Greenhouse gas emissions

Reducing greenhouse gas emissions is essential to addressing climate change. The extractive industries contribute significantly to emissions, both directly from their operations and indirectly through end-use combustion of oil, gas and coal. Stakeholders can use data reported in line with EITI Requirement 3.4 to inform public debate on extractive sector emissions.

Emissions data is of strong public interest. It supports multi-stakeholder dialogue on a range of governance and transparency issues. For governments it can support the development of national climate commitments and reporting, management of economic risks and enforcement of regulatory measures. For companies and financial institutions, it can help to inform investment decisions. For civil society, it enables scrutiny of government and company commitments and emissions reduction efforts. 

Expectations for emissions reporting are evolving rapidly. Companies are increasingly subject to mandatory reporting requirements, such as those from the European Union. Emissions disclosure also features in corporate reporting standards, including from the International Sustainability Standards Board, the Global Reporting Initiative and the Carbon Disclosure Project, among others.  

Requirement 3.4 of the 2023 EITI Standard promotes transparency in this area. It encourages companies to disclose greenhouse gas emissions in alignment with existing leading disclosures standards and encourages multi-stakeholder groups (MSGs) to request disaggregated data where feasible. This guidance note emphasises leveraging company reporting for these purposes. 

The guidance provides a resource for MSGs in implementing Requirement 3.4. It should be read alongside the EITI’s policy brief, Navigating the energy transition: Data and dialogue to strengthen extractive sector governance, and other guidance relevant to understanding extractive sector emissions, such as reserves and production disclosures, available on the EITI website. 

This section provides an explanation of some of the key concepts relevant to the implementation of Requirement 3.4.

Greenhouse gas emissions refer to the release of gases such as carbon dioxide (CO₂) and methane (CH₄), among others, into the atmosphere. These gases trap heat and contribute to global warming. Human activities, including fossil fuel combustion and land use changes, are the main cause of the increase in greenhouse gases in the atmosphere in the last 150 years.

The Greenhouse Gas Protocol (GHG Protocol) is a globally recognised standard for measuring and managing greenhouse gas emissions from entities in both the private and public sectors. It categorises emissions by scope (see below) and provides guidelines to ensure consistency in emissions accounting and reporting.

Greenhouse gas emissions from entities such as companies are categorised based on their source and the entity’s control over them:

• Scope 1: Direct emissions from sources owned or controlled by the entity, such as emissions from fossil fuel combustion in boilers, furnaces, vehicles and industrial processes.
• Scope 2: Indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the entity.
• Scope 3: All other indirect emissions that occur in an entity’s value chain, including upstream and downstream emissions from purchased goods and services and the use of sold products by end-users.

The Paris Agreement is a legally binding international treaty adopted in 2015 to combat climate change. It has been signed by 194 states and the European Union, including all EITI implementing countries. The Paris Agreement aims to limit global temperature increases to well below 2°C above pre-industrial levels, with efforts to keep the increase below 1.5°C, by reducing greenhouse gas emissions. Countries must submit nationally determined contributions (NDCs), which describe plans and targets for reducing emissions and adapting to climate change impacts. Countries are required to regularly report emissions through National Inventory Reports. 

The MSG should begin by collectively reviewing the text of Requirement 3.4 to align on its objectives and approach. It should consider the relevance of emissions disclosures to the national context and MSG priorities. 

To achieve this, the MSG may wish to:

• Identify potential uses for emissions data. To inform the discussion of objectives, the MSG may wish to discuss potential uses for emissions data and determine how these align with stakeholder priorities. Potential data uses are listed in the box below.

• Discuss the level of disaggregation. Based on the identification of potential data uses, the MSG may consider what level of disaggregation best supports its objectives. This discussion should take into consideration the feasibility of companies disclosing data at the desired level of disaggregation. MSGs may want to consider a phased approach that is informed by feasibility considerations and aligned with leading disclosure standards. Options include:
  • Global: companies may aggregate their emissions data into global totals.
  • National: companies may disclose total emissions per country of operations.
  • Project: companies may disclose emissions per project.
• Identify relevant stakeholders. The MSG may need to engage additional stakeholders to advance the remaining steps of this guidance. This could include company departments or government agencies not usually involved in the EITI process, including regulatory agencies tasked with monitoring extractive sector emissions. The MSG could also consider engaging potential data users early on. This could include government agencies handling UNFCCC submissions, regulators enforcing carbon pricing mechanisms or other applicable regulations, downstream actors and industry initiatives, and organisations specialising in local environmental data dissemination.
• Discuss capacity needs. The MSG should discuss whether there are any capacity gaps that could inhibit the implementation of Requirement 3.4. This should include consideration of the feasibility of reporting companies collecting and disclosing emissions data and whether government, companies and civil society have the capacity to interpret the data in a manner that can support accountability. Companies on the MSG that have more established processes for compiling and disclosing emissions data can guide and support the MSG with this step. The MSG is also encouraged to engage with the EITI International Secretariat and external partners to explore how to address capacity gaps.

The MSG should assess the current status of emissions reporting within the country’s extractive sector. It may consider engaging with reporting companies to request information on their current approaches to compiling and reporting emissions data. 

To guide this, the MSG can consider the following questions:

• Are emissions disclosures mandated by national laws and regulations? Many governments require companies to disclose emissions. Such mandates can support the EITI’s goal of promoting systematic disclosures at source and help to ensure stakeholders have accessible and current information.  
• What data are companies compiling? While most major publicly listed companies compile and disclose emissions data, state-owned and smaller or privately held companies often have less established practices. The MSG may want to build an understanding of what, if any, emissions data companies currently compile, including which greenhouse gases and emission scopes they cover.
• What methods do companies use to compile and verify data? There are multiple recognised emissions accounting methodologies. Among other aspects, the MSG may want to build an understanding of whether emissions are measured or based on projections and whether data is subject to any internal or third-party verification.
• Which standards are companies aligning with? An overview of leading disclosure standards is provided in Annexe A.
• Where do companies disclose data? Companies typically disclose emissions data through corporate sustainability reports or dedicated climate change reports. Companies may also submit data to regulatory authorities to comply with national or regional requirements.
• What is the level of disaggregation of existing disclosures? While many companies report emissions at the corporate level, some provide data disaggregated by country or project. 

While compiling emissions data is the responsibility of companies, the MSG may consider taking the following steps to advance data collection:

• Prioritise companies for engagement: The MSG may want to prioritise engagement with companies whose disclosures have the greatest relevance to meeting the objectives agreed in Step 1. Engaging companies with significant emissions could help to ensure the relevance of reporting. The MSG could also gauge the interest and capacity of companies to report. As seen in Trinidad and Tobago’s pilot (see above), it may be possible to start with a few committed companies and expand reporting over time.
• Encourage alignment with leading standards: Where applicable, company reporting should align with existing regulatory requirements. In countries where there are no regulatory requirements, the MSG could encourage companies to compile emissions data in alignment with leading international standards (see Annexe A). The MSG could also encourage companies to compile disaggregated data, where feasible. The MSG may consider convening a discussion with reporting companies to identify and resolve any methodological challenges.

Facilitate data collection: The MSG could provide a standard questionnaire or reporting template to companies (see Nigeria case study below). In countries with existing regulatory reporting requirements, the EITI could engage with relevant government agencies rather than companies to collect data. 

To ensure effective disclosures, the MSG is encouraged to:

• Focus on existing company reporting. Companies are encouraged to disclose data through public sustainability reports and online disclosures so that EITI reporting does not pose an additional burden. Companies are encouraged to include disaggregated data in their reporting where feasible (see South32 case study below).
• Disclose data through government platforms. In countries where governments maintain online environmental information platforms, these could be used to consolidate and disclose emissions data from companies.
• Consolidate and summarise data in EITI reporting. EITI reporting could summarise key company data, including:  
  • Scope 1 and 2 emissions (including disaggregated data, where feasible).
  • Methodologies for calculating emissions, including whether disclosures align with specific regulatory requirements or international standards.
  • Information on whether data has undergone third party verification
  • Links to further company disclosures (e.g. websites, sustainability reports, regulatory filings)

Where there is interest and capacity from companies and stakeholder demand, additional disclosures to encourage might include emissions by source, emissions intensity, emissions reduction targets and approaches, and Scope 3 emissions where available and appropriate (noting that these are more difficult to measure and corporate reporting is generally less established for this scope).

The MSG should review the comprehensiveness and quality of company disclosures and consider:

• Are there any gaps in disclosures?
• Are disclosures aligned with regulatory requirements and leading standards (see Annexe A)?
• Have disclosures been subject to any verification processes?
• What is the level of disaggregation in disclosures?
• How does the data compare to other information sources (see Further resources section below)?

The MSG should also consider how the data supports the objectives set out in Step 1. Key questions might include:

• What are the linkages between the extractive sector and national climate goals?
• What are the implications of emissions for competitiveness in the extractive sector? What are the potential impacts of this for public finances, businesses, workers and communities?
• What government processes can the data support (e.g., enforcement of carbon pricing mechanisms, NDCs, National Inventory Reports)? 

The MSG may want to engage partners or technical experts to facilitate data analysis and discussions on the findings. 

Based on the findings from Step 5, the MSG can identify ways to inform public dialogue on emissions in the extractive sector. This may involve engaging climate stakeholders beyond the MSG. 

Where applicable, the MSG should align with national Action for Climate Empowerment (ACE) measures under the UNFCCC and the Paris Agreement, which aim to involve citizens in climate action through education, awareness, participation, information access and international cooperation.

Measures could include:

• Disseminating information: In line with Requirement 7.1, the MSG should ensure that disclosures are understandable, comparable, widely promoted, publicly accessible and contribute to public debate. This may involve:
  • Simplifying and summarising information (e.g. factsheets and infographics).
  • Using a range of communication channels (e.g. social media, TV, radio, newspapers).
  • Addressing linguistic or cultural barriers (e.g. translating information into local languages).
• Facilitating public debate: The MSG may want to engage stakeholders not usually involved in the EITI process (e.g. government agencies, parliamentarians, civil society organisations, journalists, communities) through bilateral meetings, workshops or conferences. 

Targets for engagement could include:

• Government agencies leading UNFCCC engagement to ensure data informs NDC updates and national emissions reporting.
  • Regulators to ensure data supports enforcement of carbon pricing mechanisms and emissions standards, where applicable.
  • Oil and gas regulators and national oil companies to inform methane abatement discussions.
  • International development actors involved in climate finance.
  • Downstream actors and industry initiatives seeking data on their supply chains.
• Building stakeholder capacity: The MSG may want to partner with technical assistance providers to strengthen the capacity of relevant stakeholders to analyse emissions data and meaningfully engage in discussions that advance greater accountability.

Leveraging EITI requirements on reserves and production 

Beyond Requirement 3.4, the 2023 EITI Standard can enhance understanding of the extractive sector’s greenhouse gas emissions through reserves and production disclosures. Implementing countries and companies are encouraged to disclose data on proven economic oil, gas or mineral reserves, where available (Requirement 3.1). This enables analysis of the volume of fossil fuels that could be extracted in the future. Combined with project-level production data (Requirement 3.2), this information can support the estimation of greenhouse gas emissions from fossil fuel combustion by end-users (such as through the Global Registry of Fossil Fuels) and can inform discussions about aligning ongoing or planned extraction activities with emissions reduction goals. Project-level production data can also help to calculate the emissions intensity of production at different projects.

The schema below illustrates potential use cases for emissions data in EITI countries. Use cases are categorised by their national or international scope (vertical axis) and their alignment with market mechanisms or regulatory requirements (horizontal axis). Each dot represents an individual use case.

For example, “Informing NDC revision” (bottom right) is placed in the international regulatory space, reflecting its role in helping governments fulfil Paris Agreement obligations to revise their NDCs. “Emissions from transition minerals” is positioned near international markets as data can allow mining companies to respond to the demand from investors and consumers for low-carbon intensity production.

Numbers after each use case indicate the potential relevance across EITI countries at the time of writing. For instance, while all EITI countries revise their NDCs, 16 are key producers of transition minerals. Lines between dots suggest overlap across different quadrants. For example, “Methane abatement (21)” data could influence both national and international investments. The categories presented in this schema are indicative and not exhaustive.

Further details are available in the pilot presentation and a preliminary country by country analysis.

Emissions data

• Several international organisations provide emissions data at no cost. The IEA Methane Tracker publishes estimates of the volume of energy industry methane emissions, classified by type, country and fossil fuel, together with an assessment of the economics of capturing these releases. Other resources include UNEP’s International Methane Emissions Observatory and Methane Alert and Response System and the World Bank’s Global Gas Flaring Tracker.
• Non-profit organisations are increasingly playing a role in making emissions data publicly available. The Global Registry of Fossil Fuels is an open-source database of volumes of fossil fuels and their estimated emissions at country and asset level across all greenhouse gas scopes maintained by Carbontracker. Other resources include RMI’s Oil Climate Index Plus Gas, Climate Trace and the Environmental Defense Fund’s MethaneSAT.
• Private-sector data providers, such as Rystad Energy and Wood Mackenzie, provide proprietary emissions databases, allowing paid users to analyse and benchmark emissions performance at project, company or portfolio level. Remote-sensing firms, such as Kayrros SAS or GHGSat, have developed satellite technologies that companies can use to obtain an independent measure of their emissions. Kayrros makes some of its data available online at no cost.

Other resources

• IPCC Chapter 2 (state of climate change): Provides the basis of emissions factors, which are used by default in most fossil fuel emissions reporting.
• UNFCCC Nationally Determined Contributions Registry: The official repository of plans submitted by national governments to the Paris Agreement process, detailing their estimate of emissions and plans to reduce them.
• World Bank Carbon Pricing Dashboard: A database maintained by the World Bank since 2020 of all carbon pricing measures globally, including trading and credit systems and direct taxation.
• NRGI’s Extracting Emissions: Why Resource-Rich Countries Should Cut Emissions from Extractive Operations: A briefing setting out why cutting extractive sector emissions matters for maintaining the competitiveness of oil, gas and mining operations.