We’ve been working on marginal emissions since 2018, when we developed our first algorithm using machine learning. Realizing it is a new concept for non-experts, we wrote an explanation of what marginal emissions are in 2019, and wrote about their applicability to real-time decisions in 2022.
Collaboratively working with scientific experts and grid operators for years, we have come to realize significant shortcomings:
Scientists and grid operators warn that marginal signals fail to capture the grid's complexity.
Using marginal emissions might turn projects non-compliant in the future.
Using marginal emissions exposes companies to PR risks.
Values and fluctuations of marginal emissions are unintuitive for end-users.
On the surface, marginal emissions are simply the emissions caused by the power plant ramping up (or down) in response to a change in consumption. In reality, the electricity grid is a vast and complex interconnected system, having many interdependent components that all affect each others.
Grid operators acknowledge the marginal concept is an oversimplification of the reality they operate in. They state that the accuracy of these signals can't be assessed and verified in practice and therefore caution against their use.
Scientific experts warn about flaws of marginal emissions that prevent them from accurately estimating the impact of load shifting.
“Determining the correct [marginal] power plant is extremely complex or even impossible. [...] Furthermore, it is never possible to find out retrospectively whether the signal is correct”.
“[...] if the customer decreased their power usage, the coal generator would burn less coal. In an extremely simple scenario, this is true. The PJM system is vast and dynamic, however, with millions of values changing from one moment to the next.”
“Short-run marginal emission factors neglect impactful phenomena and are unsuitable for assessing the power sector emissions impacts of hydrogen electrolysis”.
Short-run marginal emission rates omit important impacts of electric-sector interventions
System-level impacts of voluntary carbon-free electricity procurement strategies
Estimating the marginal emissions impact of electric vehicle adoption in the WECC region in 2030
Spatio-temporal load shifting for truly clean computing
Planning for the evolution of the electric grid with a long-run marginal emission rate
Minimizing emissions from grid-based hydrogen production in the United States
50 Hertz Grid Operator
Marginal emissions have been ruled out by the GHG Protocol Scope 2 Guidance, as well as all other major regulations. Recent legislations from the US government and the European Commission prohibit the use of marginal emissions.
There is a risk for projects using marginal-based methods to be non-compliant in the future.
Scope 2 Guidance: “Companies shall not use marginal emission factors [...] for a location-based scope 2 calculation”
Corporate near-term criteria: “Avoided emissions fall under a separate accounting system from corporate inventories and do not count toward near-term science-based emission reduction targets.”
Production of renewable liquid and gaseous transport fuels: “The emission intensity of electricity shall be determined following the approach for calculating the average carbon intensity of grid electricity.”
Clean Hydrogen "45v" Tax Credit - US Department of Energy
“The level of the credit is based on the lifecycle greenhouse gas ("GHG") emissions that result from the process of producing clean hydrogen.”
Estimating and reporting the comparative emissions impact of products - GHG Protocol
"To be consistent with the requirements of the GHG Protocol corporate accounting and reporting standards, comparative impacts should not be used to adjust scope 1, 2, and 3 emissions."
Corporate Sustainability Reporting Directive - European Commission
Climate-related disclosures - International Sustainability Standards Board
Climate Corporate Data Accountability Act - California Air Resources Board
RTFO Guidance for renewable fuels of non-biological origin - UK Department of Transport
GHG Protocol
At a time when sustainability claims come under heavy scrutiny, verifiability and auditability are key. Auditing a product feature based on marginal emissions is very difficult.
Some companies have been called out by the press and by experts for their use of marginal emissions.
%20copy.jpg)
“Big Tech’s bid to rewrite the rules on net zero: [...] will allow companies to report emissions numbers that bear little relation to their real-world pollution.”
Hidden Power, Broken Rules: How companies are gaming emissions reporting rules and undermining global climate targets: “[...] pushing for new accounting rules that would allow companies to underreport their emissions by up to 90%.”
Data center emissions probably 662% higher than big tech claims. Can it keep up the ruse?: "It aims to keep Recs in the accounting process regardless of their geographic origins. In practice, this is only a slightly looser interpretation of what GHG Protocol already permits."
Financial Times
Marginal emissions cannot be used to calculate end-users' footprint as presented in a historical usage dashboard. Recommendations based on marginal emissions factors may worsen the user’s historical footprint (calculated with hourly flow-traced emissions factors).
Users receive multiple other sources of information in their lives such as alerts from their electricity provider, or records of renewable generation in the news. These often contradict the recommendations formulated based on a marginal signal. Marginal emissions factors are commonly perceived as unintuitive and confusing for users, hindering trust and reducing engagement.
Hourly and flow-traced data incorporating electricity exchanges and time fluctuations is crucial to represent the grid's physical reality. Such signals differ substantially from yearly-averaged (“average”) emissions that are called out for inaccuracy. In contrast to marginal signals, they are verifiable, backed by grid operators, and intuitive for all users.
The best signal to reduce scope 2 and scope 3 emissions
The best signal for long-term grid decarbonization
.svg)
The most intuitive signal for end-users
Please reach out to us to join the discussion.
Explore our free app to understand electricity grids and their CO2 emissions around the world.
