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How can energy companies create carbon transparency?

Integrated systems that deliver both business opportunity and robust reporting capabilities are essential.

In brief
  • Building trust in the marketplace requires accurate, auditable emissions data.
  • Modernized lifecycle assessments and digital ledgers are two key tools that can make a difference.

In a lower-carbon world, companies that demonstrate a commitment to emissions reductions will be rewarded and, in fact, 82% of global organizations recently surveyed by Ernst & Young LLP (EY) have a public carbon reduction commitment. But to accomplish these goals, simply capturing and reporting emissions data won’t be enough.

Stakeholders want to be certain they can trust what companies are telling them – especially companies that are carbon-intensive, like those involved in oil and gas exploration and production, refining, chemical manufacturing and other heavy manufacturing, and power and utilities. In a recent EY survey, energy executives identified regulatory or compliance-related requirements, shareholders, and the board as the three primary stakeholders driving their carbon tracking and reporting strategy or decisions. Ultimately, building trust with those stakeholders means implementing tools and processes that can accurately track molecules along the value chain and stand up to regular audits, much like financial data.

The convergence of carbon data, operational data and production data is essential to create true understanding and make progress toward a decarbonized world.

This is mission-critical for energy companies today, both for their primary business and to explore new business models that align with reduced emissions. Promising opportunities such as carbon capture, utilization and storage (CCUS); hydrogen usage in manufacturing; and electric vehicle recharging will require more than just regulatory compliance to earn a license to operate — stakeholder trust will also be critical. That means companies won’t get credit for their emissions reduction efforts unless there is trust in the marketplace. Without verifiable data, any carbon claims could be written off as “greenwashing.” Further, for companies creating high-quality, engineering-based offsets (such as CCUS or direct-air capture), unreliable primary emissions data devalues those offsets.


Chapter 1

Generating value with real-time, granular emissions data

Lifecycle assessments can evolve from averaged, moments-in-time to operational differentiators.

Today, while some companies are more advanced, many are still using EPA emissions guidelines or industry averages and methodologies to do desktop calculations of their emissions. While those ballpark figures can be helpful, they also mean uncertainty around the true, day-to-day emissions that may change because of operational issues or other factors.

Of the global organizations we surveyed,
have committed to carbon reduction publicly

Most lifecycle assessments today are mere snapshots in time and are often modeled as fleetwide averages. This approach does not account for the specific path that a batch follows or allow for product differentiation for the same class of product.

However, the technology exists to modernize lifecycle assessments that can 1) capture real-time data that includes variations in operational emissions and 2) assign that data to specific production or batches in a way that follows those molecules over time. The true value is in the granularity; consider these examples:

  • Imagine a batch of plastic pellets manufactured at a specific plant on a specific day with real-time data from fuel-use, boiler temperature, length of manufacturing process and more. Those specific pellets will have a carbon footprint that is based on actual emissions, not an industry average. And as production varies, the carbon footprint will change, as well. But those changes will be captured at the point of production and follow that batch throughout the value chain.
  • Likewise, perhaps a utility is investing in blue hydrogen, but needs to accurately capture the emissions created from production, through storage and transportation, and finally downstream when the hydrogen is used. By connecting their operations data to infrastructure throughout the system, the utility can accurately track and verify the impact for their specific hydrogen processes for their stakeholders.

In a market where carbon credits or even circularity certificates have value, accurate data can help companies earn a higher price from customers. With trustworthy and verifiable data and systems, investments in the energy transition become more effective and efficient, and those able to prove that will have a competitive advantage.


Chapter 2

Environmental accounting backed by a digital carbon ledger

Companies can store, analyze, assign and report emissions all along the carbon value chain.

Companies face several challenges in creating a clear view of emissions, or decarbonization data. Energy executives pointed to these three challenges as presenting the most difficulty: 1) the lack of standardization globally on reporting requirements 2) access to high-quality data and 3) disconnected functions or processes, according to our survey..

Nearly 9 out of 10 companies acknowledge that lack of standardization on reporting requirements leads to difficulty in creating a clear view of emissions.

Given these hurdles, implementing the data capture infrastructure to modernize the lifecycle assessment is just one part of the solution. Just as critical is the data analysis and environmental accounting across multiple geographies and reporting landscapes, as well as the connective processes across many functions made possible by a carbon ledger.

A carbon ledger is essentially a digitally enabled tool that allows companies to store, analyze, assign and report emissions — in detail — all along the carbon value chain. When combined with data capture infrastructure and cross-functional process, it enables companies to calculate, with confidence, the actual emissions of a specific drilling rig or chemical or refined product.

The integration of relevant technologies and data is not only beneficial to the overall scope of the project but is required for everyday work management. It’s important for companies to understand that emissions monitoring, management and reporting should be part of the daily function vs. an ad hoc, siloed process.

There are many companies investing in advanced analytics but not harnessing the power of it to do simple things that make a greater impact. For field operations teams, there is immense value in knowing expected emissions outcomes and trends and using advanced logic to know when your emissions are trending in the wrong direction, deviating from plans and real time opportunity for investigation. From there, using these technologies to build toward predictive.

Keeping the humans at the center of all emissions efforts — corporate, commercial or otherwise — field operations teams are central to driving down YOY emissions. Their focus on emissions reduction and decarbonization will help drive cost reduction and operational efficiency. Purpose drives focus and attracts talent — what better purpose than to reduce emissions and drive toward sustainable energy?

These projects require a thorough understanding of the business itself and a deep dive into the individualized technical needs that companies have in terms of data and systems.

Ultimately, companies need to understand where they are today in terms of emissions data capture, where they can improve, and how they can monetize those decisions to be more competitive in a lower-carbon marketplace. Our teams marry the operational engineering, environmental engineering, business and auditing capabilities to drive toward an auditable, implementable approach that meets regulatory standards and unlocks business value.


Chapter 3

Unlocking trust and transparency

With process, people and technology, disparate systems and databases of emissions can come together.

The convergence of carbon data, operational data and production data is essential to create true understanding and impact in a decarbonized world. Increasingly, leading organizations are treating carbon-related metering similarly to financial production-related metering.


In our survey, nearly 70% of energy executives pointed to the opportunity for value creation and commercialization as one of the top two reasons why their company is prioritizing carbon tracking and reporting. Preparing for future regulations or compliance-related obligations was the second leading rationale.


“We are uniquely positioned to plan and implement these types of integrated data foundations, combining up-to-date lifecycle assessments with carbon ledgers to create systems that deliver both business opportunity and robust reporting capabilities,” said Ryan Bogner, Americas Energy Sustainability Leader.


By leveraging the power of people, process and technology, energy companies will be able to differentiate their products based on the actual carbon footprint involved in producing them. Oil from one field that has lower overall emissions will be more valuable to customers than oil from a field with a high carbon footprint. This will create competitive advantages, especially as customers seek the greenest feedstocks and products. Importantly, it will also incentivize operational decarbonization and additional tracking and verification efforts.

Our teams marry operational and environmental engineering with technology, data, business and auditing capabilities to drive toward an auditable, implementable approach that meets regulatory standards and unlocks business value.

These projects require a thorough understanding of the business itself and a deep dive into the individualized technical needs that companies have in terms of data and systems. Bringing together the right vendors, technology, process and people can create a successful commercial technical solution.


In time, rather than having disparate systems and databases with emissions data, companies will have “carbon hubs” where everything comes together in a standardized, easily traceable and auditable manner. This is more than a trend; it is an inevitable evolution for energy-intensive industries. Companies need to be moving forward today toward carbon transparency, develop consistent methodology and embrace a commitment to “high fidelity” data.

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