Amid the global ambition to achieve net zero, the world needs a universal, transparent, and credible framework for measuring greenhouse gas (GHG) emissions. That framework is the GHG Protocol.
This framework serves as the backbone of credible net-zero claims, ensuring that a company’s sustainability commitments, especially in the energy sector, are verifiable, trustworthy, and not mere empty slogans.
What Is the GHG Protocol?
The GHG Protocol is a global partnership that develops the world’s most widely used standards for accounting and reporting greenhouse gas emissions.
Launched in 1998 by two international non-profit organizations, the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), its primary goal is to create globally applicable standards for measuring and reporting GHG emissions in a consistent, transparent, and verifiable way.
The first GHG Protocol standard, the Corporate Standard, was released in 2001. Since then, it has become the leading reference for companies, governments, and institutions worldwide in managing and reporting their carbon footprints.
Through this framework, organizations can identify their emission sources, set realistic reduction targets, and accurately report their climate mitigation progress.
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How Does the GHG Protocol Work?
The process of measuring emissions under the GHG Protocol follows a structured and methodological approach to ensure all emission sources are considered.
Setting Boundaries
The first and most crucial step in GHG reporting is boundary setting, which includes two main types:
- Organizational Boundary: Determines which entities are included in the reporting (e.g., headquarters, subsidiaries, or manufacturing facilities).
- Operational Boundary: Defines specific emission sources to be measured, categorized as Scope 1, 2, and 3.
Emission Scopes (1, 2, and 3)
The GHG Protocol classifies emissions into three scopes to capture impacts across the entire value chain:
- Scope 1: Direct emissions from sources owned or controlled by the company (e.g., fuel combustion at facilities).
- Scope 2: Indirect emissions from purchased electricity, heat, or steam.
- Scope 3: Other indirect emissions throughout the value chain, such as transportation, waste, supplier activities, and product use.
Calculation Methodology
Once the reporting boundaries are set, the next step is the systematic calculation of GHG emissions. This step measures how many emissions result from a company’s operational activities.
Key steps include:
- Identifying emission sources, e.g., fuel combustion, electricity consumption, industrial processes, or logistics.
- Collecting activity data, such as fuel use or electricity consumption (in liters, kWh, etc.), which determines emission quantities.
- Developing an emissions inventory serving as the foundation for reporting, trend analysis, and future emission reduction strategies.
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Who Should Use the GHG Protocol?
In practice, the GHG Protocol is not just for environmental activists. It’s also a crucial tool for risk management and financial reporting. So, who needs to use it?
Energy Companies (Oil & Gas, Power, Renewables)
The energy sector is the world’s largest contributor to GHG emissions, primarily through:
- Scope 1: Direct fossil fuel combustion
- Scope 3: Energy use by consumers
Therefore, energy companies are among the main users of the GHG Protocol to measure, manage, and transparently report their emissions.
Other Major Industries
Beyond energy, large industries such as manufacturing, logistics, transportation, and construction also apply the GHG Protocol to measure and report emissions.
This framework helps companies identify key emission sources, improve energy efficiency, and meet reporting requirements from investors, customers, and regulators.
Governments and Regulatory Agencies
Governments and regulators worldwide also use the GHG Protocol as a reference for designing emission policies and reporting guidelines.
For instance, the U.S. Environmental Protection Agency (EPA) and European environmental agencies adopt GHG Protocol principles in developing emission reporting frameworks for corporations and industries.
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Why Is the GHG Protocol Crucial for Achieving Net Zero?
The GHG Protocol is the foundation of credibility in any net-zero commitment. It provides globally standardized methods for emission accounting, ensuring consistent and transparent data.
For companies in Indonesia, adopting the GHG Protocol enables them to benchmark emission performance and reduction targets against peers in Europe or the U.S. using a common data language.
Additionally, the framework helps track progress toward net zero through its Scope 1, 2, and 3 structure, allowing clear mapping of emissions across the entire value chain.
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Why the GHG Protocol Matters for LNG
For the Liquefied Natural Gas (LNG) industry, implementing the GHG Protocol is especially critical.
LNG is often labeled a transition fuel toward a low-carbon economy because it produces less carbon dioxide than coal or oil. However, its reputation as a “cleaner fuel” depends heavily on accurate GHG reporting, and that’s where the GHG Protocol comes in.
Oil and gas companies, including LNG producers, are encouraged to use methodologies consistent with the GHG Protocol.
This approach ensures that emissions data, especially regarding methane (CH₄), are measured and reported credibly and are accepted by international investors and buyers who prioritize climate accountability.
References:
- Greenhouse Gas Protocol. Accessed 2025. About Us
- The Greenhouse Gas Protocol. Accessed 2025. A Corporate Accounting and Reporting Standard
- Carbon Neutral. Accessed 2025. Scope 1, 2, and 3 Emissions Explained
- EPA. Accessed 2025. Scope 1 and Scope 2 Inventory Guidance
