Climate accounting strengthens biofertiliser manufacturer's environmental efforts
Agro Trade documents its climate impact footprint in a tailor-made climate accounting, enhancing its image, meeting customers' needs, and preparing it for future regulatory requirements.
Climate accounting: a powerful tool
For small and large companies alike, climate accounting is a powerful tool that allows them to demonstrate to their customers and others that they are working hard to reduce their CO2 emissions.
EU regulations requiring companies to document climate-related efforts are becoming increasingly common. But what should a climate accounting include, and where does the data come from? Agro Trade, a biofertiliser manufacturer, has found answers to these questions.
From ash to fertiliser – a piece of the circular economy
Biomass plays a significant role in Denmark's transition to renewable energy and in reducing CO2 emissions. Biomass is an organic material, such as wood pellets, wood chips, and straw, that is converted into energy at facilities like combined heat and power plants. The Danish-Polish company Agro Trade specialises in collecting ash, a by-product of biomass combustion, enriching it with gypsum and other substances, and using it as fertiliser for agriculture in Poland. This way, Agro Trade prevents the leftover ash from ending up as waste, which is either landfilled or used in noise barriers. Its nutrients, including phosphorus and calcium, are lost if that happens.
Instead, the biomass is part of a new production cycle at Agro Trade, utilising nutrients whose other sources will eventually be depleted (e.g., phosphorus stores in mines) and reducing the need to produce artificial fertilisers. This is an excellent example of the circular economy.
Get a clear picture of CO2 emissions
A climate accounting provides an overview of a company's total CO2 emissions. It is a tangible way of identifying areas where efforts can be made to reduce the company's impact on the climate.
"At Agro Trade, we chose to develop a climate accounting to get a clear picture of how we as a company affect the environment, especially regarding CO2 emissions.
We want to show that our product has less of an impact on the climate than other solutions, and we see climate accounting as an essential step in clarifying our approach towards a sustainable and circular economy and meeting future requirements and expectations," says Mads Birkedal, management, Agro Trade.
Mads Birkedal refers to a future requirement: the EU's CSR Directive. CSR stands for "corporate sustainability reporting." The directive will take effect in 2025 and requires large companies to report on their sustainability.
Small- and medium-sized enterprises will be subject to the same requirements starting in 2027; however, SMEs supplying large companies are considered part of the "food chain" and may be indirectly affected as early as 2025. Agro Trade, itself an SME, finds itself in this very situation.
Direct and indirect CO2 emissions
In climate accounting, a company's greenhouse gas emissions are calculated in CO2 equivalents using numbers known as emission factors. An emission factor is a measure of greenhouse gas emissions per unit. For example, an emission factor can indicate how many kilograms of CO2 are emitted per litre of fuel consumed.
The CO2 emissions in a climate report are typically categorised into three scopes as defined in the Greenhouse Gas (GHG) Protocol, a greenhouse gas accounting and reporting standard.
The three scopes: direct and indirect CO2 emissions
Scope 1: Direct emissions from a company's sources, such as vehicles and facilities.
Scope 2: Indirect emissions from consumption of purchased electricity, steam, heating, and cooling.
Scope 3: Other indirect emissions in the value chain, such as transport, waste management, and production of purchased goods and services.
An overview from a custom Excel-based calculator
Agro Trade received help from FORCE Technology to prepare a climate accounting using a customised calculation tool built in Excel. However, Agro Trade fills out a ledger on its own, describing its consumption of everything from vehicle fuel to purchased gypsum.
FORCE Technology has calculated and quality-assured the emission factors against established standards, and the methodology is explained in a detailed background report.
"Having this Excel-based calculator developed has been a practical and efficient way for us to gather and analyse data across our activities. We've used it to collect and structure existing data.
The Excel calculator is designed to give us a clear overview of our resources and climate impact. Moreover, the tool allows us to see the carbon displacement that our products enable. This means that we can trust the results and know and document how the results were obtained," Birkedal explains.
A fourth scope shows CO2 savings
Agro Trade wanted to highlight the CO2-saving aspect of its biomass ash in its climate accounting. This is included in climate accounting as an activity outside the other three scopes, defined as "Avoided production of conventional fertiliser." Therefore, it has a negative sign in the ledger.
These CO2 savings have been quantified via an LCA screening study that FORCE Technology previously conducted for a company with which Agro Trade collaborates. Thus, the LCA screening initiated the collaboration and sparked the desire for full climate accounting at Agro Trade.
An autonomous future in climate accounting
Agro Trade now has a climate accounting system that clearly shows the company's CO2 emissions and supports sustainable development. From now on, the company will be largely self-sufficient regarding climate reporting.
However, FORCE Technology will continue to be an essential input source and a guarantor of data quality, especially when it comes to updating emission factors and expanding the climate accounting to include more activities in the future.
"We still need their input in a few areas, especially when updating the climate report due to new developments or areas. As a result, we will continue to work closely with FORCE Technology to ensure that we're constantly keeping pace with the green transformation as we develop our practices," says Mads Birkedal.
Established and independent backup supports quality in climate accounting
Agro Trade has significantly benefited from its collaboration with FORCE Technology, which has contributed both technical knowledge and practical experience.
"We chose FORCE Technology to help us with our climate reporting because they have the technical knowledge, certifications, standards, and practical experience. Having an established, independent organisation behind you also supports the quality of your climate reporting," Mads Birkedal points out.
The collaboration has provided Agro Trade with an efficient, Excel-based calculation tool to document the company's CO2 emissions and promote its sustainable practices. "Our collaboration with FORCE Technology has been very positive," Birkedal concludes. They've been responsive to our needs and have taken an efficient approach to solving the challenges we've faced."
Agro Trade also sees future potential in utilising FORCE Technology's expertise in several areas, such as documentation and calculation, to develop even more environmentally friendly products.
