This article provides a comprehensive exploration of carbon intensity metrics; critical tools for understanding and managing greenhouse gas emissions.
By measuring emissions per unit of activity, these metrics enable businesses, governments, individuals and organisations to evaluate and develop effective strategies for emission reduction.
From the energy and transportation sectors to agriculture and manufacturing, we examine how carbon intensity metrics guide sustainable practices and support sustainable development in both developed and developing countries.
With focus on carbon offsetting projects to the application of the metrics across industries, learn how carbon intensity metrics are widely utilised to accelerate the fight against climate change.
What is Carbon Intensity?
Carbon intensity measures the amount of carbon dioxide emissions linked to specific outputs or activities—such as manufacturing goods, transportation, or energy generation.
The concept emerged alongside the late 20th century’s growing awareness of GHG emissions’ central role in climate change. By the 2010s, it had become a mainstream concept, driven by international treaties like the Paris Agreement and advancements in emissions tracking technologies.
The vast majority of carbon accounting software uses carbon intensity measures to assess emissions per unit of activity, streamlining understanding and methods of reporting.
What are Carbon Intensity Metrics?
While carbon intensity is a measurement of how much CO₂ is emitted per unit of economic activity, carbon intensity metrics are specific calculations and measurements. These allow the quantification of the greenhouse gas emissions linked to specific activities, enabling comparisons across industries, processes, or products.
For example, CO₂e per kilowatt-hour measures emissions from electricity generation, allowing people to understand which energy sources are the best for the planet. On the other hand, CO₂e per Passenger-Kilometer measures which modes of transport are the most sustainable.
The UK’s greenhouse gas (GHG) emissions peaked in 2007 at 963 mt CO2e, and in 2021, the UK’s GHG emissions were 27% lower than their 2007 peak at 705 mt CO2e.
Key Carbon Intensity Metrics
Carbon Dioxide Equivalent Emissions Per Unit of Energy Produced (CO₂e/kWh)
This carbon intensity metric measures greenhouse gas emissions produced for each unit of electricity generated, allowing for the comparison of energy types such as coal, natural gas, nuclear, solar, and wind.
As a result of tracking carbon intensity through this metric, the UK has been able to significantly reduce its reliance on fossil fuels and accelerate the transition to renewables.
Carbon Dioxide Equivalent Emissions Per Square Foot (CO₂e/sqft)
CO₂e/sqft quantifies the amount of emissions linked with a building’s energy use, focusing on heating and cooling, lighting, and energy consumption of appliances. This quantifies how energy efficient an area is, allowing for the identification of reduction opportunities such as LED swaps.
With 25% of the UK’s total GHG emissions attributable to the built environment in 2022, this sector is highly important and requires targeted efforts to reduce emissions.
Carbon Dioxide Equivalent Emissions Per Passenger-Kilometer (CO₂e/p-km)
CO₂e/p-km measures the amount of greenhouse gas emitted by 1 passenger per kilometre travelled. This takes into consideration factors such as vehicle efficiency, energy sources, distance travelled, fuel types, and more.
The transport sector accounted for 34% of total UK GHG emissions in 2022, taking up the largest proportion—significantly coming from diesel cars, domestic flights, and electric cars—making this metric an area of extreme importance.
Carbon Dioxide Equivalent Emissions Per Million Dollars of Revenue (CO₂e/$M)
CO₂e/$M measures the amount of GHG emissions produced for every million dollars of revenue a business generates. This metric is critical for investors to align with ESG goals.
Industries in manufacturing or transportation usually have high CO₂e/$M as they revolve around emission–heavy practices. Key drivers of this metric include the scope of operations, the nature of the industry, the impact of the supply chain, and energy consumption patterns.
Carbon Dioxide Equivalent Emissions Per Unit of Product (CO₂e/product)
CO₂e/product measures the amount of emissions produced for either a single product in its lifetime, or all versions created of a sole product, and their lifecycles.
The metric tends to consider the processes of extracting, manufacturing, packaging, transporting, and end-of-life disposal for a comprehensive overview of downstream and upstream emissions from a single product.
For instance, steel and cement industries are some of the most carbon-intensive industries per product—responsible for 7% of GHG emissions alone.
Carbon Dioxide Equivalent Emissions Per Building Area (CO₂e/m²)
CO₂e/m² is the UK/Eur counterpart of the US imperial CO₂e/sqft.
It is similarly a carbon intensity metric that measures GHG emissions associated with a building’s energy use, usually in an annual period.
Methane Emissions Per Unit of Livestock Produced (CH₄/head of livestock)
This carbon intensity metric differs from the rest—quantifying the amount of methane emitted by an animal during its lifetime, primarily from digestion and manure management processes. A “head” is a farming term for an animal, such as cattle, sheep, or pigs.
This calculation can reveal striking opportunities to slash emissions, such as improving a diet (e.g. ‘seaweed supplements’), leading to less methane production from digestion and reducing emissions from manure management practices.
Applications of Carbon Intensity Metrics
Monitoring and Reporting Corporate Emissions
The carbon intensity metrics are a staple in carbon accounting software, facilitating the reporting and monitoring of corporate emissions—all the way from employee transport to printing paper used.
These allow organisations of any scale to comply with regulatory requirements while providing transparency to all necessary stakeholders.
The metrics allow identification of the baseline, from where reduction targets can be set and achieved over time.
Tracking Progress Toward Net-Zero Goals
The third of the UK’s biggest companies have committed to becoming Net Zero by 2030—including BT, Sainsbury’s, and Unilever.
Their respective progress will be monitored by the tracking of various carbon intensity metrics, ensuring that the ratio of emissions per economic activity keeps a downward trajectory. This allows for the identification of both gaps and opportunities, driving sustainable practices.
Benchmarking Industry Emissions Standards
Carbon intensity metrics are frequently used to set benchmarks across similar sectors as they easily reveal average emissions for similar companies.
In the UK, these metrics help industries like energy, transport, and construction track their emissions performance against sector averages.
By using carbon intensity data, businesses can identify areas for improvement and align their sustainability efforts with national and global climate goals.
Informing Carbon Pricing Policies
By quantifying the amount of carbon emitted per unit of activity—such as transport, electricity, or heating—carbon intensity metrics help set appropriate carbon prices for a variety of sectors.
For instance, the Carbon Price Floor (CPF), which is the UK government’s minimum carbon price for electricity generation after using the carbon intensity of electricity (gCO2/kWh).
The CPF, then, ensures that organisations like fossil fuel power plants must buy permits to emit carbon, and these permits cost money. The higher the carbon emissions from their activities (like burning coal or gas), the more they have to pay.
This makes it more expensive to pollute and encourages these companies to use cleaner energy sources, like wind or solar power, which don’t produce as much carbon.
Evaluating Product Lifecycle Impacts
Carbon intensity metrics allow for the understanding of a product’s emissions from the start to the end of its lifetime—such as t-shirt’s raw cotton farming, manufacturing, transportation, and then its end of life.
This is because the metrics calculate emissions across the entire cycle through various stages, not only to understand all impacts of a product but to crucially identify where most emissions are coming from, to make necessary adjustments.
Supporting Renewable Energy Transition Analysis
The UK is approaching the halfway point of its renewable energy transition, which has been massively aided by emission tracking from the metrics. For instance, the move from coal-fired power plants to offshore wind farms significantly lowers CO₂e/kW.
The metrics reveal areas needing extra investment to further the transition, and provide the necessary data to monitor and understand national progress.
Optimising Supply Chain Emissions
The metrics crucially reveal emissions throughout the entire supply chain, from production to delivery. They prompt businesses to cover all bases, reducing the environmental impact while simultaneously making processes more streamlined and efficient.
Designing Low-Carbon Transportation Systems
Carbon intensity metrics are shaping the development of transportation systems, helping cities like London plan low-emission zones and encourage the use of public transport.
A great example is London’s ULEZ (Ultra Low Emission Zone), which reduces emissions by charging higher fees for vehicles with high CO₂e/p-km. Using automatic number plate recognition, vehicles in the zone are identified, and non-compliance with emission standards incurs a daily fee. A diesel car registered before September 2015, for instance, could incur a £12.50 fine.
ULEZ has proved to improve air quality and lower pollution, showing the carbon metrics can achieve the implementation of sustainable systems.
Assessing Building Energy Efficiency
Carbon intensity metrics evaluate building energy use and emissions by measuring carbon output per square meter.
In the UK, this helps homes and offices meet energy performance standards, such as EPC ratings, by encouraging better insulation, retrofitting, and energy-saving technologies like LED lighting and heat pumps.
For instance, a new London office with solar panels and efficient heating minimises CO₂e/m², while setting a benchmark for sustainable design.
Measuring Agricultural Emissions Performance
Metrics such as the CH₄/head track emissions from areas of farming, reducing the overall footprint of agricultural activities.
Improving the diet of cattle, for instance, lowers emissions by reducing methane production during digestion, helping to minimize the environmental impact of livestock farming.
Developing Carbon Offset Strategies
By measuring emission intensity, companies highlight high-emission areas where carbon offsetting may be the most appropriate strategy—such as indirect scope 3 emissions which the organisation have less direct control over.
For instance, purchasing carbon credits for algae farming, reforestation or wetland restoration—each carbon credit sends funds towards the project developers to ensure environmental benefits and emission reductions take place. Carbon offsets help companies achieve carbon neutrality, and achieve long-term climate action.
To explore 7 examples of effective carbon offset projects, see our recent blog here.
Supporting Green Investment Decisions
The metrics largely support green investment decisions, as investors can use the metrics to assess a company’s environmental impact.
They allow investors to compare companies within the same sector, and invest in those with lower emission intensities. They can track the progress of the companies, and those with improving metrics are better equipped for the green transition, and usually better managed, hence more appealing to investors.
Examples of Carbon Intensity Metrics
Energy Sector: CO₂e/kWh for electricity generation by coal, natural gas, and renewable sources
CO₂e/kWh measures emissions from energy production, comparing coal, natural gas, and renewable sources, guiding efforts to reduce carbon footprints.
Drax Group, for example, have reduced CO₂e/kWh by moving from coal to biomass with a focus on renewable energy.
Manufacturing: CO₂e per ton of steel, cement, or other industrial materials produced
CO₂e per ton measures emissions during manufacturing, helping industries like steel and cement improve efficiency and reduce environmental impact.
Transportation: CO₂e/p-km for cars, trains, and aeroplanes
CO₂e/p-km quantifies emissions per passenger kilometre travelled, enabling comparison of transportation modes and supporting sustainable travel choices.
National Rail tracks CO₂e/p-km for train journeys and is actively electrifying its railway lines to encourage more environmentally-friendly electric train travel.
Buildings: CO₂e/m² for residential and commercial spaces based on energy use
CO₂e/m² calculates emissions based on building size and energy use, helping assess energy efficiency and implement low-carbon solutions.
Agriculture: CH₄/head of livestock for cattle or sheep farming
CH₄/head tracks methane emissions per livestock, highlighting opportunities to reduce emissions through better livestock management and diet improvements.
Retail: CO₂e/unit for packaged goods or electronics
CO₂e/unit measures emissions for each product sold, guiding retailers toward sustainable sourcing, packaging, and reducing environmental footprints.
Corporate Operations: CO₂e/$M revenue for businesses in various industries
CO₂e/$M tracks emissions relative to revenue, helping businesses evaluate their environmental performance and drive sustainability alongside financial growth.
More Information
https://www.sustain.life/blog/absolute-emissions-carbon-intensity
https://www.spglobal.com/spdji/en/documents/additional-material/spdji-esg-carbon-metrics.pdf
https://ghgprotocol.org/sites/default/files/2022-12/AppendixC.pdf
https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/sustainable-investing/understanding-carbon-exposure-metrics.pdf
https://www.everstream.ai/articles/capturing-carbon-intensity-score/
https://www.chevron.com/newsroom/2022/q4/explainer-what-is-carbon-intensity
https://earthshiftglobal.com/blog/carbon-footprint-vs.-carbon-intensity
https://css.umich.edu/publications/factsheets/sustainability-indicators/carbon-footprint-factsheet
https://corporate.exxonmobil.com/sustainability-and-reports/metrics-and-data