from renewable or fossil fuel sources depending on the locale of the purchased electricity.
The typical project time to approach an inventory varies by location and asset type, but a rule of thumb is that this process will take 3-6 months per facility. A typical consulting agency specializing in this process will charge between $20K-30K per facility examined for this process. A “bench” inventory that is done without onsite visits can reduce this cost significantly, but will be inaccurate and prone to over reporting. The over reporting typically occurs when making broad assumptions about the onsite assets or simply using the fuels purchased without adjusting for how the fuel is consumed (efficiency).
Direct Measurement Methods
Direct measurement includes using sensors to measure actual emissions from a facility. Sensors include CEMS (Continuous Emissions Monitoring Systems) which are often built into generators and other assets, IoT sensors installed onsite, nearby ground sensors, aerial, and satellite sensors. These sensors utilize various technologies that provide a detailed measurement of different types of gases emitted, such as CO2, CH4 (Methane), and N2O (Nitrous Oxide), among others. Depending on the sensors used, these can also pinpoint sources of emissions and leakages that may not be accounted for in inventory based approaches. Sensors also provide realtime or semi-realtime (daily, weekly, monthly), that does not require updates to methodology.
Direct measurement approaches allow for quicker and cheaper data, often being able to produce reporting monthly at less than 10% of the cost of inventory methods. Measurement methods may not be fully suitable for all industries, however. For example, transportation has uncertainties around who may “own” the carbon emissions; does the transportation company or those who own the goods being transported. Also, operations that do not have a fixed location can become difficult to identify and measure. One example is companies who some employees work from home. The carbon measurement of work from home employees may require a hybrid approach that uses direct measurement in combination with inventory approaches.
EPA Emissions Factors and other Pitfalls to Carbon Reporting and Accounting
Remarkably, many businesses are using simplified and outdated reporting methods. We have encouraged a number of companies in our course of business that estimate their carbon emissions using a simplified accounting method. The method typically works like this. First, an internal inventory of fuel purchases are generated. This means the total amounts of natural gas and gasoline, for example, are collected. Then, EPA emission factors are applied. These are simplified equations and constants that are multiplied by the the total fuel type purchased. By doing this approach, it makes the process of MRV very simple and easy to calculate, but significantly over reports on the emissions. Essentially, this means that the same emissions will be calculated whether you’re burning natural gas raw outside or using a high-efficiency heater.