# GHG inventory for Scope 1 and Scope 2

Canonical: https://finbryn.com/us/services/esg-climate-reporting-support/ghg-inventory-scope-1-2

Finbryn provides greenhouse gas inventory preparation for US companies asked for emissions data by a customer, lender or regulator, compiling activity data and applying EPA's January 2025 Emission Factors Hub and GHG Protocol methods to produce Scope 1 and Scope 2 totals plus a methodology note for management to approve. Finbryn provides no verification or assurance.

A greenhouse gas inventory is a short set of totals resting on a long paper trail. Scope 1 counts direct emissions from fuel the company burns and refrigerant it loses. Scope 2 counts the emissions behind the electricity, steam, heat and cooling it buys. Totals are stated in metric tons of carbon dioxide equivalent (CO2e), which is the form a customer questionnaire, a lender covenant or California's SB 253 asks for.

Most mid-sized US companies can build a first inventory from documents they already hold. Fuel cards and fleet reports carry the vehicle data, gas and oil invoices carry the boiler data, and utility bills carry the electricity. The finance team knows where each document sits and which entity paid for it, and reconciling that spend to the activity data catches a missing meter before a customer does.

Finbryn compiles the activity data, applies published factors and writes the methodology note. The inventory belongs to management, who approve it before it goes anywhere. We do not verify it or give assurance. If a regulator, lender or customer wants assurance, an independent provider you engage performs it, and the file we leave is built so that provider can test from source documents.

Two questions come before the first number is calculated. Which period does the request name? A customer or regulator asks for a fiscal or calendar year, and SB 253 ties the year to the entity's year-end. And which boundary applies? That choice decides which sites and subsidiaries count. The sections below take them in turn, and the worked example shows the arithmetic with EPA's January 2025 factors.

What you get: Organizational boundary memo naming the consolidation approach; Activity data schedules for fuel, refrigerants, electricity, steam and heat, tied to invoices and meter reads; Scope 1 total, plus Scope 2 on both location-based and market-based methods; Emission factor register with source, edition and vintage for every factor; Methodology note for management to approve; Reconciliation of utility and fuel spend in the ledger to the activity data

Software we work in: Microsoft Excel, EPA GHG Emission Factors Hub, NetSuite, QuickBooks Online

## What goes into a Scope 1 and Scope 2 inventory?

Four decisions come before any arithmetic: the reporting period, the organizational boundary, the gases in scope and the factor sources. Once those are written down, each emission source needs a quantity and a document behind it.

| Source | Scope | Document that holds the quantity |
| --- | --- | --- |
| Natural gas or fuel oil in boilers and furnaces | 1 | Supplier or utility invoices |
| Company vehicles and equipment | 1 | Fuel card and fleet reports |
| Refrigerant top-ups | 1 | HVAC service records |
| Purchased electricity | 2 | Utility bills and meter reads |
| Purchased steam, heat or cooling | 2 | District energy invoices |

Customers that must report Scope 3 emissions will turn to their suppliers for this data, and California's SB 253 starts Scope 3 in 2027 on a schedule CARB is still writing. A supplier with a clean Scope 1 and Scope 2 inventory can answer those requests from one file instead of rebuilding the numbers for each.

Diagram: From invoices to a Scope 1 and Scope 2 total. Six steps: set the boundary, collect activity data, choose factors, calculate CO2e, write the methodology note, then management approves the inventory.

## How do you set the organizational boundary?

The GHG Protocol Corporate Standard lets a company consolidate emissions by equity share or by control, and a company that picks control must choose between financial control and operational control. For a wholly owned company with no joint operations the boundary comes out the same whichever approach is used. It starts to matter with joint ventures, leased sites and partly owned subsidiaries.

Write the choice down and keep it for every year. Two practical rules save rework. First, match the boundary to whoever files: a parent that reports for its subsidiaries under SB 253 needs the same entity list in the inventory as in the consolidated filing, and each reporting entity's revenue and California sales are still tested separately. Second, if a customer questionnaire names a consolidation approach, use that one and say so in the methodology note rather than reworking the inventory later.

## Worked example: 1,000 mmBtu of natural gas and 1,000 MWh of electricity

The quantities below are illustrative. The factors come from EPA's GHG Emission Factors Hub, 2025 edition (last modified January 15, 2025), which uses IPCC AR5 100-year GWPs of 28 for methane (CH4) and 265 for nitrous oxide (N2O).

**Scope 1: natural gas in a boiler.** Table 1 gives 53.06 kg CO2, 1.0 g CH4 and 0.10 g N2O per mmBtu.

| Gas | Quantity for 1,000 mmBtu | GWP | kg CO2e |
| --- | ---: | ---: | ---: |
| CO2 | 53,060 kg | 1 | 53,060 |
| CH4 | 1,000 g (1 kg) | 28 | 28 |
| N2O | 100 g (0.1 kg) | 265 | 26.5 |
| Total | | | 53,114.5, about 53.1 metric tons |

**Scope 2, location-based: grid electricity in California.** Table 6 (eGRID2023) gives, for the WECC California subregion, 436.7 lb CO2, 0.025 lb CH4 and 0.003 lb N2O per MWh.

| Gas | Quantity for 1,000 MWh | GWP | lb CO2e |
| --- | ---: | ---: | ---: |
| CO2 | 436,700 lb | 1 | 436,700 |
| CH4 | 25 lb | 28 | 700 |
| N2O | 3 lb | 265 | 795 |
| Total | | | 438,195, about 198.8 metric tons |

The same 1,000 MWh at the US average rate in that table (771.5 lb CO2, 0.057 lb CH4 and 0.008 lb N2O per MWh) comes to about 351.6 metric tons, so the subregion a site sits in changes the answer by more than a third. A real inventory repeats this for every fuel, site and month.

## What is the difference between location-based and market-based Scope 2?

The GHG Protocol's Scope 2 Guidance (January 2015) says a company with operations in markets that offer product or supplier-specific data, in the form of contractual instruments, reports Scope 2 emissions in two ways and labels each result. This is called dual reporting.

- **Location-based** uses average emission factors for the grid where the electricity was used. The worked example above is a location-based figure.
- **Market-based** reflects the electricity the company chose, through supplier-specific rates, renewable energy certificates or power purchase agreements that meet the guidance's eight Scope 2 Quality Criteria, and uses a residual mix, where one exists, for electricity not covered by a contract.

Not having contractual data for every site does not make a company noncompliant with the Corporate Standard or the Scope 2 Guidance, and a company with operations only in markets without such data reports one result.

The rules are being rewritten. The GHG Protocol held public consultations on Scope 2 changes between October 20, 2025 and January 31, 2026. Its October 14, 2025 post describes a draft that would require hourly matching of certificates to consumption, from deliverable grid regions, and says all proposals remain subject to consultation. The post anticipates a revised Scope 2 Standard in late 2027. Until then the 2015 guidance is the published text.

## Which emission factors should a US company use?

EPA's GHG Emission Factors Hub is the usual starting point for US companies. Its 2025 edition (January 2025) updated purchased-electricity factors from eGRID and the factors for mobile combustion, transportation, business travel and commuting, and EPA's page, updated January 12, 2026, still lists it as the current edition. Two notes in the hub matter in practice. Annual non-baseload output rates should not be used for an inventory, and the grid gross loss percentages should not be applied to Scope 2 for an end user (they help with Scope 3, category 3).

Electricity is where the edition problem sits. The hub's Table 6 is built on eGRID2023. CARB's guidance of September 1, 2026 notes that EPA had not released eGRID 2024 on its usual timeline, and says filers may use eGRID 2023, the eGRID 2024 dataset published by the Cornerstone Sustainability Data Initiative, or another credible source, as long as they identify the one used.

Whatever the choice, the factor register records the dataset, edition, table and GWP vintage for every line. A customer or regulator can then see why a number moved when a new edition arrives, and a later GWP change (the hub uses AR5 today) does not look like an error.

## What do you receive at the end?

The package is built for management's review and for an assurance provider's testing if one is ever engaged:

- An organizational boundary memo and the entity and site list.
- Activity data schedules by site and month, each line tied to an invoice, fleet report or meter read.
- A Scope 1 total, and a Scope 2 total on both methods where the company holds contractual instruments.
- A factor register with source, edition, table and GWP vintage.
- A methodology note covering estimates, exclusions and anything that changed since the last period.
- A reconciliation of fuel and utility spend in the general ledger to the activity data.

The same schedules feed the [SB 253 report package](/services/esg-climate-reporting-support/california-sb-253-reporting-support) and the ISSB and CSRD data requests that groups send to their US entities. Where the data has to come out of several systems on a schedule, [finance data pipelines](/services/finance-ai-automation/finance-data-pipelines-dashboards) keep it from being rebuilt by hand each year, and the evidence folder follows the same layout as our [working papers](/services/audit-compliance-support/working-papers).

## The process

1. **Confirm who is asking and in what form**: The customer questionnaire, lender covenant or regulation names the period, boundary approach and GWP vintage, if it names any.

2. **Fix the boundary**: Entities, sites and consolidation approach are set and recorded before data is collected.

3. **Collect and reconcile activity data**: Fuel, refrigerant, electricity, steam and heat quantities are pulled from documents and reconciled to ledger spend.

4. **Apply factors and calculate**: Named factors and GWP values turn quantities into CO2e, with Scope 2 on both methods where contracts exist.

5. **Write the methodology note**: Estimates, exclusions, edition choices and open items are listed in one note.

6. **Management reviews and approves**: Your team signs off the inventory. Any assurance request goes to an independent provider.

## Common problems we fix

| The problem | How we fix it |
| --- | --- |
| Utility data is spread across sites, suppliers and accounts | A site-by-month activity schedule lists every account and flags the months with no bill, so gaps are visible before a customer sees them. |
| Different customers ask for different boundaries and GWP values | The inventory keeps one master calculation with the factors and GWP vintage stated, and each request is answered from it with the differences noted. |
| Electricity is reported on one method only | Where the company holds contractual instruments, both Scope 2 totals are calculated and labeled. |
| Nobody can say where a factor came from | The factor register names the dataset, edition and table for each conversion. |

## By the numbers

| Figure | What it means | Source |
| --- | --- | --- |
| 771.5 lb CO2 per MWh | US average grid output rate, eGRID2023, EPA Emission Factors Hub Table 6 | [epa.gov/system/files/documents/2025-01/ghg-emission-factors-hub-2025.pdf](https://www.epa.gov/system/files/documents/2025-01/ghg-emission-factors-hub-2025.pdf) (2026-10-16) |
| 53.06 kg CO2 per mmBtu | Natural gas combustion factor, EPA Emission Factors Hub Table 1 | [epa.gov/system/files/documents/2025-01/ghg-emission-factors-hub-2025.pdf](https://www.epa.gov/system/files/documents/2025-01/ghg-emission-factors-hub-2025.pdf) (2026-10-16) |
| 28 and 265 | 100-year GWPs for CH4 and N2O in EPA's 2025 hub (IPCC AR5) | [epa.gov/system/files/documents/2025-01/ghg-emission-factors-hub-2025.pdf](https://www.epa.gov/system/files/documents/2025-01/ghg-emission-factors-hub-2025.pdf) (2026-10-16) |
| Oct 20, 2025 to Jan 31, 2026 | GHG Protocol public consultation window on Scope 2 changes | [ghgprotocol.org/public-consultations](https://ghgprotocol.org/public-consultations) (2026-10-16) |

Pricing: Scoped per engagement from the number of entities and sites in the boundary and the state of the activity data. It is priced separately from the monthly tiers on the rate card, and the fee is confirmed in writing before any inventory work begins. ([See pricing](https://finbryn.com/us/pricing))

## Glossary

- **CO2e**: Carbon dioxide equivalent: other gases converted to the amount of CO2 with the same warming effect, using a global warming potential.

- **GWP**: Global warming potential: the factor that converts a gas to CO2e. EPA's 2025 hub uses IPCC AR5 values of 28 for methane and 265 for nitrous oxide.

- **Location-based method**: Scope 2 calculated with average emission factors for the grid where the electricity was consumed.

- **Market-based method**: Scope 2 calculated from the electricity a company chose, using supplier-specific or contractual-instrument factors and, where one exists, a residual mix for electricity not covered by a contract.

- **eGRID**: EPA's Emissions and Generation Resource Integrated Database, the source of US grid subregion emission rates.

## Frequently asked questions: GHG inventory for Scope 1 and Scope 2

**Q: How do I calculate Scope 1 and Scope 2 emissions for my company?**

A: Multiply each activity quantity (mmBtu of gas, gallons of fuel, MWh of electricity) by its emission factor, convert each gas to CO2e with a GWP, then total by scope. With EPA's January 2025 factors, 1,000 mmBtu of natural gas is about 53.1 metric tons CO2e, and Scope 2 is reported on both the location-based and market-based methods where the company holds contracts.

**Q: Which emission factors should a US company use?**

A: EPA's GHG Emission Factors Hub, 2025 edition (January 2025), is the usual default, with electricity from eGRID2023. CARB's guidance of September 1, 2026 notes eGRID 2024 had not been released on EPA's usual timeline and allows other credible sources if the filer names them.

**Q: What is the difference between location-based and market-based Scope 2?**

A: Location-based uses the average factor for the grid where the electricity was used. Market-based reflects the electricity the company chose to buy, through supplier-specific rates or certificates that meet the Scope 2 Quality Criteria. The GHG Protocol's 2015 guidance asks for both where contractual instruments are available.

**Q: Do we need a GHG inventory if no law requires one?**

A: Not by law, but customers and lenders ask for one. A company above $1 billion in revenue that does business in California faces SB 253's first report on November 10, 2026, and Scope 3 begins in 2027 on a schedule CARB is still writing, which is when supplier requests are likely to grow. Counsel decides whether a law applies.

**Q: Does Finbryn verify or assure the inventory?**

A: No. Finbryn prepares the inventory and the methodology note for management to approve. Verification and assurance are performed by an independent assurance provider you engage, and no figure in the file is described as verified. CARB's guidance of September 1, 2026 accepts first-year SB 253 filings with or without assurance.

**Q: What do you need from us to start?**

A: The entity and site list, the reporting period, and access to fuel, refrigerant and utility records for that period, plus any customer or regulator template that fixes the boundary or GWP values. For an SB 253 report due November 10, 2026, the fiscal year-end decides which year is covered. Missing months are estimated by a method written into the methodology note.

**Q: Can a company with patchy data still produce an inventory?**

A: Yes. Gaps are filled with a stated estimation method, such as using the neighboring months or a per-square-foot proxy, and the note lists each estimate and its share of the total, so a reviewer sees what rests on assumptions. CARB's guidance of September 1, 2026 encourages filers to describe methodologies, data sources and assumptions in the same way.

Related services:
- [California SB 253 reporting support](https://finbryn.com/us/services/esg-climate-reporting-support/california-sb-253-reporting-support)
- [Finance data pipelines and dashboards](https://finbryn.com/us/services/finance-ai-automation/finance-data-pipelines-dashboards)
- [Working paper preparation](https://finbryn.com/us/services/audit-compliance-support/working-papers)

Industries:
- [Manufacturing](https://finbryn.com/us/industries/manufacturing)
- [Trucking and logistics](https://finbryn.com/us/industries/trucking-logistics)

Related guides:
- [ISSB, CSRD, GRI and California SB 253 compared for US companies](https://finbryn.com/us/guides/esg-reporting-frameworks-compared)
- [California SB 253 vs SB 261: who must report, what, and when](https://finbryn.com/us/guides/california-sb-253-vs-sb-261-who-must-report)

## Sources

1. [EPA, GHG Emission Factors Hub (2025 edition, page updated January 12, 2026)](https://www.epa.gov/climateleadership/ghg-emission-factors-hub) (2026-10-16)
2. [EPA, Emission Factors for Greenhouse Gas Inventories, 2025 edition (last modified January 15, 2025)](https://www.epa.gov/system/files/documents/2025-01/ghg-emission-factors-hub-2025.pdf) (2026-10-16)
3. [GHG Protocol, Corporate Standard](https://ghgprotocol.org/corporate-standard) (2026-10-16)
4. [GHG Protocol, Scope 2 Guidance (January 2015)](https://ghgprotocol.org/scope_2_guidance) (2026-10-16)
5. [GHG Protocol, public consultations on Scope 2 and the Corporate Standard](https://ghgprotocol.org/public-consultations) (2026-10-16)
6. [GHG Protocol, Upcoming Scope 2 public consultation: hourly matching and deliverability (October 14, 2025)](https://ghgprotocol.org/blog/upcoming-scope-2-public-consultation-hourly-matching-and-deliverability) (2026-10-16)
7. [CARB, Guidance for SB 253 2026 Reporting Submittals (September 1, 2026)](https://ww2.arb.ca.gov/sites/default/files/2026-09/2026_SB253_Reporting_Guidance.pdf) (2026-10-16)

Reviewed October 2026

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