Bilan Carbone Companies Local Authorities - Regions. Methodology guide - version 6.1 - objectives and accounting principles

Bilan Carbone Companies Local Authorities - Regions Methodology guide - version 6.1 - objectives and accounting principles June 2010

ADEME in brief: The French Agency for Environment and Energy Management (ADEME) is a public establishment under the joint oversight of the Ministry of Ecology, Energy, Sustainable Development and Town and County Planning and the Ministry of Higher Learning and Research. It takes part in implementing public policy in the fields of the environment, energy and sustainable development. The Agency provides its expertise and advice to businesses, local municipalities, government agencies and the general public, and helps them both to fund projects in five areas (waste management, soil preservation, energy efficiency and renewable energy, air quality, and reducing noise pollution) and to move forward in their sustainable development initiatives. www.ademe.fr Bilan Carbone is a registered trademark of ADEME The Bilan Carbone methodology has been developed for ADEME by Jean-Marc Jancovici, of the Manicore engineering office. 2001-2010 - Methodology Guide - Version 6.1 2/116

TABLE OF CONTENTS 0 - Introduction...8 0.1 Warning...8 0.2 The new features in version no. 6...8 0.3 - Access to the methodology and the documents which comprise it...9 1 - Objectives and general information about the methodology...10 1.1 - Overall principle...10 1.2 - Principle of the emission factor...11 1.3 Sector targets...12 1.4 Geographic application...13 1.5 Objectives of a Bilan Carbone assessment...14 1.6 Documents and spreadsheets associated with the method...15 1.7 Compatibility with other assessment exercises and standardisation processes...17 2 Accounting principles and limitations in the Bilan Carbone...18 2.1 - Gases retained and measurement units...18 2.1.1 - Greenhouse gases retained... 18 2.1.1.1 General information concerning all assessment exercises... 18 2.1.1.2 - Special features of the Bilan Carbone methodology... 19 2.1.2 - CO 2 of organic origin... 19 2.1.3 - Sources selected... 20 2.1.4 - Notion of GWP Global Warming Power... 20 2.1.5 - Units used in the spreadsheets... 21 2.2 - Limitations concerning emission factors and certain specific uses...21 2.2.1 - Temporal validity of emission factors... 22 2.2.2 - Taking account of recycling in emission factors... 22 2.2.2.1 Avoided impacts method... 23 2.2.2.2 - Stocks method... 23 2.2.2.3 Methodological choice in the Bilan Carbone... 24 2.2.3 - Emission factors for semi-finished products and services... 25 2.2.4 - Usage emissions of products sold... 26 2.2.4.1 General case... 26 2.2.4.2 Special case of emissions occurring over several decades... 27 2.2.5 - End-of-life emissions of products sold... 27 2.3 Deliberately excluded sources...27 2.3.1 - Emission credits... 27 2.3.1.1 - Carbon sinks... 27 2.3.1.2 - Offsetting... 27 2.3.1.3 - Sequestration... 27 2.3.2 - Waste or effluent management activity: incoming material... 27 2.3.3 Usage or end-of-life emissions for a service provided by a local authority... 27 2.4 Precautions concerning the use of the results from the Bilan Carbone assessment...27 2001-2010 - Methodology Guide - Version 6.1 3/116

2.4.1 Defining the greenhouse gas content for a product or a service... 27 2.4.2 - Creating ratios and comparison difficulties... 27 2.4.2.1 - Review of monetary ratios... 27 2.4.2.2 Limitations of the greenhouse effect unit indicator... 27 2.4.2.3 Precautions to take when drawing up a ratio... 27 Note that the spreadsheet includes a function for drawing up ratios automatically. This function is provided thanks to the characteristics of the site supplied by the user (physical and monetary data)... 27 2.4.2.4 Special case of comparisons between regions... 27 3 - Application to industrial and tertiary companies...27 3.1 - Entities concerned...27 3.2 - Description of the emission sources taken into account...27 3.2.1 - Energy use within the entity... 27 3.2.2 - Emissions from industrial or agricultural processes (except for those resulting from using energy)... 27 3.2.3 - Incoming materials and tertiary services... 27 3.2.3.1 - Incoming materials... 27 3.2.3.2 - Tertiary services excluding transport... 27 3.2.4 - Packaging of products sold or distributed... 27 3.2.5 - Freight... 27 3.2.6 Transporting people... 27 3.2.6.1 - Home work travel... 27 3.2.6.2 Employees travel for work... 27 3.2.6.3 - Visitors travel... 27 3.2.7 - Direct waste and sewage... 27 3.2.7.1 - Harmless waste... 27 3.2.7.2 - Hazardous waste... 27 3.2.7.3 - Waste water... 27 3.2.8 - Depreciation of immobilised elements... 27 3.2.9 - Taking the use of marketed products or services into account... 27 3.2.10 - Taking the end-of-life emissions of marketed products into account... 27 3.2.11 - Steps covered by the emission factors for the companies module... 27 3.3 - Special implementation cases...27 3.3.1 - Activity spread over several sites, or separated into several steps... 27 3.3.2 - Sites abroad... 27 3.3.3 - Subsidiaries and holdings... 27 4 - Application to local authorities...27 4.1 - Special features of the method for local authorities...27 4.2 - Authority approach...27 4.2.1 - Entities concerned and general structure of the authority master spreadsheet... 27 4.2.2 - Description of the authority s services and activities... 27 4.2.2.1 - General administration... 27 4.2.2.2 - Education... 27 4.2.2.3 - Housing... 27 4.2.2.4 - Public transport... 27 4.2.2.5 - Water and sewage... 27 4.2.2.6 - Waste... 27 4.2.2.7 - Sports facilities... 27 4.2.2.8 - Cultural establishments... 27 4.2.2.9 - Establishments for health or social purposes... 27 4.2.2.10 - Green spaces... 27 4.2.2.11 - Highways... 27 4.2.2.12 - Situations not mentioned above... 27 4.2.2.13 - Risks of overlap and double accounting... 27 4.2.3 Description of the emission sources taken into account for each service... 27 4.2.3.1 - Energy... 27 2001-2010 - Methodology Guide - Version 6.1 4/116

4.2.3.2 - Emissions excluding energy... 27 4.2.3.3 - Incoming services and materials... 27 4.2.3.4 - Freight... 27 4.2.3.5 - Travel by people... 27 4.2.3.6 - Direct waste... 27 4.2.3.7 - Fixed assets... 27 4.2.3.8 Taking the use of products or services provided into account... 27 4.2.3.9 Taking the end-of-life emissions of services or products sold into account... 27 4.2.4 - Summary... 27 4.2.5 - Special implementation cases... 27 4.2.5.1 - Authorities administering a large number of sites... 27 4.2.5.2 - Pooled services... 27 4.2.5.3 - Authorities located outside Metropolitan France... 27 4.3 - Region module...27 4.3.1 - Entities concerned by the regional master spreadsheet... 27 4.3.2 - Description of the emission sources taken into account... 27 4.3.2.1 - Energy industries... 27 4.3.2.2 - Emissions from industrial processes... 27 4.3.2.3 - Tertiary... 27 4.3.2.4 - Residential... 27 4.3.2.5 - Agriculture and fishing... 27 4.3.2.6 - Freight... 27 4.3.2.7 - Transporting people... 27 4.3.2.8 - Construction and highways... 27 4.3.2.9 - Regional waste... 27 4.3.2.10 - Producing future waste... 27 4.3.2.11 - Food... 27 4.3.2.12 - Risks of overlap... 27 4.3.3 - Sources not taken into account... 27 4.3.5 - Special implementation cases for an authority located outside Metropolitan France... 27 5 - Error margin and reduction objectives...27 5.1 - Definition of uncertainty...27 5.2 - Handling the error margin in the spreadsheets...27 5.3 - Handling reduction objectives...27 5.3.1 - General Principle... 27 5.3.2 - Due dates and values... 27 5.3.3 - Handling in the spreadsheets... 27 5.3.4 - Precautions to take in defining reduction objectives... 27 6 - Extractions...27 6.1 - Historic extractions...27 6.1.1 - Internal extraction... 27 6.1.2 - Intermediate extraction... 27 6.1.3 - Global approach... 27 6.2 - Other extractions...27 6.2.1 - Directive extraction... 27 6.2.2 - Extractions according to ISO 14064 work... 27 6.2.2.1 - ISO scope 1 extraction... 27 6.2.2.2 - ISO scope 1+2 extraction... 27 6.2.2.3 - ISO scope 3 extraction... 27 7 - Bibliography...27 7.1 - General bibliography...27 7.1.1 - Documents published by IPCC... 27 7.1.2 - Documents published by CITEPA... 27 2001-2010 - Methodology Guide - Version 6.1 5/116

7.1.3 - Documents published by ADEME... 27 7.1.4 - Documents published by other French organisations... 27 7.2 Other documents on greenhouse gas emission accounting...27 7.2.1 - Guidelines for Company Reporting on Greenhouse Gas Emissions, Department of the Environment, Transport and the Regions (United Kingdom), 1999... 27 7.2.2 - The GHG Indicator: UNEP Guidelines for calculating greenhouse gas emissions for business and non-commercial organisations, United Nations, 2000... 27 7.2.3 - GHG Protocol... 27 7.2.4 - GEMIS... 27 7.2.5 - Cadastral approaches... 27 7.3 - For more information on the greenhouse phenomenon...27 APPENDIX I: Bilan Carbone and waste...27 1. Introduction...27 2. Main calculation conventions:...27 2.1 CO2 of biomass origin... 27 2.2 Sequestration... 27 2.3 Emissions linked to incoming materials... 27 2.4 Taking recovery operations into account... 27 General information... 27 Main recommendations for counting avoided emissions for energy recovery... 27 Main recommendations for counting avoided emissions for material recovery (recycling)... 27 3. Open methodological options...27 3.1 Calculation or measurements?... 27 3.2 Fixed or variable composition of the waste?... 27 3.3 Timeframe for storage assessments?... 27 4. Important element relating to the presentation and interpretation of the results...27 5. Use of the Bilan Carbone spreadsheets linked to the evaluation of waste management activities...27 6. Other waste and greenhouse effect operations...27 6.1 Record Report... 27 6.2 EPE Protocol... 27 APPENDIX II: Principle for discounting emissions...27 0 Warning...27 1 Context for using an accumulation over time...27 2 - Physical discounting of the emissions...27 3 - General accumulation formula...27 3.1 - Basic formulation... 27 3.2 - Case of emissions that must increase by m% each year... 27 3.3 - Case of constant emissions... 27 3.4 - Case of emissions decreasing in a simple way... 27 3.5 - General case... 27 3.6 Choosing the discount rate... 27 4 - Other questions posed...27 5 - Inclusion in the Bilan Carbone...27 APPENDIX III: EXAMPLES...27 1 - Some orders of magnitude...27 2 - Some concrete examples...27 2001-2010 - Methodology Guide - Version 6.1 6/116

2.1 - A company in the organic chemical industry... 27 2.2 - A finishing company in the construction industry... 27 2.3 - A DIY store... 27 2.4 - A bank... 27 2.5 - A regional prefecture... 27 2.6 - A General Council authority approach... 27 2.7 - A local authority Region module... 27 2001-2010 - Methodology Guide - Version 6.1 7/116

0 - Introduction 0.1 Warning The term Bilan Carbone can refer to one of the following: - The methodology developed by ADEME, which shows how to calculate the greenhouse gases (GHG) generated by activities producing goods or services, whether they are carried out by public or private companies or by authorities, as well as the emissions from all the activities in an area - One of the spreadsheets distributed by ADEME that enables the calculation to be performed, and the related user manuals - The result of the assessment applied to an activity or an area - The greenhouse gas emissions diagnosis produced by using this methodology. This document is solely intended to describe the basic principles that are used to quantify greenhouse gas (GHG) emissions by means of the spreadsheets that make up the Bilan Carbone methodology, or spreadsheets that may be derived from them. It supplements the Emission factors guide or Carbon Base guide, which describes the ways in which the emission factors used in the spreadsheets are obtained. These factors allow the data accessible in a company, a local authority or a region to be converted into greenhouse gas emissions in order to produce the Bilan Carbone for the activity. 0.2 The new features in version no. 6 Since the first version of the Bilan Carbone, designed for companies in particular, was released in 2004 there have been continuous improvements in both the form and content of this methodology. The previous version (no. 5 or V5) dates from January 2007 and was developed specifically for local authorities and territories. Version no. 6, or V6, integrates updates for the 3 modules developed in versions no. 4 and no. 5: - for industrial or tertiary companies - for local authorities with respect to their jurisdictions and related services - for territories. In addition to design and layout improvements, some of the emission factors have been updated in version 6. Whichever version is employed, the module used and its version number must be explicitly indicated in each communication of results. With regard to the methodology, the main new feature is the more detailed way in which the energy and material recovery (recycling) from waste processing is taken into account a specific description of the methodology is available in an appendix. Specifications are also provided on how to use the Bilan Carbone methodology for assessing a product s carbon content. 2001-2010 - Methodology Guide - Version 6.1 8/116

Finally, there is a methodological outline of the benefits from and the principles for discounting greenhouse gas emissions over time integrating their increased impact on the climate. 0.3 - Access to the methodology and the documents which comprise it The Bilan Carbone is a methodology that is intended to be completely transparent and open. As a result, this methodological guide and the emission factors guide or Carbon Base guide can be freely accessed on the site www.ademe.fr/bilan-carbone. In particular, the emission factors guide documents the origins and/or the calculation of all the emission factors used in all the master spreadsheets. The other elements that make up the methodology i.e. the spreadsheets and the related manuals are only accessible to people who have taken part in training sessions organised by ADEME. This choice is justified by the fact that, over and above reading downloadable documents, a minimum amount of overall knowledge and skills must be mastered in order to give effective advice concerning a progress approach to reduce greenhouse gas emissions. These consist of: basic elements about climate change and fossil fuels (the stakes must be known in order to encourage steps to be taken), the ability to correctly interpret the figures supplied by the spreadsheet or its utilities, the ability to provide overall organisation for an assessment programme and then to take steps. - 2001-2010 - Methodology Guide - Version 6.1 9/116

1.1 - Overall principle 1 - Objectives and general information about the methodology The Carbon Balance methodology described in this document enables users to evaluate, by scale, the greenhouse gas emissions resulting from all the necessary physical processes required for the existence of a human activity or organisation. By necessary physical process we mean that the entity would not exist in its present-day form, or in its present-day outline, if the physical process in question was not possible. One of the method s fundamental points consists of placing on an equal footing: greenhouse gas emissions which occur directly within the entity (which, in a certain manner, are its legal or immediate territorial responsibility) and emissions which occur outside the entity, but which are the offset for the processes necessary for the existence of the activity or the organisation in its present-day form. Therefore the emissions that are included in a GHG emissions assessment are not only those that the entity either is or feels responsible for, but are above all those that it is dependent on. In this second category, we will find, for example: emissions from the production of electricity for a semi-conductor manufacturer (because without electricity the manufacture of semi-conductors in its current form stops), emissions related to customers transport for a chain store or hypermarket installed on the outskirts of a town, emissions from a lorry chartered by a local authority as part of its school meals activity which, although it does not belong to the authority, is needed to transport food products (without this lorry the activity would no longer be organised in the same way), emissions that are necessary for a dairy to produce cheeses, since without cheeses it would be difficult for the dairies to exist in their current form, emissions from a petrol or diesel car sold by a manufacturer, since these emissions must take place in order for the manufacturer to be able sell these cars. One of the consequences of using the method to take account of direct and indirect emissions is indifference to the location of the greenhouse gas emissions analysed. This choice, which is dictated by the benefits from an overall assessment of the emissions that an activity is dependent on, is also consistent with physical considerations. 2001-2010 - Methodology Guide - Version 6.1 10/116

In effect, greenhouse gases stay in the atmosphere for a very long time once they have been emitted. It takes 10 years for methane to start to clear once it has been emitted, and about a century or more for other significant gases to do so (except ozone). Bearing in mind that about one year is needed for the air in the hemispheres to be mixed evenly, the reader will easily understand why the place from where these gases are emitted does not have an influence on its future greenhouse effect. This is why an inventory method should place all the emissions from the entity examined on an equal footing, without distinction of place, whenever their existence is the offset of a process of benefit to the entity in question. This also allows you to place physically identical resources - directly owned in one case and simply used in another (owned by a supplier, made available free of charge, etc) - on an equal footing. However, this simultaneous accounting of internal and external emissions leads inevitably to the question of responsibility: should we consider ourselves to be directly or indirectly responsible for all emissions taken into account in the Bilan Carbone? The degree of responsibility will be evaluated on a case-by-case basis, according to the emissions considered, the overall context and, also, our own criteria. Entering emissions in a Bilan Carbone simply means that the entity benefits from a process - based either at its own establishment or at another s premises that generates emissions. The use of this assessment must not therefore stop at determining the audited entity s degree of responsibility. 1.2 - Principle of the emission factor In the large majority of cases, it is not conceivable to directly measure greenhouse gas emissions resulting from a given action. In effect, if measuring the concentration of greenhouse gases in the air has become a common scientific practice, it is only in exceptional cases that emissions are the subject of direct measurements 1. The only way of estimating these emissions in this case is by obtaining them through calculations based on so-called activity data: number of lorries on the road and the distances covered, number of tons of steel purchased, number of ruminating cows, etc. All the official inventories in particular country-based inventories as part of the Kyoto Protocol are produced in this way. The Bilan Carbone methodology has been developed specifically to convert, in a reasonable lapse of time, this activity data into estimated emissions. The figures which enable observable data in the entity to be converted into greenhouse gas emissions, expressed in carbon equivalent 2, are called emission factors. The Bilan Carbone therefore starts from the physical flows that concern the entity or the project (flows of people, objects, energy, raw materials, etc), and matches to these the greenhouse gas emissions that they generate by means of the emission factors. Except in exceptional cases the monetary calculation unit is not used, even though this is the most widespread and the most easily accessible unit with regard to human activities. 1 Measuring the emissions accurately would entail fitting sensors on every house chimney, every car exhaust pipe, above every sewage treatment plant, putting every cow under a bell-jar, etc. 2 Carbon equivalent is the official measurement of greenhouse gas emissions. However, many companies use the CO 2 equivalent, giving values that are 3.67 times higher (to be precise, in a ratio of 44/12), a factor that corresponds to the ratio (molecular mass for CO 2 )/(atomic mass for carbon). The Bilan Carbone method s spreadsheet now provides the results in both units; however the emission factors are solely in carbon equivalent. Nevertheless, you should take care that you do not confuse CO 2 equivalent with CO 2 emissions only, a confusion that is unfortunately very common. 2001-2010 - Methodology Guide - Version 6.1 11/116

The construction of the prices for different products and services does not necessarily take their energy content or carbon content into account. In addition, because of the current low price of fossil fuels in our economic system (energy is a completely secondary accounting expense in most companies trading accounts) there is no direct link between the price of a product or service and the related greenhouse gas emissions. This is even truer for gases that do not result from using energy and for which there is no monetary counterpart in the accounting systems 3. Since most of the approach is based on average emission factors, the initial aim of this method is to provide orders of magnitude 4. However, this will not prevent practical conclusions from being drawn, because, often, several sources which are easy to estimate will be prominent in the emissions total 5. In all cases, uncertainty of this order will not, in any way, be an obstacle to the main purpose of the Bilan Carbone methodology, which, above all, is a stepping stone towards initiatives to reduce greenhouse gas emissions. In order to initiate and evaluate actions, it is often enough to have a hierarchy of emissions and an order of importance for them, with an evaluation of within 20% being sufficient. Succeeding with a subsequent reduction in emissions is naturally the final objective sought: if there is no progress without quantification (which enables the greenhouse gas emissions assessment), there is also no progress without action. Often, as for many other audit approaches, whether environmental or not, the precision of the results will be closely dependent on the time spent on the investigation and the nature of the processes evaluated. Therefore, it will be possible, in some cases, to make the Bilan Carbone methodology a restitution and decision-making tool with limited inaccuracy, namely less than 20%. Remember that the national inventory of greenhouse gas emissions drawn up as part of France s commitments in the Kyoto protocol is known with an uncertainty of this order. 1.3 Sector targets The organisation of the Bilan Carbone methodology s spreadsheets into three modules (company, local authority, region) means it can be used for any industrial activity, private or public, any tertiary activity, whatever its legal form (public authority, profit-making company, association, foundation, etc), any local authority, whatever its nature (commune, departement, conurbation, region, intercommunality), for its assets (its own activities) or activities taking place in its area any regional organisation (Regional Nature Park, Country, etc), similarly for its assets or the activities in its area. The methodology can also be applied to a project (choice of a new site or a new activity for a company, a planned housing development or industrial area for a local authority). It means that 3 Nothing whatsoever is invoiced by anybody when a ruminant emits methane or a field emits N 2O after fertilizer is applied (the fertilizer is, of course, invoiced, but the offset resulting in this case is solely the CO2 linked to its production). 4 Remember that an order of magnitude remains the same even if the result considered varies by more or less than 50%. 5 Prominent means that they are 5 to 10 times greater than the others, even more. 2001-2010 - Methodology Guide - Version 6.1 12/116

a given starting situation can be compared to a theoretical final situation in order to assess the additional or saved emissions that would result from switching from one to the other. Sector-based application guides are currently available on the site www.ademe.fr/bilancarbone; some others are currently being produced (Sewage treatment activities, Construction activities, etc) 1.4 Geographic application The methodological principles were initially drawn up for the Bilan Carbone s use in industrialised countries. It can be applied in other areas, subject to: - certain methodological choices being adjusted (e.g. the case of deforestation see 2.1.2). - the regional validity of the proposed emission factors being checked in an overall way, we can agree that the Bilan Carbone applies without too many changes to the countries of Western Europe and also to the French Overseas Departments and New Caledonia, for which an adjustment to the emission factors has been carried out. It should also be noted that version 6 integrated all the average electricity emission factors for the countries surveyed by the IEA 6, which is more than 140 countries. But, as an example of checking the regional validity of the Bilan Carbone, if we compare Europe and North America, and without claiming that this check is exhaustive, we will find the following in particular are different: the way in which electricity is produced (emissions per kwh are almost two times higher in the USA than the European average). As a result the average greenhouse gas content is different in Europe and North America for all the products or raw materials that need electricity for their manufacture or production. vehicles generally have larger engines in the United States than in Europe (an American passenger car uses much more fuel than a French car, and the same is true for lorries) and home-workplace distances are generally greater, so that emission factors relating to transport are different in the USA compared to the levels in Europe (which are relatively consistent in this respect), agricultural production and farming methods are also fairly different in Europe and the USA, different enough that the emission factors for agricultural products are not necessarily valid (for example, if cattle production is dominated by extensive livestock farming, the emission factor available in the methodology is no longer valid), etc. On the other hand some emission factors are applicable to Asian countries whose industrial structure and land-use planning are comparable to that observed in Europe. This will, for example, apply to Japan, South Korea, Taiwan, Singapore, etc. 6 IEA: International Energy Agency 2001-2010 - Methodology Guide - Version 6.1 13/116

In all scenarios, for a group of sites in which some are located abroad, the Bilan Carbone will require additional analysis to make sure that the standard emission factors are still applicable, or that, given the orders of magnitude, it is still pertinent to use the factors available even if they introduce a strong level of uncertainty. 1.5 Objectives of a Bilan Carbone assessment The first objective of the method, naturally, is to have a relatively exhaustive image of all the greenhouse gas emissions for an activity, an area, a development project, etc insofar as the entity that carries out this assessment has sufficiently detailed and exhaustive activity data to fill in the Bilan Carbone spreadsheets. The broader the scope of the assessment, the easier it will be to highlight all the sources on which it is possible to intervene in order to reduce their overall effect on climate change. Because the site of origin of emissions does not have an influence on their effect on the climate, succeeding in obtaining a reduction directly at one s own site, or provoking it elsewhere as a result of your own decision (example: deciding to change your haulage contractor in order to benefit from better-filled and fuel-saving lorries) will have the same effect on the system s overall emissions. Therefore, the field of application for the method which first comes to mind is that of an environmental management tool which participates in a voluntary approach without any real time constraint. But, it is possible to allude to much deeper changes with this approach. In effect, knowledge now available on the functioning of the climate machine has shown that worldwide emissions of fossil fuel CO 2 must be reduced by a factor of two to three by 2050 in order for gas to stop being accumulated in the atmosphere. A logic of sustainable development, in which all people have the right to the same emissions potential, implies a reduction by four or more in French emissions the reason for the factor 4 scenario announced by France. A truly sustainable activity, therefore, should be part of a world which would comply with this constraint and this, generally, poses questions which go well beyond simple emission reduction percentage points - the objective by 2050 is to reduce them by 75%. Furthermore, information available about hydrocarbon resources allows us to affirm that, if this halving of worldwide emissions of fossil CO 2 one day is not achieved voluntarily, it will be achieved involuntarily 7. It is obvious that such a conclusion leads to many questions about the present-day functioning of any organisation (company or local authority) and the Bilan Carbone is often a useful first step for planning for this restricted future. The strength of the method is to put its user in a quantitative approach to an exogenous and non-negotiable constraint which will apply in a global manner. Because of this, apart from the environmental benefit (future, of course) associated with all voluntary reductions in greenhouse gas emissions, the Bilan Carbone becomes a tool for reducing an activity s dependency on fossil energies 8, and, thus, makes it possible to decrease economic fragility in the event of an increase in the cost of hydrocarbons, a likelihood which will be difficult to ignore. 7 Involuntarily in this regard means not part of any wished-for programme and not some-one forces us to do it even though we don t want to. We can in fact imagine ways of having this constraint respected even though no-one really wishes to do so. 8 For the part of the emissions that is comprised of CO 2 2001-2010 - Methodology Guide - Version 6.1 14/116

1.6 Documents and spreadsheets associated with the method As already mentioned above, the term Bilan Carbone not only covers this methodological document, but also a series of spreadsheets - with the associated user manuals - enabling the method to be implemented, as well as an emission factors guide outlining the origin of these. The set of available documents actually includes: 1. the present methodological document which provides a detailed explanation of the method and what it takes into account, 2. the Emission factors guide or Carbon Base guide which, as its name suggests, contains the calculations or the origins of all the emission factors used in the Bilan Carbone spreadsheets, and also in other calculators 9 made available by ADEME, 3. for the company module: a. a master spreadsheet (also known as the site spreadsheet) adapted to an activity producing goods or services (Excel file: Bilan_Carbone_V6_EUK-v.xls ), which allows you to calculate emissions and manage reduction objectives, b. a utility spreadsheet allowing you to combine the emissions for several sites or entities (Excel file Multisites_V6_EUK-v.xls ), which also allows you to compare the emissions for several projects, c. an economic and forecasting utility spreadsheet allowing you to import the emissions output from the master spreadsheet or the multi-site utility to carry out economic simulations. The two simulations proposed consist of assessing the impact of a rise in hydrocarbon prices, or the impact of widescale taxation on emissions (Excel file: Eco_entreprises_V6_EUKv.xls ). 4. for the local authority module: a. a master spreadsheet identical to the company module spreadsheet a local authority can be considered to be a service activity which allows you to calculate emissions and manage reduction objectives (Excel file: Bilan_carbone_V6_EUK-v.xls ), b. a utility spreadsheet allowing you to combine the emissions for several of the authority s services (Excel file Multisites_V6_EUK-v.xls ), which also allows you to compare the emissions for several projects, c. an economic and forecasting utility spreadsheet allowing you to import the emissions output from the master spreadsheet or the multi-site utility to carry out economic simulations. The two simulations proposed consist of assessing the impact of a rise in hydrocarbon prices, or the impact of widescale taxation on emissions (Excel file: Eco_collectivité_V6_EUKv.xls ). This utility is adapted to local authority accounting rules. 5. for the regional module: a. a master spreadsheet which allows you to implement the methodology for a region, with identified geographical boundaries, by considering this 9 Clim Act transport Ecocalculator 2001-2010 - Methodology Guide - Version 6.1 15/116

region, with all the activities found in it, as a single site (Excel file: BC_territoire_V6_EUK-v.xls ), b. an economic and forecasting utility spreadsheet allowing you to import the emissions output from the master spreadsheet to carry out economic simulations. The two simulations proposed consist of assessing the impact of a rise in hydrocarbon prices, or the impact of wide-scale taxation on emissions (Excel file: Eco_territoire_V6_EUK-v.xls ), c. a utility spreadsheet allowing you to compare activity scenarios for a single region (Excel file Scenario_territoire_V6_EUK-v.xls ), d. a utility spreadsheet allowing you to enter the emissions for a region s industrial sites based on national statistical data (Excel file Industrie_territoire_V6_EUK-v.xls ). 6. A utility spreadsheet which in order to fill in the freight per route for any of the Bilan Carbone master spreadsheets allows you to reconstruct the tonnes.km for each type of road vehicle when the user only has highly consolidated data (Excel file: fret_route_tkm_v6_euk-v.xls ), 7. A utility spreadsheet which allows you to assess halocarbon leaks from refrigeration facilities when the user only has summary data, and which therefore allows you to fill in the halocarbon emissions part of the Bilan Carbone master spreadsheets (Excel file: Clim_froid_V6_EUK-v.xls ), Each of these master and utility spreadsheets has an associated user manual. The consistency of the spreadsheets structure with regard to the final objective of reducing emissions All the master spreadsheets developed obey a number of common rules: the use of activity data and emission factors (see 1.2), to enable investigation within a reasonable time-scale, the fact that each consolidation source of greenhouse gas emissions should mean something to at least one operational manager within the entity concerned, who should be able to compare it to a physical process or flow, easy to identify in operations and on which he or she has visibility or influence, even if from a distance. This second feature is essential if you are looking to encourage action, which is the stated goal of the Bilan Carbone. In effect, if the information gathered does not mean anything to anybody in the organisation chart, the likelihood of somebody seizing the problem and acting to lower the corresponding emission is almost non-existent. However, this imperative leads us to one of the classic difficulties involved in implementing the Bilan Carbone. In effect, it is not because physical flows are easy to identify that they have an individual offset in accounting or management control. Because of this, it is often necessary for data to be centralised manually, something which is not usually done. Furthermore, the aggregate items in the Bilan Carbone method are not distinguished according to the ownership of the resources utilised. For example, for a company we will seek to assess the emissions related to freight, without, in an initial approach, worrying about whether the lorry belongs to the company or not. This way of working allows the figures obtained for physically comparable entities to be made comparable, without being hindered by the fact that one entity has its own resources while the corresponding service is sub-contracted out by 2001-2010 - Methodology Guide - Version 6.1 16/116

another. Transportation provides a standard example of this point in the case of companies, and concessions are an illustration of it in the case of local authorities. It is only in presenting the results by making extractions that ownership becomes a potential segmentation criterion, but in practice it turns out that the resources for which the entity is the direct owner are not necessarily those on which it is easiest to take action. 1.7 Compatibility with other assessment exercises and standardisation processes There are other initiatives for structuring GHG emission assessment exercises, which extend from defining the broad outlines of the assessment and the report framework for the emissions through to providing an associated calculation spreadsheet for certain processes. The best known are: - the GHG Protocol 10 - an initiative from the United States- - the ISO 14064 standard, largely inspired by the above exercise. In addition, new initiatives with a product carbon footprint approach are in progress, notably: - PAS 2050 an initiative from the United Kingdom- - the future standard ISO 14 067, which is being drawn up The Bilan Carbone proposes an approach that is compatible with both the ISO 14064 standard and the GHG Protocol, and will integrate changes that may be dictated by the standards exercises. 10 A private initiative relating to companies; its work largely inspired the preparation of standard ISO 14064 - www.ghgprotocol.org 2001-2010 - Methodology Guide - Version 6.1 17/116

2 Accounting principles and limitations in the Bilan Carbone 2.1 - Gases retained and measurement units 2.1.1 - Greenhouse gases retained 2.1.1.1 General information concerning all assessment exercises At present, all the standardised or official methods of creating an inventory of greenhouse gas emissions share several features: - only gases emitted directly 11 are included, not those which appear in the atmosphere following chemical or photochemical reactions as a result of precursor emissions (the case of tropospheric ozone) 12 ; - only gases emitted into the troposphere 13 are included, not those emitted into the stratosphere (the case of some of the emissions from planes when in flight) 14. The greenhouse gases which correspond to this definition are mainly those considered in the framework of the Kyoto Protocol key international initiative for the reduction of greenhouse gases: carbonic gas (CO 2 ) from fossil fuels, which remains in the atmosphere for about a century, methane (CH 4 ), which remains in the atmosphere for about a decade, nitrous oxide (N 2 O), which remains in the atmosphere for about a century, hydrofluorocarbons (C n H m F p ), which remain in the atmosphere for anything from a few weeks to a few centuries, perfluorocarbons (C n F 2n+2 ), which remain in the atmosphere for anything from several centuries to tens of thousands of centuries, sulphur hexafluoride (SF 6 ), which remains in the atmosphere for several thousand years. There are other well known greenhouse gases, in particular water vapour and CFC (Carbofluorocarbons) which meet two of the afore-mentioned characteristics but which are not included in the Kyoto Protocol for one of the two following reasons: 1 - they are already governed by another international agreement (case of CFCs) because their harmful effect is not limited to an increase in the greenhouse effect, 11 Not to be confused with emissions that are known as direct or internal since they occur within the scope of the entity or region assessed 12 This makes it difficult, even impossible, to allocate a specific surplus to the behaviour of a specific actor. 13 The troposphere is the lowest layer of the atmosphere. 14 By convention, the radiative forcing of the greenhouse gases stops at the tropopause (the boundary between the troposphere and the stratosphere). A greenhouse gas emitted in the stratosphere is therefore excluded from the standard inventories. 2001-2010 - Methodology Guide - Version 6.1 18/116

2 - their emissions do not have a direct effect on concentration in the atmosphere (case of water vapour emitted by humans into the troposphere). 2.1.1.2 - Special features of the Bilan Carbone methodology As the Bilan Carbone is intended above all to mirror the physical reality, it takes account of the largest range of GHGs possible whenever the level of scientific knowledge permits it. This means that, in addition to the standard assessed emissions, the Bilan Carbone includes the possibility of quantifying GHGs that are governed by other international treaties (e.g. CFCs) water vapour from planes emitted into the stratosphere (but not water vapour emitted by humans into the troposphere, which has no discernable effect on the global climate). If the user wants to limit the result of his or her assessment only to emissions due to gases covered by the Kyoto protocol, the Bilan Carbone includes an extraction feature to do this. 2.1.2 - CO 2 of organic origin For all the greenhouse gas emissions taken into account, it is of course implicitly assumed that there will no sinks 15 elsewhere that will offset the emissions. What is actually measured is not so much an emission as the contribution to the increased atmospheric concentration of the gas in question. Two scenarios are possible for CO 2 of organic origin emitted by people: either it is part of a global change in ecosystems that does not contribute to an increase in the atmospheric concentration of CO2, because people s increased emissions are offset by people with an expanded sink (typical case of forest management) or it is part of an emissions system not offset by sinks (case of deforestation). On the other hand, there is no difference in the way the atmosphere treats the CO 2 of organic origin emitted in the first case and the CO 2 of organic origin emitted in the second case. Consequently, certain inventory formats take account of the CO 2 of organic origin regardless of the amount of emissions and the source (and put the sinks in another category), others do not and others only take account of the upward flow (emissions) which are not offset by a downward flow (capture by photosynthesis) at least of equal importance. As the Bilan Carbone was initially and mainly designed for industrialised countries, where there is little deforestation, it does not take into account organic CO 2 emissions from biomass combustion (wood, waste, etc). In effect, generally, these are more than offset by the annual increase in forest coverage. This is particularly the case in France where the increase in forest coverage corresponds to a downward flow that is very much greater than the upward flow emitted (slash-and-burn farming, wood heating, etc). This explains why, in the case of an organic waste treatment facility which produces methane, if this methane is released directly into the air it must be taken into account as part of the Bilan 15 By sinks we mean any phenomenon that contributes to CO2 being stored in a lasting way (at least a century), and as a result to reducing its atmospheric concentration. 2001-2010 - Methodology Guide - Version 6.1 19/116

Carbone, but if it is burned beforehand and transformed into CO 2 (consequently, of organic origin), the emissions then become zero (except for any methane leaks). Note: if the Bilan Carbone method is used in countries where deforestation is an issue, this methodological point must be reviewed with reference to the assessment elements proposed by the IPCC 16. 2.1.3 - Sources selected In addition to the types of greenhouse gases that are or are not taken into account, some inventories exclude certain sources depending on the context: for example, emissions from methods of transport (air or sea) located in international space, which are not included in the national inventories supplied to the United Nations Framework Convention on Climate Change secretariat. In an approach assigning emissions by country, it is in fact very difficult to assign this type of emissions (who do the emissions belong to in the case of a Panamanian ship that sails from Marseilles to Baltimore transporting textiles manufactured in Italy?), which appear under the term international bunkers in the inventories carried out in the context of the Kyoto protocol. As the Bilan Carbone does not take the location of the emissions into account, there will be no reason for a strict geographic exclusion and therefore all the emissions that are necessary for an activity will be taken into account, regardless of where the emissions occurred. It is up to every user of the method to decide to what level the necessary investigations will be carried out in order to have a sufficient vision of the emissions related to an activity, depending on circumstances. It should also be noted that the Bilan Carbone does not make an activity responsible or guilty for generating specific emissions. It simply makes it possible to quantify the emissions that are necessary for an activity to exist in its current form. 2.1.4 - Notion of GWP Global Warming Power The effect of releasing one kilo of greenhouse gas into the atmosphere is not the same for different gases. Each greenhouse gas has a global warming power or GWP, which quantifies its impact on the climate after a certain period of time. In scientific terms, the GWP (x) is the relationship between, on the one hand, combined radiative forcing over a period of X years from one kg of the gas in question and, on the other hand, the same mass of CO 2. The higher this GWPx is, the more important the additional greenhouse effect resulting from the release of one kilo of this gas into the atmosphere will be, in comparison to CO 2, after X years. Since, by convention, GWP (x) always compares greenhouse gases to CO 2, the GWP x of CO2 is always 1, regardless of the value of X. The present method is based on GWP 100, also known as 100-year GWP, which appeared in the 2007 report by the IPCC 17. The most common name for 100-year GWP is CO 2 equivalent, because this unit designates, for one kg of greenhouse gas, the number of kg of CO 2 produced by the same climate disturbance after a century 18. For greenhouse gases other than CO 2, different editions of the IPCC reports have given slightly differently values for GWP 16 IPCC is the acronym of the Intergovernmental Panel on Climate Change. The French abbreviation is GIEC, for Groupe Intergouvernemental sur l'evolution du Climat. 17 This can be consulted in full on-line on the IPCC site (www.ipcc.ch). 18 The GWP is therefore partially based on assumptions, concerning in particular future changes in the cleaning of the gas in question from the atmosphere, and future changes in its radiative forcing. 2001-2010 - Methodology Guide - Version 6.1 20/116

and you therefore need to pay close attention to this, since some recent inventories have still been produced with values from the 1995 report. Apart from the CO 2 equivalent or GWP, the other common measurement unit for greenhouse gases is the carbon equivalent. For carbonic gas, the carbon equivalent indicates simply the concentration of carbon in the CO 2 compound. When isotopes C 13 and C 14 are not included, carbon has an atomic mass of 12. And, when the minor isotopes O 18 and O 17 are not included, oxygen has an atomic mass of 16. This means that CO 2 therefore has an atomic mass of 12 + 16 x 2 = 44. For CO 2, the concentration of carbon alone, therefore, will be 12/44 th of the total, or 0.274 of the total. Thus, one kg of CO 2 is worth 0.274 kg of carbon equivalent. For other gases, the carbon equivalent is given by the formula: Carbon equivalent of gas = concentration of gas (in kg) x 100-year GWP x 0.274 Inversely, we will switch from carbon equivalent to CO 2 equivalent by multiplying by 44/12 or 3.67. Just like CO 2 equivalent, carbon equivalent is measured in kg, and its multiples and submultiples. The term carbon equivalent is commonly abbreviated to CE. Therefore, the symbol TCE indicates an equivalent ton of carbon. Take note of a possible source of confusion: in documents, carbon equivalent is often shortened to carbon (or C), which creates a problem because it is not always obvious whether what is targeted in this case is just CO 2, for which only the weight of carbon is calculated, or all greenhouse gases, measured in carbon equivalent. Although its definition appears to be complicated, carbon equivalent does have a major advantage for monitoring coherence: for hydrocarbon combustion, there is as much carbon equivalent emitted in the form of CO 2 after combustion as there was carbon (in weight) in the initial compound. This one-for-one match means orders of magnitude can be calculated in a very simple manner and, in all cases, more easily than with a factor of 3.67. 2.1.5 - Units used in the spreadsheets The spreadsheets associated with the present method systematically use carbon equivalent for the emission factors and the results of intermediate calculations. On the other hand, the totals by line, by source and the overall summaries are systematically available in carbon equivalent and CO 2 equivalent, each indicated with different colour for the characters. This twin display and the different colours are intended to limit as far as possible all confusion about the meaning of the numbers. 2.2 - Limitations concerning emission factors and certain specific uses As indicated in the introduction, the Bilan Carbone method aims to calculate greenhouse gas emissions - direct and indirect for an activity based on average values known as emission factors. 2001-2010 - Methodology Guide - Version 6.1 21/116

The advantages of this manner of proceeding are, of course, speed and a certain ease of use, but, of course, there are inconveniences, or, more exactly, limitations, which are discussed below. 2.2.1 - Temporal validity of emission factors The emission factors used in the Bilan Carbone method s spreadsheet, whether obtained from published documents or specially developed for this method, are often a product of approximations. Sometimes averages are used in the place of actual values, which may vary within a range of one to ten 19. Furthermore, these emission factors very often reflect a state of the art for technical objects, or even current practices (for example, those which integrate home-work distance): therefore, they are designed to change constantly, a little like prices, which also change constantly according to various factors specific to the production process. Emission factors are also dependent on one another, with effects that are not necessarily perceptible at first sight. For example, if French electricity starts to be produced mainly by gas power stations instead of nuclear and hydraulic power stations, the carbon content of the electricity produced by these stations will change from 6 to 300 ± 100 g of CO 2 per kwh 20 ). Understanding the fact that such a change will alter the emission factor for electricity is easy, but what is not so easy is realising that this will have an effect on the emission factors for all the products or services which include electricity in their production: foundry and metalwork, whether iron or not, manufacturing of semi-conductors, all tertiary services related to industry, and, thus, indirectly, almost all manufactured products made in France. As a result, some emission factors retained in the framework of this method may change significantly over time. In consequence, we invite you to read, at least once, the Emission factors guide or Carbon Base guide, which describes the ways in which these emission factors have been obtained. This will help you to understand whether, in the future, they are likely to vary greatly or not. For its part, ADEME will regularly update the emission factors. 2.2.2 - Taking account of recycling in emission factors Recycling generally allows something to be saved in manufacturing processes. This could be raw materials, energy or, very often, both. When there are energy savings, greenhouse gas emissions are also decreased, in variable proportions. As a result, the term recycling is sometimes used when the term recovery should really be used; that is the case, for example, when waste is used to produce heat or electricity. In theory, this also allows savings in emissions with respect to a waste management system in which byproducts are not recovered. In order to take account of the savings generated by recycling, however you use this term, there is theoretically a choice between two methods. 19 For example the greenhouse gas content of aluminium can vary within a range of one to five depending on where it was produced and the proportion of recycled material, of steel from one to two, of car transport from one to five depending on conditions and the type of car, etc. 20 In life cycle analysis; source EDF. 2001-2010 - Methodology Guide - Version 6.1 22/116

2.2.2.1 Avoided impacts method The first method is known as the avoided impacts method. By means of this the savings produced by recycling or recovery which is not recycling in the primary meaning of the term in a given process are quantified. For example, if waste is the object of energy recovery, the electricity produced by the incinerator allows mains electricity savings. The greenhouse gases that would have been generated in a standard electricity production process 21 are therefore subtracted from the greenhouse gases emitted during the incineration process. Another example is recycling scrap-iron to make steel, which allows you to save: energy: melting down scrap-iron takes less energy than producing pig-iron from ore and purifying it, raw materials: you avoid using ore and coke. With regard to the specific case of greenhouse gas emissions, you save: firstly, the emissions linked to extracting and transporting the ore, secondly, the emissions linked to producing pig-iron in the blast furnace. In these situations, as recycling helps to avoid part of the impact of producing steel from ore, you are credited with this saving when you recycle. In other terms, with this approach, it is when a company (or administration) disposes of its waste that it will be credited with a larger or smaller amount of greenhouse gas emissions, depending on whether it decides to dispose of the waste normally or entrust it to an entity that will recycle it. 2.2.2.2 - Stocks method The second method takes recycling into account when a material is produced, by assigning a greenhouse gas content to this material that faithfully reflects the energy used to produce the material. As a result, when the components consist of recycled material rather than raw materials, less energy will generally be used and therefore the greenhouse gas content of the new material produced will be lower. This way of working, which consists of reducing the greenhouse gas content when a material is partially produced from recycled material, is known as the stocks method. It can only be applied to what are known as closed-loop recycling processes, which refers to processes in which the recycled waste is used to produce exactly the same material (e.g. glass is recycled to produce glass, steel to produce steel, etc). 22 When a product contains recycled material, the greenhouse gases relating to the initial production of the used and recycled material are not counted. That is equivalent to considering this used material as coming from a secondary stock of raw material. In this way, only the greenhouse gases associated with the production of the new portion and the regeneration of the used material are counted. 21 For the portion produced using coal, gas or petrol, of course. 22 The other type of recycling is the open-loop process, in which recycling is used to manufacture something other than the material making up the waste. Plastic bottles generally come into this category: they are not used to make plastic that can be used to produce bottles. 2001-2010 - Methodology Guide - Version 6.1 23/116

With this method, waste sent to the recycling sector is counted not as waste but as a secondary raw material supply chain. The only greenhouse gases that are taken in account are those relating to the recycled portion s transportation to this secondary raw material stock, and possibly to this secondary material s preparation processes (shredding, washing, etc) before it is added to the stock. Finally, this recycling is evened out over the entire production; in this way the carbon content of the material produced takes into account the fact that, on average, the production does not just use ores or raw materials, it also uses recycled materials. By choosing to produce part of the material from recycled waste, you generally end up with a carbon content per unit of weight that is lower than the content you would have obtained if only ores or raw materials were used 23, and this is how the positive impact of recycling is shown. The advantage of this method is that it is based on a statistical approach: you just need to know how many tons of material are recycled in the total production for a year, and it is assumed that the average proportion can be applied to each unit of production taken individually, whereas the avoided impacts method requires you to know exactly what the entity producing waste does with it. 2.2.2.3 Methodological choice in the Bilan Carbone When a material can be recycled in a closed loop process, the stocks method (see 2.2.2.2) will be applied to take account of the recycling. This choice, which is necessarily in part conventional, is however intended to better reflect the physical reality. In effect, it is when materials made from recycled material are bought that the emissions are really avoided: recycling a material that you dispose of is the promise of savings in the future, when this material is used to manufacture something new, but these are not savings that have already been realised, as with the case of discrimination made at purchase time. Two inconveniences related to this methodological convention nevertheless have to be mentioned: - No difference in quantification is possible for certain materials (plastics, metals, glass, etc) sent either to a recycling system or to a landfill centre. - Assigning the benefits from recycling only to the purchaser does not necessarily correspond in practice to the market approach governed by the law of offer and demand. In some cases the constraint is the offer, and therefore the benefits should rather be assigned to the entity that supplied this material (the entity that sent it for recycling). To overcome these inconveniences, and at the same time retain the choice of initial method, avoided emissions related to the waste sent for recycling are calculated. To avoid double accounting, this avoided emissions calculation is only performed on the new portion incorporated upstream. The fundamental principle consists of considering that the waste sent for recycling enables a substitution in the production of materials, in the same proportion of new and recycled materials as that found in the materials entering the entity. 23 There can be some exceptions to this, when transporting the recycled waste and the preparation processes use more fossil fuel than the fuel you can save by recycling. 2001-2010 - Methodology Guide - Version 6.1 24/116

Avoided Emissions EF = EFr EFin = EFr (%n*efn + %r*efr) = %n*(efr- EFn) Where: EFin = emission factor for the incoming material EFn = emission factor for 100% new material EFr = emission factor for the recycling procedure = production emission factor for 100% recycled material %n = proportion of new material in the incoming material %r = proportion of recycled material in the incoming material It should be noted that the value of these avoided emissions is not deducted from the carbon emissions profile of the entity carrying out its assessment. This amount is accounted for separately, just like all the avoided emissions assessed (e.g. avoided emissions for the energy recovery for processing waste or carbon sinks 2.3.1.1). For the materials reused to produce something other than the initial material (which is called open-loop recycling, see 2.2.2.1), the approach favoured will be the avoided impact method (for example, recovery, via the production of electricity or heat, from the incineration of combustible waste, or fertilizers avoided by spreading sludge from a sewage treatment plant). It should be remembered that an avoided impact is, of necessity, assessed in a conventional way, since it always implies deciding what would have occurred if things had happened differently, and experience shows that more than one plausible scenario can always be put forward for the same situation. 2.2.3 - Emission factors for semi-finished products and services When conducting a Bilan Carbone, whether for a company or a local authority, the direct consumption of energy is generally well known, or at least is easy to know if you give yourselves the means to do so. Also, some emissions occurring outside the entity being audited are relatively easy to estimate, because they either come from electricity or steam bought from producers, the emissions of which are increasingly well documented, or from transport, which has been accorded special attention in this method. On the other hand, most of the products or services bought are not very well or not at all documented at present, because the entities which provide them have been subject, at best, to a very macroscopic approach. Thus, for the greenhouse gas content related to buying a photocopier, a desk, a batch of footballs, or replacing a gear-box, the method would often only provide a rough even very rough estimate by analysing the basic materials making up the product, but this does not give a reference value that takes all the manufacturing steps into account. In order for a finished product to have a precise greenhouse gas content, its supplier would need to have undertaken its own life cycle analysis, possibly with an allocation rule if it manufactures several different products, something which is not yet the case for most of them. 2001-2010 - Methodology Guide - Version 6.1 25/116

However, it is possible to carry out a more detailed assessment of a semi-finished product s carbon content by using ADEME s Product Balance tool 24. This eco-design awareness tool allows you to assess the environmental impacts of products including the impact with respect to the greenhouse effect. The product s carbon or CO2 content is therefore assessed for its entire life cycle. You just need to limit this to the carbon assessment for the production phase in order to have a retrievable estimated emissions factor for the Bilan Carbone watch out for conversions between carbon and CO2 units. If the Product Balance is not complete enough, we suggest that you ask you suppliers to take an interest in their greenhouse gas emissions, or even make the production of a GHG emissions assessment a condition of your purchases: as the number of entities conducting greenhouse gas accounting increases, the easier it will be for others to do the same, and, above all, the easier it will be for companies and local authorities to make the right decisions. The same will apply in action: as the number of contractors undertaking major reduction programmes increases, then more suppliers will do the same. 2.2.4 - Usage emissions of products sold Note: this chapter only concerns the companies module. The limitations of such an exercise for local authorities are dealt with in 2.3.3. 2.2.4.1 General case A large proportion of the products or services sold to the end consumers will generate emissions as part of their use. This could be the electricity consumed by household appliances, the fuel consumed by vehicles, the heating of houses for a real-estate operator, but also, in a certain manner, a skiing trip s emissions for a pair of skis (it is difficult to sell skis if the emissions related to travelling to the ski slopes and heating the apartments are not possible), emissions from cooking a kilo of vegetables before eating them, or the manufacturing emissions for the products marketed in a magazine advertisement. The master spreadsheet of the methodology s companies module only provides a fairly summary sheet for taking these emissions into account, without being able to enter activity data directly. For example, the spreadsheet doesn t provide a box where you can simply enter the number of refrigerators or cars sold, with a spreadsheet that would automatically calculate the emissions related to using the products sold. Any company that sells products or services must therefore perform intermediate calculations allowing it to assess the related emissions, according to the instructions described in 3.2.10. 24 available on www.ademe.fr/bilan-produit. 2001-2010 - Methodology Guide - Version 6.1 26/116

2.2.4.2 Special case of emissions occurring over several decades. In certain cases, the question of discounting usage emissions over time can be considered, either for physical reasons increased air-conditioning periods because of climate change or for economic reasons changes in the cost of climate damages related to the emission of one tonne of carbon. The 1 st case can be handled in the intermediate calculations by indicating the changes in the operational assumptions. The principle in the 2 nd case is more adapted to infrastructure-type projects (roads, buildings, etc) in which the emissions related to their operation are counted in tens of years. This principle is explained in detail in appendix II, and briefly presented below. The principle described in the appendix is based on a report by the French Strategic Analysis Council ( Conseil d Analyse Stratégique Français ) and the Stern report. It shows that a quantity of GHG emitted later will have more impact on the climate than the same quantity emitted now. The impact of the GHG emissions can therefore be considered to increase over time. The options for quantifying the (financial) impact of this damage are either discounting the physical emissions (i.e. assign the increase in damages) and multiplying them by a fixed cost of their impact, or discounting the cost of the damages and multiplying it by the emission amounts. Appendix II discusses both options and provides an example of modelling to quantify this increasing impact on the environment. The Bilan Carbone does not make any assumption related to this principle and does not offer any related computer application. However, ADEME considers it useful to describe it with the aim of making as large an audience as possible aware of the discussions underway. For this type of project, putting the issue into perspective would appear essential in the long run to be researched by the actors concerned. It also reinforces in a general way the need to reduce the emissions as early as possible. 2.2.5 - End-of-life emissions of products sold Note: this chapter only concerns the companies module. The limitations of such an exercise for local authorities are dealt with in 2.3.3. Every product and service sold generates emissions related to its end-of-life processing: when scrapped, a refrigerator will let its coolant gas escape; thrown into a landfill, a colouring book will ferment, etc. The master spreadsheet of the company module only provides a fairly summary sheet for taking these emissions into account, without being able to enter activity data directly (for example, there is no emission factor per refrigerator thrown away or per old pair of shoes thrown away). Any Bilan Carbone for a company that sells products that will end up being thrown away must therefore perform intermediate calculations allowing it to assess the related emissions, according to the instructions described in 3.2.11. 2.3 Deliberately excluded sources 2.3.1 - Emission credits 2001-2010 - Methodology Guide - Version 6.1 27/116

2.3.1.1 - Carbon sinks Carbon sinks are procedures through which we can theoretically contribute to an accelerated cleaning of the carbonic gas in the atmosphere. This chapter does not concern sequestration, covered in.2.3.1.3. In practice, this often amounts to a process enabling an accelerated increase in the vegetable biomass, land or marine, which, by photosynthesis, removes CO 2 from the atmosphere that is not replaced later. The following two processes are mentioned the most often, bearing in mind that only the first currently has an operational scope: planting any biomass where the stored carbon is not returned into the atmosphere later, fertilising the ocean surface in order to encourage the growth of phytoplankton, in so far as the sequestered carbon is then sent into the ocean deeps after the living organism dies (which means that there is no decomposition with CO 2 being emitted). There are other procedures that can also be envisaged, especially a change in farming practices (for surfaces covered by annual crops, such as cereals) in order to increase the carbon content of the farmed soil (this carbon being obtained from the atmosphere). An entity that implements or finances the implementation of such a procedure for the accelerated uptake of CO 2 from the atmosphere could, in theory, look to obtain a benefit from it, since it would contribute to a reduction in the anthropogenic greenhouse effect. In practice, it is often very difficult to assess the precise benefit where there is a benefit from replanting, even by order of magnitude: in order to estimate the sequestered carbon, you need to know what the forest is replacing, what type of ground is being reforested, what was done with the biomass that was there before, what climate zone is concerned, what type of tree is planted, etc, - there is great uncertainty about whether the forests will continue to be sinks for more than a few decades in a changed climate25: if the planted trees must shortly die back due to climate change, then it becomes debatable whether emission credits have substance with respect to trees planted today, finally, with respect to changes in farming practices, storage takes place over several years, even decades, and it is therefore too early to have orders of magnitude applicable in all situations. Furthermore, here as well future climate conditions may lead to the accelerated de-storage of what had been sequestered for a time. Carbon sinks taken into account in the Bilan Carbone Therefore the only photosynthesis-linked carbon sink that we take into account in this method is construction timber from sustainably-managed forests. In such a forest, the amount of timber felled annually remains less than the increase in uncut biomass that took place during the year. If this condition is not respected, then a portion of the cut wood generates (or leads to) deforestation. In addition, construction timber refers to wood used to manufacture goods whose length of life is at least a century (timber framework, long-lasting furniture, etc). 25 The carbon actually stored in the forests in growth may be de-stored in a changed climate that might be less favourable to the ecosystems put in place; you can refer to the documentary sources proposed at the end of this document for more details. 2001-2010 - Methodology Guide - Version 6.1 28/116

As a precaution, the first condition excludes all tropical woods, unless good management is guaranteed, and the second condition also excludes wood used to make ordinary furniture (for example made from fibreboard panels, or even from solid wood if the furniture s length of life is only tens of years). If an entity conducting its Bilan Carbone possesses a forest, the increase in uncut wood intended to supply construction timber can be counted in the year of increase. However this will not be acceptable if the forest increase will end up being used to supply wood-pulp or fire-wood. NB: for so-called certified wood, it is important to check that the certification conditions mean that you can be sure that there was no deforestation, insofar as the labels granted unilaterally by NGOs are not standardised. It should be noted that the value of this carbon sink is not deducted from the carbon emissions profile of the entity that is performing its assessment. This amount is accounted for separately, just like all the avoided emissions assessed (e.g. avoided emissions for the recovery of matter or energy from processing waste). Finally, it should be remembered that the use of wood-energy does not constitute a carbon sink. On the other hand, it makes it possible to have energy with a very low greenhouse gas content, provided the wood comes from properly managed forests (which is the case throughout Europe). 2.3.1.2 - Offsetting By offsetting mechanism we mean the fact of financing a project to reduce emissions other than in the entity concerned, with the idea of deducting its own emissions from the emissions saved elsewhere. While, in principle, the approach is included, these offsetting mechanisms are not taken into account in the methodology, since the Bilan Carbone is based on physical and chemical processes that have actually occurred, or are going to occur with a high degree of probability. The assessment of raw emissions is an exercise that leaves little room for the user to be arbitrary: two people using the methodology and examining the same situation should arrive at almost identical results. In contrast, assessing the benefit in an offsetting mechanism inevitably requires a reference hypothetical situation being taken into account ( what would have occurred in the absence of the measure, which is used to assess the difference from what is actually observed), which is naturally left to the user s discretion. It is clearly possible to do this using results obtained with the Bilan Carbone methodology, but it will be up to the user to select a reference scenario, outside the field of application for the method. In the same spirit except where matter or energy is recovered as a result of processing waste (see 2.2.3) when an entity proposes or sells products or services that may, in certain conditions, enable savings to be made (for example, bicycles, replacing the car, or bus services, replacing the same car, or solar water heaters, etc), it must be the entity that is responsible for assessing the real effect of the increase in its sales on global emissions. The method does not offer an approach for taking account of reductions generated by others as a consequence of its activity. 2.3.1.3 - Sequestration 2001-2010 - Methodology Guide - Version 6.1 29/116

Sequestration refers to capturing and then storing, in a place that does not communicate with the atmosphere 26, the CO 2 resulting from the use of the energy. This technique can be implemented for concentrated CO 2 sources, such as coal-, gas- or petrol-fired power stations, steel works, certain chemical industries, etc. It is not applicable to small sources, such as central heating boilers, transport, and small industry. If this technique is implemented within a factory or a flame power station, this will lead to fewer emissions in the air, and as a consequence a reduced greenhouse gas content for the product manufactured by the factory (thus the electricity, or the steel, the chemical product, etc). Insofar as the Bilan Carbone is based on what is actually emitted in the air, if an entity captures and sequesters all or part of its CO 2 emissions, it will be entitled to take into account only the fraction that is not sequestered. At present, however, this concerns only a few rare cases world-wide, and sequestration is therefore not the subject of a specific module in this version of the method. 2.3.2 - Waste or effluent management activity: incoming material When an entity s main activity is solid or liquid waste management (whether this entity is a company or an intercommunal syndicate), the production of future waste is excluded from the sources taken into account. In effect, taking incoming flows into account assumes that the entity benefits from processes that occurred elsewhere and led to greenhouse gas emissions. That does not pose a problem of interpretation for a clothes manufacturer, where the company can reasonably be considered a beneficiary of the production of synthetic fibres, or for a local authority, which can reasonably be considered a beneficiary of the production of food that will be served to students in a canteen that it runs. But this can pose greater problems of interpretation concerning the allocation, in a waste facility operator s Bilan Carbone, of the emissions related to the production of the waste that it handles, even if it can be argued that without the production of waste that there would be no waste management activity! In this specific case, it will also often be pertinent to take the emissions avoided by energy recovery into account, insofar as the reference scenario does not pose a problem because the result from incinerating or recovering biogas does not unbalance the network and therefore replaces, on a kwh-for-kwh basis, another means of production. These considerations apply equally well to the operators of solid household waste facilities, sewage treatment plants, or hazardous waste facilities. 2.3.3 Usage or end-of-life emissions for a service provided by a local authority Taking into account all the emissions related to an activity, the companies module of the Bilan Carbone methodology includes, quite logically, the emissions arising from the use and end of life of products after they have been sold or distributed by a company. It was therefore tempting to do the same in the case of a local authority, since certain services provided by the authority subsequently give rise to emissions, and it would be completely pertinent, in the spirit of the method, to give the contractor a view of this: 26 The places currently studied are subterranean reservoirs (salt mines, saline aquifers, unexploitable coal seams, etc). 2001-2010 - Methodology Guide - Version 6.1 30/116

maintaining or improving the highways allows emissions from road transport to exist, issuing passports means people can make long journeys, often by plane, with emissions, therefore, as a result, issuing building permits means buildings can be built, and therefore makes the emissions from operating these buildings possible, etc. Unfortunately, for most of the situations encountered, it is impossible to argue that one method is more pertinent than another for taking into account the subsequent usage and end-of-life emissions. Even in the case of a road infrastructure, assigning usage emissions to a renovated road entails knowing what the traffic would have been if the road had not been renovated, and while such an approach potentially has meaning at the very consolidated level of a state and over very short time scales, it can lose all significance at the level of a commune and/or over the lifetime of an infrastructure. The example of the passport is even more significant: there is no simple argument allowing one calculation to be justified in preference to another for the emissions attributable to the local authority because the passport was issued. Furthermore, while a company can decide between various possibilities concerning the products or services it provides, based on the consumption related to their use, in this case we are dealing with a legal obligation (it is difficult today for an authority to decide to refuse to issue a passport because it will generate climate change), with no possibility of arbitration and with no impact on what the issued passport will be used for, which removes a large part of the advantage there would be from calculating the emissions related to use whatever the circumstances. For that reason, the master spreadsheet of the authority module does not take into account certain allowed emissions by the services provided by the Local Authority (for example, heating buildings that will be built as a result of the building permit being issued by the town planning department, journeys that will be possible as a result of a passport being issued, etc). On the other hand, when there is a direct, immediate, unambiguous link between the service provided by the authority and a beneficiary s emissions (for example, the emissions of cars used to go to a show organised by the town hall), then these emissions are taken into account. In practice, it will basically concern travel related to activities taking place in the authority s buildings. 2.4 Precautions concerning the use of the results from the Bilan Carbone assessment 2.4.1 Defining the greenhouse gas content for a product or a service It is very tempting, after carrying out a Bilan Carbone that covers all the emissions related to an activity s operation, including the operation and end of life of the products provided to the consumers or users, to calculate for the products or services provided: an emission factor, which only covers the stages of production and delivery to the customer, a greenhouse gas content integrating the entire life cycle (production, distribution, use, end of life). 2001-2010 - Methodology Guide - Version 6.1 31/116

Such an approach clearly allows the organisation to go beyond an overall view of its contribution to the increase in the greenhouse effect. In effect, it opens the way to a differential analysis in order to identify those products or services that perform best in terms of global emissions, or in contrast the most vulnerable with respect to their fossil CO 2 content 27. Such an analysis can apply both to the services provided by a local authority (would it be better to have books or CDs in the media library?) and those provided by a company (would it be better to sell frozen vegetables or tinned vegetables?). Consequently the Bilan Carbone methodology, which is based on consolidated data for the whole site or all the products sold, means that an additional convention is required in order to obtain the Bilan Carbone for a specific product. The main step that remains to be covered is the allocations to the various products or services provided by the entity with respect to both non-individualised emissions, still known as consumables, and cases of by-products. With respect to consumables emissions, if we take a monetary parallel, the Bilan Carbone corresponds to normal accounting, while the greenhouse gas content per product or service provided corresponds to an analytical accounting, after the common expenses have been allocated according to the type of product sold. Analytical accounting, even at a summary level, is essential for defining cost prices. In principle, this is also the way in which the carbon accounting must be conducted. In the light of that, this method does not provide a standard rule for distributing general emissions 28 between the different products sold. Often, the same distribution key as that for general accounting expenses will not be appropriate, since there is no correspondence between the cost of the goods or services and their greenhouse gas content. The ideal is to always develop distribution procedures that reflect the physical phenomena best. For example, if a prefecture issues both driving licences and passports, obtaining the carbon content for the issuing of a document, licence or passport, (without taking usage emissions into account!) implies for both driving licences and passports allocating what seems to be an appropriate proportion of the shared emissions, i.e. the emissions arising from processes that are common to both services: emissions from manufacturing computers, heating the prefecture s administrative building, home-work travel by employees, travel by the Prefect, etc. The allocation rule can of course vary according to the sources: in proportion to the computers used by each service for the first source listed above, the m² occupied for the 2 nd, the staff employed for the 3 rd, and the registration fees paid by users for the 4 th! If we now consider the case of a chemical factory that has a combination of exothermic (i.e. producing energy) and endothermic (i.e. consuming energy) processes, and which produces 10 or 20 different products, then it is not possible ex-nihilo to provide a clear-cut method 27 Taking into account both their production and their use. 28 Which corresponds to the consumables expenses for accounting. 2001-2010 - Methodology Guide - Version 6.1 32/116

allowing a given proportion of the emissions to be allocated to any one specific product 29. The same is true if you are a bank branch, offering several types of financial products, and you want to allocate the emissions related to the computer department or the purchase of licences (because even a software system pollutes the climate!) per product sold. This question clearly does not arise if the entity examined only supplies a single product or service. But once a single site produces several products or services, the emissions for the procedures implemented must be allocated for the site s entire production. This method of distributing the common emissions to several productions will have to be decided on a case-by-case basis, given that possible standard keys are based on the economic value, importance of the products, the production energy used on site, the surface area occupied, the number of employees involved, etc. This distribution must always be explicitly specified when a productbased approach is carried out. Standard ISO 14040, on life-cycle analyses, defines the principles for the allocation related to cases of by-products. In addition to this step of allocating emissions, conducting a product s Bilan Carbone with respect to life-cycle analysis - will also require compliance with standard ISO 14040 s recommendations, especially concerning the requirements in the case of a comparative communication (producing a critical review linking the different parties concerned). Furthermore, it should be noted that, even it was carried out according to the ethical rules covered by ISO 14040 standards, a product s Bilan Carbone should remain single-criterion (greenhouse gas content). A comparison between products based on this single criterion is clearly only pertinent if other impacts (water, air, noise, etc pollution) are considered to be secondary, or identical over their entire life cycle 30. In effect, a fall in greenhouse gas emissions will sometimes be accompanied by a rise in other inconveniences. A well-known example of this is fuel: removing catalytic converters (or silencers) allows gains in the engine s output and therefore means the same mechanical energy is obtained with less fuel used. In other words, removing the catalytic converter is a good thing with respect to greenhouse gas emissions, although it increases other nuisances (local pollutants or noise if the converter is removed). Continuing the example, removing the sulphur from fuel forces refiners to increase their energy consumption, and relaxing this constraint would have both positive effects on greenhouse gas emissions and negative effects on local pollution. In the case of conflicting changes in greenhouse gas emissions and other environmental pollutions, comparison based only on greenhouse gas emissions is unlikely to be sufficient for making a decision. What will make adjudication possible will be, here as elsewhere, the question what is the purpose of the comparison?. Happily, conflicts of this type are not systematic and, on the contrary, in many cases reductions in greenhouse gas emissions will give rise to other advantages (known as side benefits) for other forms of pressure on the environment. 29 Another example might be a dairy factory, producing semi-skimmed milk, cream and butter: distributing the carbon content of the whole milk between these different products requires going more deeply into the issue than the standard rules that we provide. 30 However this will be the case if the Bilan Carbone is conducted in order to assess vulnerability to a rise in fossil fuel prices: the aspect taking precedence in this analysis is the fossil CO 2 content related to the entire production+use+end of life. 2001-2010 - Methodology Guide - Version 6.1 33/116

For example, switching from car to train for personal travel (or from plane to train for journeys in France) would enable considerable savings in greenhouse gas emissions without generating significant adverse consequences. The following table summarises the similarities and differences between the various possible approaches. Schematic comparison of different product changes: Life cycle taken into account Impacts taken into account Possible conformity with ISO 14040 standards Life cycle analysis (LCA) of a product Bilan Carbone of a product Emission factor of a product 31 Yes Yes No (usage emissions are excluded) Multi-criteria Single-criterion Single-criterion (greenhouse gas (greenhouse gas emissions) emissions) Yes if conducted No, except for specific No according to the standards cases 32 Use of the results Internal or external communication comparing products Internal, except for a specific case 33 The Bilan Carbone is supplied with new emission factors Displaying environmental information about the products and services 34 The Grenelle Environment Forum, through commitment 217, decided to generalise the display of environmental information about products and services by January 2011. This will be a multi-criteria display and will necessarily include the GHG criterion. The calculation rules were defined in an ADELE/AFNOR working platform that included all the stakeholders. A first document Good practice reference / General principles for displaying environmental information about consumer products covers the broad outlines of the project and the methodological principles. The calculation rules are going to be refined; some of them will be common to all products and services and others will be specific. Once the calculation rules are finalised (scheduled for September 2009) an appendix to this guide will be produced to present the relationships between the Bilan Carbone methodology and the environmental display. 31 Emission factor = Bilan Carbone without taking use and end of life into account 32 If it is demonstrated that other impacts (toxicity, water, air pollution, etc) are not significant, it therefore becomes possible, as an exception to the standard case, to make pertinent internal decisions solely based on the product s Carbon equivalent content. 33 An external use requires an independent critical review to be carried out. In the specific case of a comparison of products and an external communication, this critical review must include the different parties concerned (which requires, in particular, the involvement of the manufacturers of the various products compared, or their representatives). 34 More information is available on http://affichage-environnemental.afnor.org/ 2001-2010 - Methodology Guide - Version 6.1 34/116

2.4.2 - Creating ratios and comparison difficulties 2.4.2.1 - Review of monetary ratios It is fairly frequent, in a company, to relate a certain number of indicators to a production unit, beginning with a product s sale price, which is nothing other than the ratio of the expenses, plus the margin, divided by the number of products (or service units) sold. In the same way, the managers will be readily interested in staff costs per product, sales costs per turnover unit, etc, with targets that are often defined in a unitary way: it becomes important to reduce the proportion of overhead costs in the expenses, or to increase the gross margin per product sold. As for local authorities, they will tend to relate their expenditure to the number of people that benefit from it, or to activity indicators concerning each budget item (meals served, subscribers served, tons of household waste collected, children cared for in a childcare centre, etc). This tendency is even greater in macro-economic analyses, where it is very common to consider that everything is fine if a unit indicator changes in the right direction (for example, if the emissions per GDP unit fall then the solution is in sight). 2.4.2.2 Limitations of the greenhouse effect unit indicator In all situations, this habit of using unit indicators almost everywhere in economic analyses means it is very tempting to do the same with the greenhouse effect indicator. Indeed, once the Bilan Carbone has been produced for a site, the greenhouse gas effect per Euro of income, or the greenhouse gas content per inhabitant, can be calculated instantly. You must then beware of a frequent adverse consequence, which is to switch from an approach based on absolute values, the Bilan Carbone, to an approach based on unit indicators, and to only retain the latter in your vision of the future. With such an approach, the problem can get worse in reality (global emissions rise) while it appears to get less (unit emissions fall). All that is necessary is for the activity to increase faster than the unit reductions! Remember that the accumulation of greenhouse gases in the atmosphere is a direct function of the overall emissions by people, not of the unit emissions per car or per domestic heating boiler. Similarly, the reduction in petrol stocks results from its overall consumption by people, not from the unit consumption per plastic box produced or per aeroplane seat per 100 km flight. Any approach based on unit emissions therefore risks obscuring the fact that it is mankind s overall emissions that must fall, and similarly it is mankind s overall consumption of hydrocarbons which is dependent on the exogenous constraint of a given initial stock. It should again be remembered that the maths means that mankind s consumption of fossil fuels - and consequently its emissions of CO 2 - must fall one day, and even end up in time being reduced by a factor of two or three. It is in this imposed context that the arguments for the future take place, and the ratios created must have only one purpose: to make it easier to obtain a reduction in overall emissions, which remains the objective to be achieved. 2001-2010 - Methodology Guide - Version 6.1 35/116

Thus, ratios in themselves are not good or bad : there are those which help you have better insight into the constraint, and those which are not used in this way. 2.4.2.3 Precautions to take when drawing up a ratio Certain precautions need to be taken if you want to develop a ratio (emissions per unit of added value, per unit of net profit or loss, per employee, per unit of production, per square metre of ground, etc) because you consider its development will be useful for progress. To begin with, it is essential to define firstly what is taken into account in the emissions and secondly what question must this ratio allow you to answer. This second condition means that you can avoid creating ratios which contribute nothing or which focus attention on a secondary item of data. The first condition is even more important when the ratios are mainly used for comparison, either internally (comparing several products) or externally (comparing a company s product and a competitor s product). Such comparisons will be valid only if the emissions taken into account are calculated in the same way. Thus, the emissions per employee for two banks cannot be compared if one of the banks has carried out the Bilan Carbone for all of its sites and the other has just carried it out for its central services. Nor can the emissions per night be compared for two hotels if one of them has not taken into account its customers journeys before booking in, etc. Note that the spreadsheet includes a function for drawing up ratios automatically. This function is provided thanks to the characteristics of the site supplied by the user (physical and monetary data). 2.4.2.4 Special case of comparisons between regions One of the ratios that the Bilan Carbone methodology ( region module of the local authority version) will allow you to create is, of course, the average emission per resident for a region, and it will be extremely tempting to compare it. This comparison contains a certain number of traps, and we think it useful to highlight them here. First of all, any comparison is debatable - even invalid - when the results compared have been calculated using different methods. It so happens that some territorial levels are already the subject of greenhouse gas emission inventories 35, often based on cadastral approaches, or using macro-economic data (fuel sales at a regional level, for example). Secondly, any comparison is effectively meaningless when the calculations are not made public 36, since no-one can know what has been taken into account and how. If the intermediate calculations have not been published, then you have no basis on which to compare two Bilans Carbone, and even when calculations are published you need to check that the same conventions are used. The experimentation phase of the authority version showed that large variations in results could arise simply from differences in the conventions taken into account (for example, the average journey length for a tourist arriving by plane). 35 CITEPA s inventories, emission cadastres produced by the Air Quality Monitoring Agencies (Agences de Surveillance de la Qualité de l Air), etc. 36 This is one of the reasons why the Bilan Carbone s emission factor guide is freely available on ADEME s site: this means that there is no black box for the values used to calculate emissions. 2001-2010 - Methodology Guide - Version 6.1 36/116

Finally, some authorities that have an activity which is over-represented in their territory compared to the national average (airport activities, refineries, etc) may also be tempted to consider their local contribution to this national activity in terms of emissions, without questioning the usefulness of this comparison. Before comparing anything you need to bear in mind, in addition to the above reminders, the following points as well: 1. Most of the greenhouse gas inventories are restricted to the emissions of gases covered by the Kyoto protocol (see 2.1.1 and 2.1.2). The overall Bilan Carbone includes other greenhouse gases (CFCs, stratospheric water vapour from planes, etc). The comparison must therefore be made on the same accounting base. 2. The Bilan Carbone includes emissions that are indirect (and thus outside the territory), which are rarely or only partially taken into account in the other inventories, and especially the cadastral approaches. 3. The main objective of a region s Bilan Carbone is not to exclude emissions that may also be part of another region s Bilan Carbone: the main objective is to provide the keys for action, not to have regional emissions that can be added together. Users of the region module must therefore be extremely cautious when making any comparison, and pay great attention to the accounting assumptions retained for each situation. In particular, they should avoid publishing any comparison if the calculations are not made public. The users should also bear in mind that the Bilan Carbone approach, based on flows and processes, makes it possible to get back to the determinant for the emissions, and therefore to prepare the action better, which purely cadastral approaches do not always allow. In all the scenarios, every ratio, whatever it is, must therefore be found near the information enabling you to know how it was constructed and, again, what it is used for. 2001-2010 - Methodology Guide - Version 6.1 37/116

3 - Application to industrial and tertiary companies 3.1 - Entities concerned The companies module of the method, which described in this chapter, is primarily for use by any activity producing goods or a service, whether public or private: any industrial or tertiary company, including commercial activities, any craft industry, any public organisation or administration, any association or foundation (charity or public interest operations do not mean low greenhouse gas emissions) and, more generally, any human activity producing objects or services which is carried out in a location defined in an unambiguous way. Fundamentally, the companies Bilan Carbone is a site method, which carries out its entire analysis from the examination of the flows of materials and energy entering and leaving a site whose limits are clearly defined. But this version, despite its name, can also be applied to units that are larger or smaller than a site in the standard meaning of the term (a factory, an office) when the flows of materials or energy associated to the unit can be specified unambiguously. Thus, the method can be applied to: any sub-unit of a production activity (for example, the part of a factory that produces a given object, with its related upstream and downstream flows), any process chain taken from beginning to end; in this case the site is all the locations involved, one after another, in producing a set of products and/or services (for example, producing and selling Saint Emilion), any professional federation or business activity; in this case the site is all the locations included in the scope of the professional federation or business activity, any geographically delimited activity (for example: tourism in the Dordogne), etc. More generally, the companies module described in this chapter is designed to be applied to any type of entity when it supplies even free of charge goods or services, and the data relating to it is centralised or can be centralised. 3.2 - Description of the emission sources taken into account 2001-2010 - Methodology Guide - Version 6.1 38/116

This chapter lists the different sources taken into account in the master spreadsheet of the companies version associated with the method. On principle, this list is not limited and nothing prevents you from adding one or more sources to the spreadsheet if it corresponds to a physical reality with the entity which is carrying out its Bilan Carbone. 3.2.1 - Energy use within the entity This source covers: direct use of fuels, of fossil or organic origin 37, for heating, industrial processes or the production of electricity or vapour for the entity s own use, electricity and vapour purchased, including for heating. The Bilan Carbone spreadsheet provides two tabs, identical in all respects, for entering energy consumption details. This function allows the user to separate energy consumption into two different sub-sets if that makes the results easier to read. This facility provided by the spreadsheet means it is possible, for example, to differentiate between: the energy used for thermal comfort and the energy used to make the production machines operate, the energy used in two consecutive procedures, for a Bilan Carbone that only covers the industrial portion of an activity, the energy used on-site and the energy used off-site for exactly the same production (which, in version 4, was called sub-contractor s energy ), for example in the case of an activity where some of the procedures are performed externally (for example, in a bottling factory where some of the bottles are produced on site and some are brought in from somewhere else, the production energy of the bottles produced off-site can be differentiated from the energy used on-site). In all situations the discrimination criterion is left to the user, who should of course mention it so that the results are understandable. 3.2.2 - Emissions from industrial or agricultural processes (except for those resulting from using energy) This source covers greenhouse gas emissions resulting from: chemical reactions other than combustion for energy purposes (for example, decarbonation by cement manufacturers, or flaring gases by refiners, which is combustion but is not intended to produce energy), nitrous oxide emissions, whatever their cause (nitrogenous fertilizers used in agriculture, chemical processes, etc), methane emissions, whatever the cause (enteric fermentation by ruminants, excreta in livestock farming, fermentation in the processing of organic waste, ventilation in coal mines, rice cultivation, etc), 37 Also called biofuels. 2001-2010 - Methodology Guide - Version 6.1 39/116

halocarbon emissions (leaks of cooling fluids, emissions from processes in the semiconductor or electrical equipment industry, etc). With respect to the last point, the method takes CFCs into account, since these are greenhouse gases, even though they are not in the Kyoto protocol s field of application. Their emissions are distinguished in the summaries of the results. As with energy, the company master spreadsheet has two identical tabs for handling emissions from processes, which makes it possible to differentiate between different sources, both within the audited scope, if necessary (if it makes the results more legible). 3.2.3 - Incoming materials and tertiary services In this category we will find all the flows of material or services which enter the entity taken into account, regardless of whether they are to be consumed on site or in order to be incorporated into the entity s production. 3.2.3.1 - Incoming materials This sub-set covers, first of all, the materials used by the activity in order to be incorporated into its own production, namely: basic materials (metal, glass, etc) for a manufacturer, agricultural products in the case of agri-food companies or a restaurant (including company restaurants), raw materials and reactive materials in the case of chemical companies, materials required for packing incoming materials, etc. The spreadsheet allows - if necessary - emission factors distinguishing products made from recycled materials or new materials to be taken into account. This source also covers emissions from producing materials used for its own consumption, such as chemical or reactive products for the entities that use them (for example for cleaning), paper or toner cartridges, food products used by the company restaurant, where appropriate. This category includes in particular the manufacturing emissions for the future waste disposed of by the audited entity. Theoretically, this source of course includes semi-finished products or manufactured products incorporated into the activity examined: for example, in the case of a marketing activity, the emissions resulting from manufacturing the products sold are to be taken into account in this source. It is not unusual for investigation outside the entity audited to be required for this source, in order to obtain some emission factors that are not already filled in on the standard spreadsheet. This might entail asking major suppliers to conduct their own Bilan Carbone possibly at a summary level and send it to you or to use ADEME s Product Balance tool 38. The practical difficulties sometimes associated with this accounting are discussed in 2.2.3. 38 downloadable on www.ademe.fr/bilan-produit 2001-2010 - Methodology Guide - Version 6.1 40/116

3.2.3.2 - Tertiary services excluding transport The tertiary services (excluding transport) consumed by the entity conducting its Bilan Carbone are also taken into account, since their production will also generate emissions. These services can, for example, include: computer services, telecommunications services, maintenance, upkeep and cleaning, banking services, training, advertising, fees of all kinds (lawyers, accountants, etc), etc. If the services consumed make a significant contribution to the total emissions of the activity in question, additional investigations among the main service suppliers will be necessary before the figures are published. 3.2.4 - Packaging of products sold or distributed The Bilan Carbone companies spreadsheet has a sheet that allows you to view the overall contribution of the waste by destination, which is the packaging of the products sold or distributed, even though this packaging is not disposed directly by the entity that puts them into circulation. We will therefore take into account, here, emissions that have been linked to the production of the plastics, papers, metals, etc that are needed to produce the packaging, and then emissions related to this packaging s end of life, which will occur very soon after it has been put into circulation. We can cite the following reasons why it seems relevant to provide specific information about packing, by listing it separately within all incoming materials: packaging does not have the same specifications as the product it encloses; in particular, for a given product, the subsequent methods of transport can have a significant influence on the packaging, in general, customers (or beneficiaries) of the product or service do not have the same requirements for the packaging as they do for the product, the packaging is often placed under the operational responsibility of a clearly identified person, who is distinct from the people who are directly responsible for the product, and is able to use the specific information supplied, the marketing and sales constraints for the packaging are not those for the product, the future of the packaging, once disposed of, can be determined statistically (because packaging will be disposed of almost everywhere); as a result, average emission factors can be assigned for its end of life 39. 39 Details are provided in appendix I of this document 2001-2010 - Methodology Guide - Version 6.1 41/116

3.2.5 - Freight This source covers the transporting of goods out on behalf of the entity audited, without the ownership of the methods of transport being taken into account; discrimination is by type of journey. It will include: so-called internal transport, with a departure point and an arrival point which is part of the scope audited, transport of products which leave the audited site and are dispatched elsewhere (to customers, users, or suppliers in certain very specific cases), transport of products which come from outside and are delivered within the audited scope (generally this relates to transporting purchases from suppliers to the audited site). The spreadsheet allows you to take account of road, air, sea, river and rail transport. As a general rule, emission factors take account of the vehicle s capacity, its filling rate, and any criteria with a strong influence on emissions per tonne.km transported. 3.2.6 Transporting people 3.2.6.1 - Home work travel This source covers emissions from home-work travel for the staff present in the entity, including temporary workers, sub-contractors and contract workers. For this source, the spreadsheet takes account of road (car, bus and motorcycle) and rail transport. 3.2.6.2 Employees travel for work This source covers emissions from travel by people in the framework of their professional activity in the entity conducting its Bilan Carbone, whether the means used is the property of the entity or not, and whether the travel occurred during working hours or not. The spreadsheet takes account of road (car, bus and motorcycle), air, maritime and rail transport. 3.2.6.3 - Visitors travel This source covers emissions from travel by visitors, including: customers of a shop or a company, visits for professional (suppliers, certifiers, auditors, etc) or related (job applicants) reasons, users of the administration, tourists staying in a hotel, visits as part of public relations policies, etc. 2001-2010 - Methodology Guide - Version 6.1 42/116

The spreadsheet takes account of road (car, bus and motorcycle), air, maritime and rail transport. 3.2.7 - Direct waste and sewage This source allows you to estimate greenhouse gas emissions related to end-of-life processing of harmless or hazardous, solid or liquid, waste which will be produced directly by the entity (company or administration) conducting its Bilan Carbone. 3.2.7.1 - Harmless waste There are two ways in which harmless waste can lead to greenhouse gas emissions: either through the fermentation of organic waste placed either in a landfill or in a biological treatment centre (methanisation station or composting plant) or by the combustion of plastics, which produces fossil CO 2 emissions (the plastic is transformed petrol or gas). This harmless waste can be: the packaging from the entity s purchases (plastic blister packs, old barrels, glass, boxes, etc), production waste (shavings not retrieved on the spot, old paper, etc), food waste (staff canteen, etc), some consumables after use (old paper, plastic cups, etc), possibly plant waste (grass-cuttings, etc). The method allows the emissions generated to be taken into account, according to the method used to process this harmless waste. The method, of course, takes account of the fact that the end-of-life processing does or does not give rise to energy recovery (recovery of heat and/or electricity for incineration, or the recovery of methane for landfills), or material recovery (for recycling). In the latter case, material recovery only occurs on the primary portion of the material for the waste to be recycled i.e. on the portion of the material that has not already been recycled in order to avoid double accounting with the incoming materials source. A more complete explanation of taking material recycling into account is described in appendix I. It should be noted that the value of these avoided emissions is not deducted from the carbon emissions profile of the entity carrying out its assessment. This amount is accounted for separately, with all the avoided emissions assessed (e.g. avoided emissions for carbon sinks 2.3.1.1). 3.2.7.2 - Hazardous waste Hazardous waste generates emissions not because of its toxicity but because of the quantity of fossil fuel used for its transport, containment, storage or processing. The method currently 2001-2010 - Methodology Guide - Version 6.1 43/116

only provides an average emission factor for the waste that is simply stabilised and then stored above ground. However, more frequently you will need to calculate the emission factors appropriate to your own hazardous waste by interrogating the waste operator who handles it. 3.2.7.3 - Waste water Waste water can emit methane, which is one of the greenhouse gases considered in the framework of the Kyoto protocol, when it is released into the environment without treatment and it contains an organic load. In effect, if this water remains in an anaerobic condition 40 for a long time (several months or more), then this organic load will decay and produce methane. The greater the load of organic matter in the water released into the environment, then the higher the emissions. Three conditions must therefore be met: a significant organic load in the waste water, no processing before release into the environment, anaerobic condition after release. If the waste water is treated just after its emission (for example, in a station integrated into a factory, or in a communal plant), clearly it is the residual load in organic matter after treatment that potentially has to be taken into account, in that the load before treatment only remains in the water for a few hours (sometimes less), which is insufficient to trigger significant methane emissions. If this residual load is placed in an aerobic condition (for example in running water that is sufficiently oxygenated), there are no emissions to be taken into account either. Remember that emissions of CO 2 of organic origin, often generated by organic waste treatment processes, are not to be taken into account in the Bilan Carbone. The method is based on the load in organic matter of the waste water, applying the simplest method recommended by the IPCC. 3.2.8 - Depreciation of immobilised elements This source covers investments in durable goods (those which are subject to depreciation in accounting), the manufacture of which leads to greenhouse gas emissions in the same way as for all production of materials. By convention, in the method, we distribute manufacturing emissions over a certain period of time, in the same away as depreciation in accounting, in order to ensure that Bilans Carbone conducted at successive intervals are comparable between each other. The main fixed assets covered in the method relates to: real estate, highways, vehicles, computer equipment, production machines 40 Anaerobic means without contact with the air, and the effect in question here will, as a result, occur without contact with the oxygen in the air. 2001-2010 - Methodology Guide - Version 6.1 44/116

The spreadsheet associated with the method enables an evaluation of initial production emissions for the immobilised element, and then enables the spread (i.e. the depreciation) of these emissions to be processed over a period chosen conventionally by the user. Nevertheless, it should be noted that when the Bilan Carbone is applied to a large entity which manages an annual flow of renewals or increases in its fixed assets (a bank that buys computer equipment every year, a restaurant chain that builds or renovates establishments every year, a car rental company that renews its fleet frequently, etc), it is recommended that this source is processed as an annual flow and not as a depreciation of the existing base. This choice will often be the most relevant for defining emission reduction initiatives based on recurring annual purchases. In this case, the manufacturing emissions of purchases made in the year of the Bilan Carbone are counted in that year, with no depreciation. Finally, it should be noted that intangible emissions (brands, concessions, licenses, etc) are not taken into account. 3.2.9 - Taking the use of marketed products or services into account Once a product or service is at the customer or user, its use can generate greenhouse gas emissions. A car is the most obvious example but there are many other situations to which this applies, such as: electricity production for household appliances, the combustion of gas for a dwelling as a whole (for a house builder), or a stove, or emissions from planes if your activity consists of financing exchange scholarships between countries (which often entails putting people in aeroplanes!). This might also include future leaks if you sell air-conditioning systems, N 2 O emissions if you manufacture nitrogenous fertilizers, acetylene combustion if you sell blowtorches, maintaining the cold chain if you sell frozen goods, or even car journeys if you sell products in a hypermarket (since the car is essential for shopping in hypermarkets, and we can therefore consider that everything sold in this type of large surface store inherits a fraction of the emissions of the car used to travel there). These emissions can easily become more significant than the manufacturing emissions (this is clearly the case for the car, for example). The Bilan Carbone also provides a dedicated tab that allows you to enter energy consumptions and GHG leaks that you need to evaluate by order of magnitude. Two approaches are theoretically possible for taking this source into account over the Bilan Carbone s reference period (which will usually be a calendar year): either to take emissions accumulated over their entire lifetime into account solely for products or services sold (or given or distributed) during the Bilan Carbone s reference period, or to take into account, for the Bilan Carbone s reference period, emissions for everything that has been sold by the company and that is still in operation (this is referred to as an installed base). By convention, we will select the first way of working. The reasons for this choice are as follows: 2001-2010 - Methodology Guide - Version 6.1 45/116

this makes it easier to obtain primary information: sales figures are easier to obtain than installed bases, the notion of installed base does not exist for consumable products or services, the impact of a reduction action is more easy to assess: once the item or service is in the customer s possession its use is not necessarily controlled by the entity that sold it, which makes it more difficult to identify the margins for manoeuvre from installed bases. Even if this is not a justification in itself, we also note that this approach facilitates consistency with other initiatives, such as Energy Savings Certificates (also known as white certificates), which take into account energy consumptions accumulated over the lifetime of the products sold in the year - or over the reference period 41, and therefore of emissions over the entire lifetime of the equipment eligible for this mechanism. If the 2 nd solution must be applied in any situation whatsoever, then a detailed explanation must be supplied. In all cases you need to know the average energy consumption values and leakages associated with the use of products and services, as well as their average lifespan. When lifetime emissions are easy to evaluate in orders of magnitude, this will be relatively simple. Some examples: if you sell a gas stove, you then just need to count the gas used over a stove s average lifetime, if you sell a car, you will need to count the fuel, possibly cooling fluid leaks for the airconditioning system, and the emissions associated with maintenance services (manufacturing and transporting spare parts, heating the premises used for this, etc) before the vehicle is scrapped, if you sell a refrigerator, you will need to count the emissions related to electricity production over its lifetime (clearly highly variable, depending on the country of use) and possibly cooling fluid leaks, if your business consists of organising voyages, you can take into account the emissions related to the voyages purchased from you, etc. Because of the great variety in possible situations, the spreadsheet does not enable activity data to be entered directly (which would be the case if the calculation sheet contained a cell where you could directly enter a number of microwaves or plane tickets sold). Intermediate calculations must be performed before reporting the overall energy consumptions thus calculated in the ad-hoc cells of the use tab. Finally, for products with a long life span (houses, vehicles, transport infrastructure, etc), as covered in 2.2.4, a specific note about discounting emissions is included in an appendix to this document. 3.2.10 - Taking the end-of-life emissions of marketed products into account The following does not concern products or services whose very use implies their destruction: a candle, a litre of fuel, a firework rocket, etc. Emissions for these cases are covered by 3.2.9 above. 41 The calculation unit for white certificates is the kwh CUMAC, i.e. the updated cumulative kwh). 2001-2010 - Methodology Guide - Version 6.1 46/116

At its end of life a product or service may generate emissions: leaks for a refrigerator in a landfill, fermentation for carrot peelings in a landfill, CO 2 emissions for a plastic toy sent to an incinerator, etc. The spreadsheet associated with the method allows you to enter information for standard cases covering the processing of harmless waste and the above-ground storage of hazardous waste. Note, however, that for most special treatments you will need to calculate a specific emission factor before you can fill in the Bilan Carbone spreadsheet. 3.2.11 - Steps covered by the emission factors for the companies module The table below summarises the steps that are taken into account when emission factors are drawn up, and which are therefore represented in the Bilan Carbone, based on the source in question. The upstream (or production) step covers what occurs before use by the entity conducting its Bilan Carbone, in place covers what occurs directly within the entity, and lastly downstream refers to the processes that occur after passage through the audited site. Steps taken into account Upstream (production) In place Downstream (including endof-life) ENERGY * * ( 42 ) NON-ENERGY EMISSIONS * INCOMING MATERIALS / TERTIARY SERVICES TRANSPORT * * DIRECT WASTE / SEWAGE * PACKAGING * * DEPRECIATION * USE END OF LIFE * * * Table 1: steps taken into account in the Bilan Carbone (upstream, in place, downstream) 42 End-of-life emissions relate to energy production systems (dismantling). For power stations using fossil fuels, these end-of-life emissions are negligible in relation to the emissions linked to their operation. For nuclear power stations and dams, these emissions are low per kwh produced. 2001-2010 - Methodology Guide - Version 6.1 47/116

3.3 - Special implementation cases 3.3.1 - Activity spread over several sites, or separated into several steps It often happens that the entity conducting its Bilan Carbone has several sites, which may be the subject of identical processes (same production carried out in different places) or not (each factory handles a specific step in a production cycle, or carries out activities having no direct relationship with the others, the sole link being a corporate one). In such a case there are two possible ways of conducting the Bilan Carbone for the entire entity. The first consists of conducting a single Bilan Carbone, having previously centralised the activity data, as follows: for energies that are identical from the point of view of greenhouse gases (gas, petrol, possibly coal), the consumption for all the sites will be totalled, for electricity, the total purchases per supplier (since every supplier has its own emission factor) will be calculated for the entire company, travel between sites will be considered to be internal transport, flows with the outside will be processed in a centralised way, broken down by method of transport, of course, consumptions of raw materials will be processed in an overall way, for the entire company, and, more generally, all the activity data will be centralised, with double accounting avoided. A second way of working consists of conducting the Bilan Carbone for each site, and then total all of them up. A function is now provided in the site spreadsheets for avoiding double accounting: an export sources tab, which lists exactly the emissions that are to be combined in the following step. A new spreadsheet (multi-site utility) is also available, which allows you to combine unitary Bilan Carbone spreadsheets, or accumulations of sub-sets corresponding to specific scopes (for example, a first accumulation step can include sites dedicated to a specific sector in a group, before a general accumulation consolidates all the sectors of the group in question). It is possible to stack the accumulation spreadsheets without limit. 3.3.2 - Sites abroad The limitations for the geographical applicability of the Bilan Carbone method were detailed in 1.4. 3.3.3 - Subsidiaries and holdings In order to know exactly how to consolidate the emissions for several subsidiaries when the company s holding in each subsidiary is different, we recommend you follow the rules specified by standard ISO 14064 or by the GHG Protocol 43, namely: 43 www.ghgprotocol.org 2001-2010 - Methodology Guide - Version 6.1 48/116

all the emissions are taken into account if the company conducting its Bilan Carbone is responsible for the site s operational management, whether the holding is 20% or 80%, no emissions are taken into account if another company is entirely responsible for the site s operational management (the case of a minority holding without a seat on the board, for example), the emissions are taken into account in proportion to the financial participation if the subsidiary s management is completely autonomous. Note that the last situation corresponds to a certain logic for a report, but its interpretation is more difficult in the context of an environmental management approach. In the case of an industrial group, not much can be deduced if a fall in emissions is due to a fall in the level of participation in a subsidiary involved in the production process. On the other hand, if the Bilan Carbone relates to an investment activity, it can be argued that an investor s consolidated Bilan Carbone reflects the overall emissions of the activities in which it has invested. 2001-2010 - Methodology Guide - Version 6.1 49/116

4 - Application to local authorities 4.1 - Special features of the method for local authorities The version of the Bilan Carbone methodology dedicated to local authorities has the special feature of being comprised of two modules, corresponding to two possible approaches to the issue: 1. An authority module, which covers the emissions generated by the authority s own activity or by the services it provides; 2. A regional module, which covers the emissions generated by all of the activities located within the territory of the authority in question. These approaches can be used either separately or in parallel, depending on the question posed. We describe the field of application of each of them below.. 4.2 - Authority approach 4.2.1 - Entities concerned and general structure of the authority master spreadsheet The authority module of the Bilan Carbone can be applied to any regional authority providing, directly or by delegation, various public services - administrative, technical, etc - in a geographical area that has defined boundaries. This relates, in particular, to a commune (large or small), a departement, an urban district, a region, or even a Regional Nature Park, a country, an intercommunal syndicate for collecting waste or supplying electricity, etc. NB: in the case of Countries or Regional Nature Parks, the implementation of the authority module will be very limited since they have organisational duties rather than regional jurisdictions in the strict sense of the term. However, this does not create a theoretical obstacle to the method being applied to their own assets, even if they are very modest. In this authority module, the organisation is therefore considered to be a supplier of a specific type of services (waste collection, administering educational establishments, highway maintenance, etc), using, for this purpose, its own assets or external resources that it has effective control of. These external resources can come from a public service delegation, or any other method of directly controlling the activities of an organisation that the authority does not own. Since there are generally distinct establishments, distinct suppliers and distinct flows of people for each of the authority s services (there is no particular reason to treat students going to school like the employees of a swimming pool), the recommended approach for an authority is the same as that for a company with a number of different sites. 2001-2010 - Methodology Guide - Version 6.1 50/116

That amounts to considering each of the authority s services and activities as a separate service provider, which will be the subject of a unitary Bilan Carbone with a site type of spreadsheet that is shared with the company module, the sources being described in 3.2. Some of the descriptions will sometimes be adapted to the case of local authorities, and some sources or items will be deleted as they are not necessary. For example, the source incoming materials for packaging basically becomes meaningless in the case of a local authority service (which will rarely sell blister packs of pens or pots of yoghurt), and the same is true for the outgoing freight item, etc 44. A multi-sites utility will then be used to obtain the Bilan Carbone for the entire authority. This approach allows the results to be consolidated either by flow (fuel or freight for all of the services) or by the service provided (the emissions for all the cultural establishments that the authority is responsible for, etc). Chapter 4.2.2 below describes the breakdown of the authority s services that we recommend (so that the results can possibly be compared between authorities) and chapter 4.2.3 details the emissions sources taken into account in each service. 4.2.2 - Description of the authority s services and activities An authority s scope of intervention is defined by the jurisdictions it is responsible for. All the services and activities that the organisation implements, both on behalf of its jurisdictions and in order to apply the policies of the elected representatives, will therefore come within the assessment scope of the Bilan Carbone. These services and activities can therefore be either direct (action managed by the authority or delegated to another organisation) or more indirect (housing, community and cultural policy, education, etc). Below we discuss the services most frequently provided by a local authority, and which will need to be analysed. On principle, this list is not limited and you will of course need to consider the rest if it corresponds to a physical reality in the authority which is carrying out its Bilan Carbone. 4.2.2.1 - General administration This term refers to operations relating to the infrastructures (buildings) and people directly involved in supplying the administrative services provided by the authority, or necessary for its own operation (registration of births, marriages and deaths, issuing documents and authorisations of all kinds, accounting and financial services, quaestorship or equivalent, staff provided for generalist elected officials, etc). Thus, logically, this case will include: the authority s central services and buildings: regional and departemental council offices, and town halls, 44 On the other hand, there can occasionally be outgoing transport flows. One example is the removal of rubble in the context of construction work. See 4.2.3.2 for this scenario. 2001-2010 - Methodology Guide - Version 6.1 51/116

all the agents (civil servants and those working under contract) of the authority s services present in these central buildings, the infrastructure and staff providing these central services in a decentralised way throughout the territory, including, where appropriate, the municipal police, everything which relates to elected officials without portfolio (in particular, travel and the operation of the services made available to them). Elected officials assigned to specific operations (town planning, highways, green spaces) can find the emissions from their individual service included in the emissions for the service that they are primarily responsible for. If the general administrative buildings house officials who, in practice, only provide a specific service (education, highways or culture, for example), then there are two ways to take the emissions related to the activity of these officials into account: either they are kept as general administration, since it is above all the building s manager who can have an influence on the emissions in question, or they are assigned to each service in proportion to the number of officials involved, in order to improve visibility about the real cost of the service with regard to greenhouse gas emissions. For example, the emissions for a departement s highways department could be either be included on the General Administration worksheet, which would contain the emissions for all office buildings regardless of the service provided by the officials working there, or integrated into the Highways spreadsheet, which would contain the emissions for everything related to the upkeep of the roads. The context should therefore make it possible to decide which emissions are to be broken down by area of intervention. The objective is for every department and every official to be able to define and adhere to an action plan that is meaningful to them. 4.2.2.2 - Education This case will cover the educational establishments that come within the authority s jurisdiction, where applicable. Bearing in mind the way in which the education system is organised in France, this will be limited to the following authorities: Communes, which are responsible for the nursery and primary schools Departements, which administer the secondary schools Regions, which are in charge of the high schools, vocational training and continuing education. Further education is only to be taken into account if the authority exercises a direct and strong influence over the establishment in question (e.g. the Ecole Nationale Supérieure de Physique et Chimie Industrielle of the City of Paris). This service will not generally exist for the other authorities, such as Communities of Municipalities, Conurbation Committees, Countries, Regional Nature Parks, etc. Each establishment could be the subject of a separate Bilan Carbone, in which all the flows associated to its operation would be taken into account: energy on-site, travel by students, teachers and various visitors, production of supplies and food purchased, etc. Following this, 2001-2010 - Methodology Guide - Version 6.1 52/116

by using a multi-sites utility you will be able to consolidate the emissions for all the educational establishments in order to obtain the emissions for the education service. 4.2.2.3 - Housing This service covers all the housing, generally social housing, that is administered by an organisation in which the authority can have a direct financial and/or decision-making involvement. This will therefore potentially relate to housing provided by public housing associations (HLMs and ILMs) and other identical organisations. The associated emissions will, of course, relate to thermal comfort, but will also include all the other emissions linked to their operation (the residents home-work travel, supplies of material for renovation, etc). The exact scope to be taken into account can be adapted to the context. Like education, each distinct housing unit (an apartment block, a residence, or sometimes just a dwelling) could be the subject of a separate Bilan Carbone, and then the emissions for all the housing the authority is responsible for can be consolidated with a multi-sites utility. 4.2.2.4 - Public transport Emissions taken into account in this category are those generated by all public transport activities for which the authority in question provides most of the financing and/or where it has a decision-making position on the administrative board of the entity providing the service (as a general rule, public transport services are provided by a specific entity in which the authority has a major decision-making role). Like the other areas of intervention, not all authorities are in charge of public transport services. Depending on its type, public transport will be associated with different types of authorities: Urban transport systems (urban bus, underground railway, tramway) most often come under the jurisdiction of a commune, community of municipalities, or a conurbation. Departemental transport systems (bus) are generally the responsibility of General Councils, Regional express transport (TER: Transport Express Régional) systems are the responsibility of the Regional Councils. When the method is implemented, you must pay attention to a possible duplication of emissions taken into account elsewhere, such as for example: the school bus service may already have been taken into account in the travel associated with educational establishments (see 4.2.2.2 above), some services may be dedicated to cultural or sports establishments, and therefore have been accounted for in the travel of visitors in the worksheets in question, etc. 4.2.2.5 - Water and sewage This category consists of the services managing the water supply and sewage (pipes, network of collectors, sewage treatment plants). These two jurisdictions are the responsibility of the 2001-2010 - Methodology Guide - Version 6.1 53/116

commune, intercommunalities created for the purpose, or general councils. This chapter does not concern the other types of authorities. While the general principle for taking emissions into account remains the same here as for the other services, methodological difficulties may arise in this specific case because of the historical background. In effect, water was the initial incentive factor for the introduction of intercommunalities, leading to the creation of syndicates, communities of municipalities and other cooperative bodies, who centralised the provision of just one part of the service: syndicate responsible for the pumping, water distribution, purification, dams, water table, river, etc. As a result, you will need to decide upon a distribution key for distributing the syndicate s operational emissions between the various authorities benefitting from the service, for which there is no obvious answer. The allocation can be in proportion to the number of subscribers, inhabitants, volume consumed, volume collected, or even the electrical consumption of the various parts of the network, if these can be itemised individually, etc. The second difficulty arises from the fact that the water and sewage networks are usually managed jointly by the commune and a delegated service provider, with relationships that can differ widely in legal terms, as the following table shows. Delegated managemen t equipment operation financing concession belongs to the commune but financed by the concession holder by the concession company The users pay the charges to the concession holder, which makes no repayment to the commune. It finances investments with its own funds. delegated service belongs to the commune and financed by the commune by the delegated service company The users pay the charges to the delegated service company, part of which is transferred to the commune. On the other hand it does not finance the maintenance of the network, which the commune remains responsible for. management belongs to the commune and financed by the commune by the management company The charges are paid directly to the commune, which pays a fixed fee to the management company and is responsible for financing investments. incentive-fee management belongs to the commune and financed by the commune by the management company The charges are paid directly to the commune, which pays the management company based on an operations incentive scheme. The commune remains responsible for financing investments. In the context of the Bilan Carbone, as in the case of a company, ownership of the means of production is not a selection criterion: all the flows linked to operating the network (power, maintenance and replacement of parts, methane emissions from sewage treatment plants, etc) are therefore to be taken into account. 4.2.2.6 - Waste 2001-2010 - Methodology Guide - Version 6.1 54/116

This source will include all the obligations to collect and process waste that the authority is responsible for, and also all the services of a similar type implemented at the authority s initiative. This will cover household waste, of course, but it will also include the waste collection centres, hazardous waste collection services managed and/or financed by the authority, etc. Finally, with regard to household waste (collection and processing), as with water the primary jurisdiction falls within the jurisdiction of the communes. Indeed, the law 45 stipulates that the removal of household waste will be carried out by the communes or the public establishments for intercommunal cooperation, possibly in collaboration with the departements and the regions. The communes can, however, transfer to a public establishment for intercommunal cooperation or a mixed syndicate either all the powers covering household waste removal and recovery or else the portion of these powers covering the processing and placing in a landfill of the final waste together with the transport, waste sorting and storage operations associated with this. While the communes are legally central to the management of these services, directly or through an intercommunality, there can therefore also be significant involvement by departements and even regions. In the context of the Bilan Carbone, since the ownership of goods or a service is not a factor distinguishing what is to be taken into account, all the resources utilised for the end-of-life collection and treatment are to be taken into account, including emissions derived from the treatment processes (methanisation, fossil CO 2 emissions from the plastic incinerated). Remember that CO 2 of organic origin is not to be accounted for, even if it results from human activities (see 2.1.2). Appendix I of this document gives special instructions about carrying out a Bilan Carbone specific to waste management organisations. 4.2.2.7 - Sports facilities This category covers the emissions related to the operation of infrastructures, enabling all types of sports activities to be organised, on which the authority exercises a direct influence either because it is owned or financed by the authority, or because it is managed by the authority, either directly or by delegation. This will include swimming pools, skating rinks, sports stadiums (athletics, team and individual sports such as tennis), multi-sport or dedicated sport halls and gymnasiums, water sports centres (sailing, rowing, canoeing, etc), mountain lifts, riding centres, recreational aerodromes, motor racing circuits, and other less common facilities related to a sports or para-sports activity, such as curling stadiums or archery facilities. For certain activities that combine sport and culture (e.g. a botanical mountain hike), you need to be careful to avoid duplication with cultural activities. 4.2.2.8 - Cultural establishments 45 Extract from the French General Code of Territorial Communities (Legislative Part) [ Extrait du Code Général des Collectivités Territoriales (Partie Législative) ] - Chapter IV: Industrial and commercial public services - Section 3: Household waste and other waste 2001-2010 - Methodology Guide - Version 6.1 55/116

Cultural facilities include all the infrastructures dedicated to managing and organising activities that are principally artistic and/or cultural in nature, whether it is managed directly by the authority or through an association where the authority is responsible for a substantial portion of its financing, excluding subscriptions and entry fees. The following are therefore to be taken into account: museums (arts, science, cultural, etc), libraries and media libraries, auditoriums (theatre, concert, dance, etc), historical sites (battle sites, country mansions, castles, etc), sites of archaeological or scientific interest. Of course, among the above sites only those for which the authority in question has a substantial involvement, and consequently an ability to intervene, will be taken into account. As a result, cultural facilities that are completely private will not be taken into account here, nor will those located in the territory of the authority in question where the authority has no responsibility or role in its management. By extension, activities related to gastronomy (wine cellars and small-scale agricultural operations owned by the authority, etc) are included in this category, so long as they are establishments that are directly managed or controlled by the authority. 4.2.2.9 - Establishments for health or social purposes A number of authorities (in particular communes and general councils) provide services in the health and social area, either through different types of financial assistance, or by financing dedicated bodies. Only the dedicated bodies are taken into account in the context of the Bilan Carbone, even if, most of the time, they are administered in cooperation with government organisation (such as hospitals) or subsidised private organisations. The scope will therefore cover: Retirement homes, or activities to assist the elderly, Establishments for handicapped people, Child-care facilities and nurseries, Hostels, Social welfare community centres, Specialised health-care centres (drug addiction, alcoholism, HIV), Organisations for local development and social insertion assistance. Depending on the context, hospitals may also be included in this category, if the authority is considered to play a predominant role in the financing or operational control of the hospital. 4.2.2.10 - Green spaces Green spaces covers all natural or semi-natural spaces where the authority has a direct or strong indirect ability to intervene (ownership, maintenance or operation). This includes, in particular: 2001-2010 - Methodology Guide - Version 6.1 56/116

gardens (public or botanical) and, by extension, municipal zoos if they exist, state forests and woods; this will include people visiting the wood or forest and its exploitation, even if the latter has been transferred to a third-party entity such as the national forestry commission (ONF : Office National des Forêts ), all road-side ornamental plantings, including avenues of trees, greenhouses and nurseries used to supply the above places, protected coastal sites and maritime areas placed directly under the authority s responsibility, watercourses and lakes (management, maintenance, etc), outstanding natural sites directly owned and/or managed by the authority (mountains, caves, etc). In all these situations, it is clearly the related human activities that will be taken into account, and the fact that these are green spaces does not in any way exclude emissions that are, for example, the result of: travel by maintenance staff, operational staff, or visitors, energy for running buildings (greenhouses, operational premises, offices, staff accommodation where appropriate, etc), necessary flows of material (additives, for example), related freight, where appropriate, emissions relating to the use of fertilizers, etc. Remember that the Bilan Carbone methodology expressly excludes sinks, except in the case of construction timber with a long life (1 century or more) from properly managed forests (see 2.3). 4.2.2.11 - Highways Highways refers, in the broadest sense, to everything that relates to the transport infrastructures whose effective management, and especially maintenance, is performed by the authority. In theory this can cover both road transport and other methods of transport, provided that the authority exercises a direct influence on its management or financing (port and airport complexes, stations and railways, etc). In contrast private parking areas and access roads are excluded from this group, except in exceptional cases. Two types of authorities are especially involved in managing highways: communes, for the roads, boulevards, avenues and byroads, departements for departemental and national routes (including engineering structures), Urban motorway and national motorway interchanges are also included when they are maintained by an authority. It is important to note that, in accordance with what was stated in 2.3.3, emissions for highways only concern emissions generated by constructing and maintaining these infrastructures. The emissions related to the use of the infrastructures, i.e. resulting from fuel consumed to transport people or goods, are not taken into account in the authority approach. 2001-2010 - Methodology Guide - Version 6.1 57/116

On the other hand, these emissions related to the use of the highways are accounted for in the region module, covered in 4.3 below. 4.2.2.12 - Situations not mentioned above In a country that consists of 36,000 communes, 100 departements, and a considerable number of intercommunal syndicates, intercommunalities, large city urban districts, etc, it is clearly impossible to envisage in advance all the configurations that may arise. Sections 4.2.2.1 to 4.2.2.10 therefore corresponds to services that authorities, especially communes, frequently provide, but obviously this cannot be exhaustive for all situations, and every service that the authority carries out must be taken into account. This can, for example, cover: managing a port or airport, managing an exhibition centre or a fair or trade show site, managing an economic development service, etc. If these services exist, you need to conduct the individual Bilan(s) Carbone before combining them in the total. 4.2.2.13 - Risks of overlap and double accounting As has been mentioned several times above, the approach based on services provided necessarily comprises possibilities for overlap and therefore for double accounting: emissions taken into account in the public transport service can also be taken into account for other services, in the context of travel by students of educational establishments, employees of healthcare establishments, players in the local team, etc. Similarly, emissions from processing waste, at the heart of the emissions of the waste service, can also be found in any other service s direct waste source. You should therefore be especially attentive to the risks of duplication. The table below indicates, by a cross, pairs of services for which there is a clear possibility of overlap (but the table below does not claim to be an exhaustive list). General public Water, Sports Cultural green admin. Education housing transport sewage Waste facilities facilities spaces General administration X X X Education X X X X X X X Housing X X X X X X X X Public transport X X X X X X X X Water, sewage Waste X X X X X X X X Sports facilities X X X X X Cultural facilities X X X X X Health and social X X X X X Green spaces X X X X Highways X X X X X X X X health and social highways 2001-2010 - Methodology Guide - Version 6.1 58/116

The existence of duplications means that care must be taken on reading the consolidated results for all the authority s services. Where necessary you can, with the help of suitable extractions (see chapter 6), develop a consolidation that excludes these duplicate counts. Note: for a specific area of responsibility, trying to remove these duplicate counts will not always be appropriate since it can bias the overall snapshot of the emissions of which it is the origin and consequently even have an impact on the action plan to be implemented. 4.2.3 Description of the emission sources taken into account for each service Service by service, the emission sources that will be taken into account are almost the same as those described in 3.2 for companies. We therefore recommend the reader to start by reading this chapter before consulting the items below, which are limited to defining the differences with the company approach. It should be noted, from a general point of view, that the sheet enabling the emissions from these sources (called the site sheet) is shared with the company approach. 4.2.3.1 - Energy For each activity carried out by the authority, the first source taken into account related to energy use. The variety of situations encountered will be, in principle, smaller than for companies. Nevertheless the spreadsheet also provides two identical tabs for entering consumption data, like with companies. The goal is the same: to be able to separate energy consumption into two portions if that makes the results easier to read. 4.2.3.2 - Emissions excluding energy The second source relates to fixed sources not arising from the use of energy (emanations from fertilizers, leaks from air-conditioning circuits, etc). The variety of situations encountered will be, in principle, smaller than in the case of companies producing goods or services (authorities rarely utilise industrial processes, and rarely carry out agricultural activities). As with companies, the method takes CFCs into account, since these are greenhouse gases, even though they are not in the Kyoto protocol s field of application. Their emissions are distinguished in the summaries of the results. And, as with companies, there are two identical tabs for taking these emissions into account, even though separating this source into two will be less often relevant. 4.2.3.3 - Incoming services and materials For almost all of the services provided by an authority, it will be necessary to make purchases (food for school canteens, materials for maintaining roads or buildings, linen for paramedical establishments, sports equipments for sports establishments, reactive products for the swimming pool, miscellaneous consumables, etc). Even if these purchases are not incorporated into a material production that is subsequently sold, they can potentially involve all types of material. 2001-2010 - Methodology Guide - Version 6.1 59/116

Because of that, the tab which allows the incoming flows of materials and services to be entered is identical to the tab for the companies version of the spreadsheet. On the other hand, even if the future packaging tab has been retained in order to make it easier to maintain the spreadsheet, it is assumed that an authority never sells products, and consequently never produces packaging. Rare exceptions can be imagined (for example, the envelopes for items mailed are comparable to the packaging for services provided). 4.2.3.4 - Freight An authority will generally have less freight than will be found for companies. In effect, since an authority usually does not have customers, it does not make any shipments. It can, however, have outgoing flows in some situations (a significant amount of mail, the removal of rubble during construction work, etc), but most often the flows to be taken into account will be restricted to incoming freight and internal freight. These flows are handled exactly the same as those of companies. For public transport, there are two possible ways of taking traction energy into account: either in one of the two energy sources, which can be renamed for the occasion, or in the energy of the internal freight category of the spreadsheet used for public transport. In all the scenarios, you must avoid putting travel by employees or visitors in the same source as travel by people transported. 4.2.3.5 - Travel by people Travel by people related to the services provided by an authority are likely to present the same variety as that for a company. All the flows are therefore taken into account: home-work, officials and elected officials on behalf of the authority, and visitors: road, air and sea. On the other hand, this source can generate a problem of allocation if a single journey has several purposes. For example, if someone drops their child off at school and then goes to the swimming pool, you must not count a home-school journey for the school and then a homepool journey for the swimming pool (the first part of the journey being already allocated to the school). You must therefore be especially careful about the distances to be taken into account for the visitors to the various establishments managed by the authority. The most frequent combinations of services will involve work, school and shopping, and all three of them can form stops in a single round trip starting from the person s home and ending up there. You cannot therefore always be certain that it is appropriate to use the visitor s home as the point of origin for the journey. 4.2.3.6 - Direct waste In this category we will find the same items as for the companies, as the waste emitted by a local authority s services are the same as those of a company. Hazardous waste (old solvents, old lubricants, batteries, etc) and halocarbon leaks are also taken into account. 2001-2010 - Methodology Guide - Version 6.1 60/116

4.2.3.7 - Fixed assets The emissions taken into account in the context of manufacturing fixed assets comprise the same sources as those for the companies (buildings, highways, tools and machines, computer equipment) and are managed in exactly the same way, with the choice between the actually using a depreciation over an installed base, or processing sources in annual flows. This choice of the way in which the depreciation can be handled can, of course, be applied on a service-by-service basis. 4.2.3.8 Taking the use of products or services provided into account This tab will only be used very rarely in an authority approach. The usage emissions of a service provided by the authority will be mainly expressed by emissions due to the travel of visitors (e.g. the parents who take their children to school as part of the education service provided). These emissions can be directly integrated into the travel by people tab. 4.2.3.9 Taking the end-of-life emissions of services or products sold into account Like the use of products or services source, few cases can be identified for this source. However, we can note, for example, the end of life for newspapers that are published and distributed by the authority. 4.2.4 - Summary The summary tabs are identical in every respect to those of the companies spreadsheet: you will therefore find a total, an array for handling extractions, and export tabs allowing you to use a multi-site utility or an economic utility following the spreadsheet. 4.2.5 - Special implementation cases 4.2.5.1 - Authorities administering a large number of sites With the authority approach it fairly often happens that, when the organisation is quite large, it administers a large number of sites, each of which would be eligible to conduct their own Bilan Carbone (for example all the high schools in a region). Aggregating data before entering it into the spreadsheet would certainly make it possible to obtain the impact of the service provided as a whole, but on the other hand it would not be particularly usable for an action plan, since the various establishments taken into account would then see their special features wiped out, submerged in the overall average. In order to have both information relating to each individual establishment (or each site ) and aggregated information for the entire service, we recommend the following approach: 2001-2010 - Methodology Guide - Version 6.1 61/116

each of the service s sites (for example each primary school managed by a town hall s school service) conducts its Bilan Carbone using a dedicated site spreadsheet, and therefore has its own result, a first level of aggregation (with the multi-sites utility) provides emissions for all the sites, up to a maximum of 50. if the service administers more than 50 sites, then you will need either to increase the import capacity of the multi-sites utility (which a user with a reasonable knowledge of Excel will have no problem in doing) to change it to handle to required number of sites, or else you will need to aggregate as many multi-site sheets as necessary within another multi-site sheet. This approach therefore provides you with visibility over the emissions related to an individual establishment s operation and also visibility over the emissions for the entire service. 4.2.5.2 - Pooled services In the context of the authorities approach, frequently the services that fall within the authority s jurisdiction (transport, sports, water and sewage) are in fact carried out by a delegate entity or ad hoc association, which is not restricted to the services of the authority in question (sports facilities shared between several communes, a service provider distributing water on behalf of an intercommunal syndicate, etc). In these cases the authority approach must, of course, only include that proportion of the delegate entity s operational emissions which relates to the people administered by the authority conducting its Bilan Carbone. An allocation rule will therefore need to be defined, and this rule will be a matter for the user of the method. For example, for an electricity syndicate, its operational emissions could be distributed proportionally based on the km of lines in each commune, the inhabitants served, consumptions, etc. Similarly, for a syndicate collecting household waste, the distribution key could be per inhabitant, per household (which is already quite different!), per tonnage discarded, etc. Thanks to the different functions enabling different site Bilans Carbone to be aggregated via the multi-sites utility you can therefore assign an allocation % of the delegate entity s overall emissions in the authority s overall Bilan Carbone. 4.2.5.3 - Authorities located outside Metropolitan France The limitations for the geographical applicability of the Bilan Carbone methodology were detailed in 1.4. It can be applied in other areas, subject to: - certain methodological choices being adjusted (e.g. the case of deforestation see 2.1.2). - the regional validity of the proposed emission factors being checked in an overall way, we can agree that the Bilan Carbone applies without too many changes to the countries of Western Europe and also to the French Overseas Departments and New Caledonia, for which an adjustment to the emission factors has been carried out. 2001-2010 - Methodology Guide - Version 6.1 62/116

4.3 - Region module 4.3.1 - Entities concerned by the regional master spreadsheet The development of two modules for the local authorities version corresponds to two meanings that this term local authority can have. it can refer to the local government associated with a geographical area that corresponds to an administrative level in France (commune, departement, etc), but it can also refer to all of the people and activities residing within a well-defined area (thus the term commune can refer to the territory of the said commune, together with the inhabitants and activities that it contains). The first interpretation is clearly the one that is used for the authority approach, which is the subject of chapter 4.2. So that the Bilan Carbone can be applied when the word authority has the second meaning, the Bilan Carbone also provides a regional module. This allows you to take into account a large part of the flows of energy and material that are related to the activities of the people and legal entities residing within the area, or traversing it. In its approach, this application of the Bilan Carbone is very close to a use of the companies version that considers the region to be a single site, with its own emissions and those arising from its exchanges with the outside. As a consequence, it is therefore possible to conduct the regional Bilan Carbone for any well-defined geographical area, even if its boundaries do not correspond to those of a traditional administrative level (which will be the case, for example, for a National or Regional Park, a district of a town, etc). The limitations for this type of exercise are not theoretical, but will be set by access to the data, which will clearly be more difficult for this non-standard type of regional level. On the contrary, it will not necessarily be possible to conduct the regional Bilan Carbone of an authority for which the authority Bilan Carbone can be carried out: thus, there will be no sense in applying the regional approach to a waste collection intercommunal syndicate or a rural electricity syndicate (but it will be possible for the intercommunality). Secondly, the user will notice that the emissions taken into account in the regional approach encompass a large part of the emissions for the authority approach. This is perfectly normal, since there is no reason for results of the two approaches to be integrable. In contrast, a portion of the emissions counted with the authority approach are not included in the emissions taken into account with the regional approach. This is the case for incoming materials in particular: they are taken into account for each service with the authority approach but are largely left on one side with the regional approach (see 4.3.3). 4.3.2 - Description of the emission sources taken into account This chapter lists the different sources taken into account in the regional approach. These various sources correspond to the different tabs of the regional master spreadsheet associated with the method. On principle, this list is not limited and nothing prevents you from adding one or more sources to the spreadsheet if it corresponds to a physical reality for the authority which is carrying out its Bilan Carbone. 2001-2010 - Methodology Guide - Version 6.1 63/116

4.3.2.1 - Energy industries This worksheet of the regional Bilan Carbone will allow you to take into account emissions generated by industries whose business is producing electrical or thermal power. In practice, it basically concerns emissions arising from the burning of hydrocarbons (liquid or solid) used for this activity. 4.3.2.2 - Emissions from industrial processes This will take into account greenhouse gas emissions resulting from: the use of fossil fuels for industrial processes located in the authority s territory, emissions generated by the purchases of electricity and steam produced outside the territory by the industries in question, emissions not related to the use of electricity (other chemical reactions, leaks, etc). Remember that the method takes CFCs into account, since these are greenhouse gases, even though they are not in the Kyoto protocol s field of application. Their emissions are distinguished in the summaries of the results. In addition, ADEME has developed a spreadsheet known as the industry utility, which allows a region s industrial emissions 46 to be evaluated based on a list of the companies present, their activities and, if possible, their size. 4.3.2.3 - Tertiary This will take into account all the emissions related to the use of energy in tertiary buildings (excluding industrial processes) and to these buildings non-energy emissions (essentially leaks from the air-conditioning circuits). This source will therefore cover: heating for tertiary buildings (commercial activities of all kinds, offices, and also all buildings covered by the authority approach), domestic hot water for the same set of buildings, steam purchased; in order to avoid double accounting with 4.3.2.1, this must be restricted to steam produced outside the territory electricity consumed by the tertiary buildings, and lastly the leaks from these buildings air-conditioning circuits. 4.3.2.4 - Residential This will take into account all the emissions related to the use of energy in residential buildings. The sources taken into account are exactly the same as those for the tertiary sector. 4.3.2.5 - Agriculture and fishing 46 Excluding sites subject to the 2003/87/EC Quotas Directive 2001-2010 - Methodology Guide - Version 6.1 64/116

This source allows you to take into account energy and non-energy emissions related to agricultural activities in the authority s territory: fuel (agriculture including greenhouses, and fishing) and electricity consumptions, methane and nitrous oxide emissions linked to livestock farming (enteric digestion, processing excreta, spreading) nitrous oxide emissions linked to fertilizers manufacturing inputs (fertilizers, animal feed, etc) manufacturing mechanical appliances (tractors and other machinery) 4.3.2.6 - Freight This source allows you to take into account the goods traffic taking place in the authority s territory or related to its operation, regardless of the method (road, air, rail or sea) and regardless of the direction of the journey. More exactly, the following are taken into account: emissions from so-called internal transport, i.e. with a departure point and an arrival point located inside the territory; emissions from transit traffic, i.e. with a departure point and an arrival point that are both located outside the territory. The spreadsheet limits this source s standard tables to road traffic; emissions from outgoing freight, i.e. with a departure point located inside the territory and an arrival point located outside the territory. All methods are possible for this type of journey; emissions from incoming freight, i.e. with a departure point located outside the territory and an arrival point located inside the territory. All methods are possible for this type of journey. As with companies, emission factors take account of the vehicle s capacity, its filling rate, and any criteria with a strong influence on emissions per tonne.km transported. If the detailed data cannot be accessed, the spreadsheet allows an approach by order of magnitude based on national statistics for road transport and international sea transport. 4.3.2.7 - Transporting people As with goods, the spreadsheet allows 3 types of traffic to be entered: road transit, with a departure point and an arrival point that are both located outside the territory, traffic related to residents, regardless of where they go and regardless of the method used (road, rail, air, etc), traffic related to visitors, regardless of the reason (tourism, business, family visits, etc) and regardless of the method used. 2001-2010 - Methodology Guide - Version 6.1 65/116

This source can lead to a methodological problem concerning travel by visitors. In effect, if a German tourist comes to France by plane in order to visit a number of destinations, then allocating all of the emissions related to the initial flight to the regional Bilan Carbone of each destination can be considered questionable. It can be considered legitimate to break down the emissions from the tourist s air trip from Germany to France between the various destinations in which his or her presence is recorded. If this is the case, access to external data and an allocation rule will need to be defined. 4.3.2.8 - Construction and highways This source covers new constructions undertaken over the Bilan Carbone s reference period, with a very macro approach. The main fixed assets covered in the method relates to: real estate, highways. Unlike company (and authority ) spreadsheets, in this case the source is not handled with a depreciation system. Instead it is handled based on annual flows insofar as, for most authorities, there will be an annual flow of new construction in the territory, with a surplus that is much easier to evaluate and process than stock classified by year of construction (which is essential in order to set the limit of what should be depreciated). 4.3.2.9 - Regional waste This source allows you to take into account greenhouse gas emissions related to the end-of-life processing of waste - solids or liquids - which will be produced directly by the territory that is the subject of the Bilan Carbone. The preliminary considerations mentioned in 4.2.2.6 will be equally applicable here. Furthermore it is clear that the emissions contained in this source will be more or less the same as those covered by the collection and end of life of household waste in the authority approach. This is in no way an inconvenience, as discussed in 4.3.1 above. A special note about handling waste is appended to this document. 4.3.2.10 - Producing future waste This source allows you to take into account greenhouse gas emissions generated by producing items that are thrown away by the residents. In effect, over and above the emissions occurring at the end of an object s life, any discarded object must have been manufactured, which will have generated greenhouse gas emissions. Understanding flows when (mainly) household waste is collected will allow you to reconstruct tonnages by broad categories of materials, and to deduce from these the emissions related to the production of what has been discarded. This source therefore corresponds to a small portion of an incoming services and materials source that is not shown as such (see 4.3.3). 2001-2010 - Methodology Guide - Version 6.1 66/116

4.3.2.11 - Food This source allows you to take into account - in an approximate way - the production of food consumed in the territory. In most situations, an order of magnitude will be obtained from the number of meals eaten during the way. Like the previous source, this source also corresponds to a portion of an incoming services and materials source that is not shown as such (see 4.3.3). 4.3.2.12 - Risks of overlap As with the authority approach, through its construction the regional approach contains risks of double accounting. For example, an electricity power station in a territory generates emissions that can be taken into account a second time when the electricity consumption of the actors in the territory are counted (industrial, residential, tertiary, etc) 47. Emissions taken into account at the level of industrial processes can be taken into account a second time in the emissions factors used for incoming flows for construction or transport (since the emission factors for transport includes the construction part for the vehicle). More generally, the following table indicates the more or less obvious possibilities for overlap (but this table does not claim to be exhaustive). Energy Industrial Agriculture Transporting Construction End-oflife waste waste Food Producing production processes Tertiary Residential and fishing Freight people and highways Energy production X X X X X X Industrial processes X X X X X X X Tertiary X Residential X X Agriculture and fishing X X X Freight X X Transporting people X Construction and highways X End-of-life waste X Producing waste X X Food X X X You should therefore be especially attentive to the risks of duplication throughout the investigation. Remember that the ultimate goal of the Bilan Carbone approach remains the implementation of action plans in order to reduce emissions, and that the action is always easier when a well-identified person or organisation has visibility over everything that concerns it. The fact that there are overlaps is not necessarily an obstacle to this goal, but on the other hand it means that special care should be taken before any emissions are published, as discussed in 2.4.2.4. 47 In this case things are not so simple, since a power station delivers VHV current over the network of the same name and this network is not local. Therefore its electricity production is not specifically consumed primarily by the inhabitants of the territory. 2001-2010 - Methodology Guide - Version 6.1 67/116

4.3.3 - Sources not taken into account In the absence of a suitable method and emission factors for understanding all of the incoming flows (over the territory) of goods and services, the region module of the authorities version does not currently include an overall incoming materials source, or equivalent. However, a certain number of sources give a partial view of the incoming materials in the territory, corresponding to the part evaluated in each tab that was not produced elsewhere in the territory, namely: - Producing future waste (see 4.3.2.10) that allows you to evaluate the emissions that occurred when the future waste was produced, - construction and highways, which will include the emissions from producing the steel, cement, glass and plastic used for the construction work carried out in the territory, - agriculture and fishing, which will include the emissions for producing nitrogenous fertilizers and plant protection products, - food for food not produced in the territory. On the other hand, when part of the consumption comes from production that is local at the level of the territory, then we will find some of the emissions from the production of these material goods consumed in the territory in some sources taken into account (industrial processes, agricultural activities, etc). To summarise, most of the consumption of materials, manufactured or semi-finished products, food products, and services other than transport by people and productive activities resident in the territory will not be taken into account in the Bilan Carbone s regional approach. At the national level, the production of manufactured products and food products represents more than 50% of overall emissions. This is therefore a major hole, and this should be remembered when results are interpreted: because of this and the possible duplicates, the Bilan Carbone total will usually not have an unambiguous meaning for the regional approach. Only the match between the emissions and the flows necessary for the territory s socio-economic life will offer a certain relevance. 4.3.5 - Special implementation cases for an authority located outside Metropolitan France The limitations for the geographical applicability of the Bilan Carbone method were detailed in 1.4. It can be applied in other areas, subject to: - certain methodological choices being adjusted (e.g. the case of deforestation see 2.1.2). - the regional validity of the proposed emission factors being checked in an overall way, we can agree that the Bilan Carbone applies without too many changes to the countries of Western Europe and also to the French Overseas Departments and New Caledonia, for which an adjustment to the emission factors has been carried out. 2001-2010 - Methodology Guide - Version 6.1 68/116

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5 - Error margin and reduction objectives Like all physical approaches, the Bilan Carbone supplies values that, naturally, are not completely accurate. One of the methodology s basic principles is that the uncertainty related to the results must always be explicitly shown with the results, so that readers will know what degree of confidence they can place in the results obtained. Chapters 5.1 and 5.2 below explain what is meant by uncertainty and how this is handled in the spreadsheets provided with the methodology. Moreover, the GHG emissions assessment will only be meaningful when the emissions are excessive in comparison to a balanced situation and it is related to their reduction. Therefore, by its very essence, the assessment is the first step towards an action plan in order to obtain reductions. Paragraph 5.3 describes the functions which the spreadsheets contain for handling reduction objectives. 5.1 - Definition of uncertainty There can be several definitions of what is meant by uncertainty - or an error margin - for a calculation result. Suppose, for example, that we calculate a value for which we consider the uncertainty to be 8%. This could be interpreted as significant when: the variance we find between the calculated value and any measurement whatsoever of the actual value will always be less than 8%, X% (generally 90 or 95%) of the values measured do not differ from the calculated value by more then 8%, in an extension of the above, the probability is greater than 90 or 95% that an unknown value, which can only be determined by the calculation, does not differ by more than 8% from the actual value (not necessarily measurable). In the present case, it is the last meaning that we are interested in: we need to know what the probability is that a calculated value does not differ from the actual value by more than X%, or inversely what the margin is in which we will find 95% of the actual values for a calculated value. For example, the composition of natural gas varies slightly over time; its basic component is methane but it also contains variable quantities of other gases, with longer carbon chains, having a greater calorific value per volume unit and higher CO 2 emissions per energy unit. If we measure the calorific value of one m 3 of gas 100 times we can calculate a mean value. The question is, what is the range around the mean in which we will find the nearest 95 results? If this range is ±2%, for example, then we say that the error band for the result is 2%. It relates to the 95% confidence interval around the mean: the upper and lower limits (expressed as percentages) within which 95% of the actual values vary from the mean. This uncertainty is, of course, a function of the value measured and, for a single physical flow, can vary considerably depending on the context. For example, suppose that, for people travelling by car, that we are seeking the variance between an average value of emissions per 2001-2010 - Methodology Guide - Version 6.1 70/116

km and an estimated value in the case studied. If the measurement concerns an individual journey by an individual car, then the variance from a mean value might exceed 100%. But if the estimated value itself concerns an average, for example the average emission of the vehicles used by the staff of a company with 1,000 employees to travel to work (the variable is the average emission of a group of vehicles, not the average for an individual vehicle), then the error band is probably less than 10%. The person who will use one of the Bilan Carbone spreadsheet must therefore keep this aspect of the matter in mind and must not hesitate from modifying the uncertainty coefficient for the emission factor based on circumstances. However this will require a certain familiarity with firstly the uncertainty concept and secondly the measurement of greenhouse gas emissions. 5.2 - Handling the error margin in the spreadsheets In the Bilan Carbone spreadsheets, each elementary calculation has its own uncertainty (an elementary calculation is an activity datum multiplied by an emission factor). This uncertainty for each elementary calculation will combine the estimated uncertainty for the emission factor (for example the number of carbon equivalent kgs resulting from burning one litre of fuel is assumed to be known within a 5% band as defined by 5.1 above), and the estimated uncertainty for the data selected for the calculation (expressing for example the inaccuracy with which the amount of fuel used by the company is known). The formula used is itself an approximation 48, and is defined as follows: Total uncertainty = 1 - (1 - uncertainty for the emission factor) x (1 - uncertainty for the data) Thus, if the emission factor uncertainty is 10% and the data uncertainty is 8%, the total uncertainty will be 1 - (1-10%) x (1-8%) = 17.2% This formula is clearly not suitable if the uncertainty is greater than 100%. For example, if an emission factor is known within a factor of 5 (e.g. if it is estimated to be 1, within a factor of five, that means that it can be between 0.2 and 5), it must be adjusted to a situation in which the uncertainty is less than 100% (in the example given, the emission factor will be set at 2.5, and with an uncertainty of 100% it could vary between 0 and 5). On the other hand, if an emission factor becomes conventional then the uncertainty for this value becomes zero. The uncertainties associated with the emission factors are specified in the Emission factors guide or Carbon Base guide. 5.3 - Handling reduction objectives 5.3.1 - General Principle 48 It assimilates 1-x and 1/ (1+x) for small values of x 2001-2010 - Methodology Guide - Version 6.1 71/116

Each of the master spreadsheets associated with the Bilan Carbone method (companies/authority and region) includes a function for handling the reduction objectives which the entity may set itself after carrying out the inventory of its emissions. This function is in the spreadsheet because the reduction in emissions is a necessary gateway for the future. Indeed, known scientific data means that two things can be asserted: to stop the atmospheric concentration of CO 2 increasing in the atmosphere, global emissions of this gas must be at least halved from their 1990 levels, the source of the CO 2 emissions is deforestation, concerning forests whose initial stock is known, and the burning of hydrocarbons, whose initial stock is also known. In this context, it is mathematically demonstrated that global CO 2 emissions will reach a peak, followed by a downtrend trend in emissions. There will therefore inevitably come a time when mankind s CO 2 emissions will always be less than half of the 1990 levels, even if no-one wants this. In this context, the right question is therefore not will we make cuts?, but just how can we makes cuts before it s too late?. Having a function in the spreadsheet which allows the impact of the actions you are thinking of to be expressed means that you can measure the efforts to be undertaken in order to remain alive and healthy in a world that will have to reduce its emissions significantly within the space of a few decades. And it is obvious that, as the constraint is expressed in absolute values (it is the overall emissions that must be reduced by a factor of 2 or 3 as quickly as possible, not the emissions per car in circulation or per thermos bottle manufactured), the reduction must be justified notwithstanding any increase in activity wished for as well. If we take the objective for a French authority or company to be the factor of 4, now incorporated into law, then the ultimate goal is not to reduce emissions by a factor of four for each pair of shoes made, coffee-machine manufactured or bus-ticket sold, without taking into consideration any planned increase in activity. Instead it is to reduce emissions by a factor of four for the authority or company taken as a whole, taking into account any possible increase in volumes or economic activity. As we have seen above, the constraint of halving overall CO 2 emissions will end up being applied any way. As a consequence, if the entity that has just conducted its Bilan Carbone makes no provision for reducing its own emissions by a factor of two to four within the timescale given for the world as a whole (including the foreseeable rise in production, or the population in the case of an authority), then this just means - this is a purely arithmetic result - that others will have to reduce their emissions by even more than a factor of two to four in the time-scale taken into account. It is therefore essential that the reduction objectives are compatible with an increase in production considered elsewhere. If these two are not compatible, then there is a case for asking whether the plan that envisages an increase in production is viable in the long term given the constraints that will be applied in any case to the physical world that surrounds us. Given this, such a reduction objective always corresponds to an argument linked to concrete actions. The right order in which to consider the matter is therefore to start by thinking of the actions that might reduce the emissions (for example, reducing plane journeys, or the amount of plastic used to make a bottle) and then to calculate what that represents in terms of savings with respect to the initial source. 2001-2010 - Methodology Guide - Version 6.1 72/116

5.3.2 - Due dates and values Once the principle of defining the reduction in absolute value has been established, then you need to identify exactly by how much, and by when, the entity studied must make cuts. The Bilan Carbone presents no standardised approach for either of these: the only condition to be satisfied is for the action plan to make sense with respect to the constraint, without avoiding it. To help frame the review, the master spreadsheets allows you to set objectives with two time scales ( short term and long term ), deductions in two steps being a current practice in progress approaches. Everyone obviously remains free to define short term and long term as they understand it, depending on what will be most relevant in the context of the entity that has conducted its Bilan Carbone. 5.3.3 - Handling in the spreadsheets From a concrete point of view, this feature for handling objectives is presented in the form of a set of small tables on the right of the tables for entering activity data in the master spreadsheets. Every elementary calculation (an elementary calculation is an activity datum multiplied by an emission factor) can be the subject of a reduction objective, calculated as an absolute value from the reduction percentage specified by the user. This gives what is called a unit reduction, expressed in carbon equivalent kg. All the unit reductions are then accumulated, by source (e.g. for everything related to incoming freight), then by tab and finally by spreadsheet. For each aggregation, graphs allow you to very quickly see the impact of a given decision on the complete field of investigation. It must be noted that the result of the efforts is not necessarily proportional to the importance of the source. In effect, in the short term it can be easier to reduce a secondary source by 80% than a primary source by 10%. More generally, a reduction that is easy to obtain can be more significant, in absolute values, for a secondary source than for a primary source. This breakdown of the possible efforts by source helps to establish the priorities for action. If an outside consultancy conducts the Bilan Carbone, then this function provides an ideal opportunity to bear witness, naturally conveying the change in going from measurement to action. Note in this respect that switching to action depends above all on the existence of an internal management structure, which will be able to provide continuity after the person carrying out the Bilan Carbone has moved on and which will be able, in the long term, to put in place working groups and deeper coverage, etc. Conversely, if there is no Mr. Greenhouse Gas Effect (or Mrs) in the entity audited, which will be a common situation before the investigation starts, one of the objectives arising from the Bilan Carbone is for this function to exist. The existence of the reduction objectives feature, which naturally raises the question of identifying who will draw up the action plan and then follow it, increases the probability of managing to create this function. 5.3.4 - Precautions to take in defining reduction objectives When reduction objectives are defined, there are two types of room for manoeuvre that are traditionally investigated: 2001-2010 - Methodology Guide - Version 6.1 73/116

doing less, i.e. reducing the physical flow, without affecting its nature. This will be the case, for example, if you use a certain type of plastic, and do what is necessary to reduce the quantity used (and, as a consequence, the emissions related to manufacturing this plastic), without changing the type of plastic used. doing something different, i.e. retaining a physical flow with the same volume, but a different type. An example of this second scenario will be illustrated by a change in the quality of the plastic used, in order to choose a plastic whose manufacture generates fewer emissions without necessarily changing the quantity used. In practice, only the first method is almost completely free of adverse effects. Reducing a flow in itself rarely generates an increase in others just for this reason, and moreover this action does not stop the others from doing the same. In contrast, recourse to substitution is sometimes limited by the possibilities for the latter. For example, at constant volume replacing fossil fuels by biofuels (changing the type without changing the volume) is an action that cannot be repeated for all users of fossil fuels. Similarly, at constant volume it is not possible to replace all the fossil electricity currently used in the world 49 by carbon-free electricity, etc. In practice, that means that the first to use a substitution-type of room for manoeuvre preempts a possibility that will end solely because it is available for everyone else. For example, if there is a limit to hydroelectric electrical production in France, this means that the first ones to use this source make it impossible for others to do the same, since the whole world cannot be served just with this method of production. It is important to remember this distinction, which has a significant methodological impact, at action plan time. In effect, the primary margins can be recommended without needing to know the intentions of the other actors, whereas this is not the case for the secondary ones. 49 This represents almost 2/3 rds of the electricity produced worldwide, 40% of which is produced using coal, 20% gas, 5% petrol; the remaining 1/3 rd is equally split between nuclear and hydroelectric power; and the remainder (wind power, tidal power, geothermal power, solar power, etc) represents 1%. 2001-2010 - Methodology Guide - Version 6.1 74/116

6 - Extractions The general intention of the Bilan Carbone method is to provide the widest overview possible of the emissions that are combined with the processes used by an activity. Having an overall view is indeed essential for finding out what can possibly and usefully be done to lower emissions. In this way all the possibilities for action are spotlighted, even those that are tenuous or those that may not come spontaneously to mind. It is also the only relevant approach to get one step ahead and anticipate the effect of the various developments possible, such as, for example, increased constraints on greenhouse gas emissions or, which is identical on a micro-economic level, a significant increase in the market price of fossil fuels. Indeed, analysing or modelling the impact of a change in the price of emissions on a cost structure would be meaningless if the expenditure items affected are not fully taken into account. The default presentation of the emissions in every Bilan Carbone spreadsheet therefore takes account of every physical process involved in the activity, wherever it is, and whoever is the direct owner of the source. This overall approach is relevant for undertaking environmental management or strategic analyses. However, there are cases where we will want to: combine the results of different sites where the Bilans Carbone have been conducted independently of each other (this relates especially to companies), limit the emissions to those that fall directly within the decision-making power of a specific actor within a larger group (for example, hotel managers may want to list separately the emissions linked to processes over which they have full control), produce results formatted according to the methods established by other organisations (ISO, GHG protocol, etc), for example which only relate to the fixed or mobile sources directly owned by a local authority, only count the emissions which are added along a value chain, limit the calculations to emissions subject to the quotas directive50, limit the calculations to emissions which are not linked to a specific activity taking place in a territory (this only concerns the regions version), etc. In these cases, the emissions taken into account must be restricted to a sub-set of the total, and we talk of extractions. For example, with regard to the quotas directive, application of which is only compulsory for CO2 and emissions generated by fixed sources, the field of investigation must be reduced to this gas alone and just to the fixed sources studied. To make it extremely flexible to use, all the spreadsheets associated with the Bilan Carbone method offer as standard several extractions, which are detailed below (regardless of the master spreadsheet used). Furthermore, each spreadsheet allows one or more additional 50 The quotas directive concerns all sites that have a combustion unit of more than 20 megawatts of power (thermal). It is only compulsory to take CO2 into account. Directive No. 2003/87/EC relates to CO 2 quota trading systems. 2001-2010 - Methodology Guide - Version 6.1 75/116

extraction(s) to be defined very simply, if it turns out logical to do so taking into account the use you wish to make of the figures obtained. Whatever the extraction used (one of the standard extractions or a custom-made extraction created by the user), you must never lose sight of the fact that the purpose of a Bilan Carbone is to initiate emission reduction actions. Since an extraction is nothing less than the suppression of part of the emissions in the totals, such an operation should only take place if it can obviously make it easier to take steps. The aim of the extractions is not to produce nice graphs of the results, or even to eliminate the difficulty by removing sources for which the margins for manoeuvre are not clear; it is to facilitate the action. The appendix contains some examples of activities with the emissions that will be taken into account depending on the extraction selected. This will allow the user to gain a better idea of the difficulty there is in assembling the information needed for the calculations. 6.1 - Historic extractions The three extractions described below correspond to what used to be known as the scope used in previous versions of the Bilan Carbone method, then limited to industrial or tertiary companies only. They are categorised as internal, intermediate and global respectively, and correspond to three standard extractions of results. Local authorities can also be the subject of these extractions: in the authority version, all the sites included in the investigation can be considered to be a single site for the following, in the region version, the territory itself is considered to be a single site.² 6.1.1 - Internal extraction The most restrictive way of counting the greenhouse gases is to decide to only account for the emissions that are generated directly by you, or in your internal scope, with your fixed installations. For this, you will only account for what is output by a boiler that you own, or what is emitted by processes (including leaks from air-conditioning facilities) that take place at your own site. This approach, which limits the emissions to those concerning your legal responsibility for fixed sources, has the drawback of only making a small portion of the emissions linked to providing the consumer, or user, with a product or service visible. The exception to this is companies that are intensive energy users. It should also be noted that the emission factors used for this scope, derived from international publications (the United Nations Environment Programme, IPCC), and the object of much work, allows you to keep a relatively rigorous count of emissions. Thus, this internal extraction will be limited to: emissions resulting from the use of fuels in the premises of the entity or activity audited (essentially, industrial processes and heating premises), emissions not linked to combustion (chemical reactions other than combustion 51, evaporation and leaks) which occurred in the premises of the entity audited. 51 Combustion is in fact a chemical reaction! 2001-2010 - Methodology Guide - Version 6.1 76/116

Emissions linked to heating are taken into account regardless of whether the boiler is directly owned by the entity or not. Note that, with this convention: if the company purchases electricity produced by an external supplier using coal, gas or petrol, then the corresponding emissions will not be taken into account in this internal extraction, if an entity produces its electricity itself by burning coal, gas or petrol on-site, then the corresponding emissions will be taken into account. This approach can therefore give rise to misleading results with respect to margins for manoeuvre. Indeed, consider the case of a company that outsources part of its production that uses steam. Physically the emissions will be the same if the steam is produced using the same process, even though in the internal extraction they have disappeared. To put it more clearly, with this approach outsourcing the source gives the impression that you have got rid of the problem, whereas you have done nothing of the sort. The fundamental purpose of this internal scope is just to supply useable figures after potential re-processing for the heating if the boiler is not owned for the regulatory obligations where the accounting is limited to the fixed sources owned (all greenhouse gas taken into account). It does not, however, allow you to obtain the broader view that is desirable for informed actions with respect to environmental management. You are therefore strongly advised to never rely solely on this internal extraction for an objective view of the situation. 6.1.2 - Intermediate extraction To some extent this extraction is the counterpart of added value in economics, i.e. it allows you to calculate totals that can be added without double accounting (without counting the same thing twice) all along the production chain for a product or a service, when several companies or administrations are successively involved. This approach still does not allow you to determine all the emissions that occur upstream or downstream of the site audited, but it does take transport into account in particular, which is very prominent in the total greenhouse gas emissions in Europe. For this intermediate extraction, the following are taken into account: the internal use of energy from combustion (industrial processes, heating premises, fuel bought directly), the emissions not linked to combustion (chemical reactions other than burning hydrocarbons: decarbonation, evaporation, leaks, etc) which occurred on site, the emissions generated by electricity or steam purchases (emissions that will therefore occur at the energy producers ), including line losses, the transport of goods internal to the site (for example, a lorry that transports goods between the production line and a warehouse if both buildings are within the scope investigated), home work travel by employees for the company or authority module, the emissions linked to employees travel during working hours for a company or an authority, 2001-2010 - Methodology Guide - Version 6.1 77/116

travel by residents for a territory, freight to customers for a company, outgoing freight for a territory, travel by customers or users to the site for a company or an authority (a major source for superstores or educational establishments). This approach is designed for aggregations: you can easily obtain the emissions for a much larger whole (a town, a group of industrial companies, etc) just by summing the intermediate emissions of the various entities. By doing this, there is no possibility of counting the emissions described above a second time by carrying out the inventory for another company, provided, however, that transport companies and energy industries are left outside the scope of this sum. Here is a practical illustration of the advantage of this method: in order to obtain the emissions for the manufacturing classroom chairs sector, and thus the quantity of greenhouse gas generated by manufacturing one chair, you just need to sum the intermediate emissions (pro-rated according to what you will find in the chair, of course) of the steel producer, then the manufacturer producing chairs from steel tubes, then the distributor of chairs, and then the scrap-metal dealer for the end of life of the chairs. you will obtain a total without counting the same thing twice. Then by dividing the sector total by the number of chairs you will be able to obtain the greenhouse gas content per chair. That is one of the useful applications which will be possible when the practice of counting your emissions is more wide-spread. Incidentally, as of this scope we will place on an equal footing the companies whose goods are shipped with lorries that they own themselves, and companies whose goods are carried by external service providers. On the other hand, as we will see later, these emissions can still only represent a small portion of what occurs elsewhere and yet is necessary for the existence of the site audited. 6.1.3 - Global approach Lastly, you may wish to know all the greenhouse gas emissions associated with the physical processes that are necessary for the operation of the site examined. For reasons explained above, it concerns the standard consolidation of emissions in the spreadsheets provided since, once again, this is what is most relevant for environmental management or strategic analysis. In this overall approach, all the sources mentioned in chapters 4 to 6, depending on the entity in question, are taken into account. With this approach, there will be maximum visibility and it will be possible to estimate the consequences in terms of greenhouse gas emissions for almost all of the actions decided by the entity conducting its Bilan Carbone: where the activity is located (which influences the method(s) of transport available for the employees or customers, and the distances they will have to travel, and therefore the emissions arising from this), choice of materials purchased (the emissions per tonne of material can vary from one extreme to the other), choice of methods of transport used for freight, 2001-2010 - Methodology Guide - Version 6.1 78/116

choice of electricity supplier, range of products sold, unit consumption, recyclability, etc, choice of packaging, choice of hours, conditions dictated to the suppliers, etc. Warning: this scope integrates the emissions of gases which are not covered by the Kyoto protocol but for which there is sufficient knowledge available to be able to establish emissions factors (e.g. CFCs, emissions for planes excluding CO 2, etc). You must therefore be very prudent when comparing different inventory methods other than the Bilan Carbone with the results of this global scope. Details about the difficulty of this exercise are given in particular in the explanations in chapters 2.1.1 and, especially, 2.4.2.4. 6.2 - Other extractions These extractions apply equally to the various versions and modules of the Bilan Carbone. 6.2.1 - Directive extraction The directive extraction limits the emissions taken into account to those coming from fixed sources owned by the entity, and solely for CO 2. In the Bilan Carbone, this extraction is not dependent on whether the site is eligible or not in the context of the European quotas directive 52. Given that, for those that are eligible, this extraction corresponds exactly to the emissions to be declared. For the region version, this extraction corresponds to the total emissions of CO 2 from the territory s fixed sources (without there being the slightest link with the sites that are subject to the directive). The advantage of the Bilan Carbone, in such a case, is not to allow you to carry out a regulatory calculation easily. The advantage of the Bilan Carbone is that it makes it possible to compare emissions taken into account in the context of the quotas directive with those taken into account in the overall approach previously mentioned. It will show whether or not any emissions possibly declared as part of the directive represent a substantial portion of the total emissions associated with the activity of the site audited. 6.2.2 - Extractions according to ISO 14064 work ISO (the International Organisation for Standardisation) is the largest standardisation organisation in the world. Its main activity is to develop technical standards, but these also have important economic and social aspects. The ISO 9000 (for quality) and ISO 14000 (for the environment) series are among the most successful of the ISO standards. 52 This is directive 2003/87/EC dated October 13 2003, transcribed into French law in the National Quota Allocations Plan ( Plan National d Allocations de Quotas : PNAQ). 2001-2010 - Methodology Guide - Version 6.1 79/116

ISO 14000 does not contain quantitative objectives in itself, but encourages the sites that are certified to adopt quantitative objectives and a system for monitoring the progress of the results. If the objectives include monitoring and controlling greenhouse gas emissions, and if a part of these objectives are part of a public communication, it is important that any figures communicated are constructed transparently and, clearly, by following rules that are the same for everyone. It was so as to move in this direction that ISO drew up a standard, 14064, for accounting for greenhouse gas emissions. Since ISO is the industry benchmark for standardisation (that s even its goal!), the Bilan Carbone method s spreadsheet also offers, as standard, extractions covering the scopes proposed in standard 14064, published in March 2006. 6.2.2.1 - ISO scope 1 extraction This extraction corresponds to the narrowest scope of the ISO standard, limiting the emissions taken into account to sources directly owned, whether fixed or mobile. Unlike the approach based on physical processes provided by the method s traditional extractions, without regard to ownership, the ISO scopes place prime importance on the ownership of the source, which is used throughout as the determinant for consolidating the emissions. For this ISO scope 1 extraction, the following will be counted: emissions resulting from the use of fuels on site (essentially, industrial processes and heating premises, but based solely on sources owned 53 ). By extension, in the region module all the emissions from combustion in a fixed installation inside the territory. emissions not linked to combustion (chemical reactions other than combustion, evaporation and leaks) which occurred from sources owned by the entity audited. By extension, in the region module, all the emissions not linked to combustion and coming from a source located inside the territory (especially those from agriculture). emissions generated by the fleet of vehicles directly owned by the entity, regardless of what is transported and the reason for the transport. On the other hand the emissions linked to producing the electricity used by electric vehicles are not taken into account. By extension, in the region module all the emissions from combustion in a mobile source inside the territory (internal freight, transiting freight) or which can be can identified as owned by the territory (citizen vehicles, bus). Like the internal extraction of the traditional scopes, this ISO scope 1 is not suitable for having a broad view of the situation, for either environmental management and strategic analysis. 6.2.2.2 - ISO scope 1+2 extraction The ISO extraction 1+2 of course covers the sources included in scope 1, with the addition of the emissions of scope 2: purchases of electricity and steam, including transport operated in the case of electricity. As a result, the list of sources taken into account becomes: 53 Thus emissions related to heating will not be taken into account in this extraction if the entity does not own its boiler but instead rents premises including utilities in a building shared with others. 2001-2010 - Methodology Guide - Version 6.1 80/116

emissions resulting from the use of fuels on site (essentially, industrial processes and heating premises). By extension, in the region module all the emissions from combustion in a fixed installation inside the territory. the emissions generated by electricity or steam purchases (emissions that will therefore occur at the energy producers ), including line losses, and, for electricity, even if it is used for a mobile source. By extension, in the region module the emissions relating to use of steam or electricity within the territory that was produced outside the territory. emissions not linked to combustion (chemical reactions other than combustion, evaporation and leaks) which occurred in the premises of the entity. By extension, in the region module, all the emissions not linked to combustion and coming from a source located inside the territory (all the agricultural sources, in particular). direct emissions generated by the fleet of vehicles directly owned by the entity, regardless of what is transported and the reason for the transport. By extension, in the region module all the emissions from combustion in a mobile installation that does not leave the territory (internal freight, transiting freight) or which can be can identified as owned by the territory (citizen vehicles, bus). 6.2.2.3 - ISO scope 3 extraction The emissions taken into account in the ISO scope 3 boundaries are almost the same as the overall emissions of the Bilan Carbone method. The main difference is that the emissions of greenhouse gas which are not covered by the Kyoto protocol are not taken into account in the ISO scope (see 2.1.1) whereas they are taken into account in the Bilan Carbone s global scope. Everything else is identical. 2001-2010 - Methodology Guide - Version 6.1 81/116

7 - Bibliography The present bibliography has not been modified and remains identical to the version 5.0 of the Methodology Guide of January 2007. A large number of initiatives have been developed internationally since then. 7.1 - General bibliography 7.1.1 - Documents published by IPCC Amongst other documents, the Intergovernmental Panel on Climate Change (IPCC) has published methodological documents on calculating greenhouse gas emissions, and in particular the IPCC Manual for National Greenhouse Gas Inventories (1996). These documents are designed to count national greenhouse gas emissions, but they also contain useful information for private use. They can be downloaded from www.ipcc.ch These documents are not very easy to use, and we suggest that you refer to them only when you have become familiar with the approach that we propose. Many of the figures shown in these publications are covered in this document. Above all the IPCC publishes documents that give an idea of the current scientific consensus regarding climate change, its causes and its consequences. The full IPCC reports can be consulted on-line at www.ipcc.ch, and printed copies can be purchased from the Cambridge University Press 54. These documents (in English) are highly technical, and will be of more interest to academics, researchers and consultant engineers. Summaries of these IPCC reports can be downloaded from the IPCC site (www.ipcc.ch) in many different languages, including French (complete reports are only available in English). 7.1.2 - Documents published by CITEPA CITEPA (Centre Interprofessionnel Technique d Etude de la Pollution Atmosphérique) is the French organisation responsible for conducting greenhouse gas emission inventories (see 7.2.5). As described in 2.1.1, these exercises differ from the Bilan Carbone in the range of sources and GHGs taken into account. Its own website (www.citepa.org) has various summary documents available for downloading, in free access. The complete reports generally have to be purchased. 7.1.3 - Documents published by ADEME Bilan Carbone, Emission factors guide - Version no. 6, ADEME, 2009 Emissions de polluants et consommation liées à la circulation routière (Emissions of pollutants and consumption linked to road traffic), ADEME, 1998 54 http://uk.cambridge.org 2001-2010 - Methodology Guide - Version 6.1 82/116

Transports, Energie, Environnement, Quels enjeux? (Transport, Energy, Environment, What stakes?) ADEME, 2000 7.1.4 - Documents published by other French organisations Bilan et gestion des Gaz à effet de serre dans l espace rural, Comptes rendus de l Académie d Agriculture (Assessing and managing Greenhouse gases in rural areas, Reports by the Académie d Agriculture), vol. 85, 1999 7.2 Other documents on greenhouse gas emission accounting 7.2.1 - Guidelines for Company Reporting on Greenhouse Gas Emissions, Department of the Environment, Transport and the Regions (United Kingdom), 1999 This method, published by the United Kingdom Department of the Environment, Transport and the Regions, was the first method designed for use by companies (June 1999). It is no longer available. It was published as a manual for use by companies, more or less equivalent to the manual accompanying the spreadsheet developed with the present methodology, and which enables a company to calculate: internal emissions (energy, heating, electricity, leaks, non-energy emissions from processes), the transport of goods to customers, work-related travel by employees, with an incentive (but no method) to take home-work travel into account. This method does not include the ideas of scopes and extractions: it simply encourages users to go as far as possible in the approach. The advantage of this document was the fact that it was fairly educational, and was clearly intended to be understood by everyone. Remember that the British context is slightly different, since electricity makes a much greater contribution to greenhouse gas emissions than in France. The man drawbacks of this guide were the fact that transport was only partially covered (since home-work travel and travel by visitors are not taken into account, which means that a large source will not be taken into account for tertiary activities), and above all the fact that purchases of materials and waste, direct or indirect, (packaging) were not included Thus there was no global approach, the only one making forward planning possible (the only one allowing you to correctly internalise a carbon tax, for example). This means that the calculated results do not necessarily facilitate strategic reflection about the company s activities in 10 or 20 years time. 7.2.2 - The GHG Indicator: UNEP Guidelines for calculating greenhouse gas emissions for business and non-commercial organisations, United Nations, 2000 2001-2010 - Methodology Guide - Version 6.1 83/116

In essence, this method is very similar to the previous one and takes more or less the same sources into account; it also dates from a similar period (Autumn 1999). On the other hand, its presentation is drier and therefore addresses a more knowledgeable audience. It is slightly more extensive that the method mentioned in 8.2.1 with regard to emission factors, but it does not include the notion of extractions either, nor does it take into account all of the processes necessary for the activity. 7.2.3 - GHG Protocol The GHG protocol is an initiative by private companies and NGOs 55, aimed at creating an international standard on greenhouse gas emission accounting rules. The working documents can be downloaded on the site www.ghgprotocol.org. In comparison with the Bilan Carbone, the main differences are as follows: the GHG Protocol proposes emission accounting rules (the equivalent of this methodological document), but is much more succinct on the basic rules for an emission inventory (chapters 1 and 2 of this document), which are not explained, in the other hand, the GHG Protocol s methodological document contains a number of recommendations for conducting an inventory, but these are a summary of the standard rules for any audit project (such as having your results checked by a third-party!), the GHG Protocol does not have an equivalent of the emission factors guide, leaving it to the users to build up their own database, consequently, the GHG Protocol does not provide an integrated tool (such as the method s spreadsheets) with factors already filled in, the GHG Protocol provides partial general spreadsheets, covering some steps and/or some sectors, but these spreadsheets are sometimes only a skeleton without the information needed for the calculation (e.g. emission factors), and when the emission factors are included (e.g. for transport) the level of detail is noticeably less than in the Bilan Carbone (for example, there is only one emission factor for transport by lorry, with no possible approach by tonnes.km), the GHG spreadsheets contain no mode handling uncertainty or reduction objectives, more generally, GHG Protocol focussed above all on drawing up accounting principles, which the Bilan Carbone method allows the rest to follow (or not) according to its own objectives. To be brief, we could say that the GHG Protocol is aimed at creating an accounting plan adopted by everyone, while the Bilan Carbone method primarily wants to make it possible to implement an approach in a reasonable length of time. An accounting plan is certainly necessary, but it also requires a software tool, even as a simple spreadsheet, and the development of a database. 7.2.4 - GEMIS 55 the 2 main NGOs are the World Resource Institute and the World Business Council for Sustainable Development 2001-2010 - Methodology Guide - Version 6.1 84/116

GEMIS (Global Emission Model for Integrated Systems) is a software application running under Windows, developed in 1987 by the Öko Institut, a German research centre based in Fribourg and specialising in ecology. GEMIS is freely available for downloading at www.oeko.de/service/gemis/english/download.htm GEMIS means you can have information on various energies and gaseous emissions, including greenhouse gases, for: fossil fuels, electricity, base materials, transport. The values used are calculated or estimated based on life-cycle analysis. GEMIS can also provide economic data. 7.2.5 - Cadastral approaches Estimating greenhouse gas emissions at the level of a territory is sometimes carried out using tools and methods known as emissions cadastre. One of the main methodological characteristics of this type of approach is to take into account the geographic location of the origin of the emission. Thus, emissions whose origin is not located in the territory that is the subject of the analysis are not taken into account. These estimates are generally the subject of a cartographic representation of the emissions. This methodology (a more comprehensive analysis comparing it with the Bilan Carbone is currently underway) enables at least two objectives to be reached: - to make it easier to add together the results for different cadastres, whether at local, regional or even international scale (especially in the context of the Kyoto protocol). - to locate the main sources of direct greenhouse gas emissions in a territory. These estimates are mostly (but not exclusively) performed by the Air Quality Monitoring Agencies (Agences de Surveillance de la Qualité de l Air: ASQA) at local levels, or by CITEPA at the national level. Pursuing different objectives, and based on a specific methodology, the results obtained through an emissions cadastre will generally be very different from those that can be obtained with a Bilan Carbone for the same territory. As they reflect very different methodological choices, you should therefore avoid making too rapid a comparison of the results from these approaches ( 2.1.1) 7.3 - For more information on the greenhouse phenomenon All the preceding bibliography elements solely concern the way of evaluating greenhouse gas emissions. The following elements are for those who wish to learn more about the technical aspects of measuring greenhouse gas emissions. However, neither this method nor the bibliography proposed contain explanations about the physical phenomenon of climate change. If you want to know more about the greenhouse effect, or more precisely the greenhouse effect of human origin, whether it is a serious threat for our species or not, and what might 2001-2010 - Methodology Guide - Version 6.1 85/116

happen if no effort is made to significantly reduce the emissions, you can consult the following sites. The following links are educational resources, not calculation methods. The ADEME website, which also contains links to many non-specialist sites: www.ademe.fr, section greenhouse effect. The CNRS website, which provides a portal towards many other non-specialist sites: www.cnrs.fr/cw/dossiers/dosclim The IPCC website, where you can download the summaries for policy makers (the other documents available are generally a bit difficult for an initial contact). 2001-2010 - Methodology Guide - Version 6.1 86/116

APPENDIX I: Bilan Carbone and waste 1. Introduction This appendix is designed to respond to demands from actors concerning the aspects related to waste in the Bilan Carbone. The objective is therefore to provide the main technical and methodological insights on this issue. Special attention is paid to conducting a Bilan Carbone for waste management activities. Therefore the following are concerned, as a priority: o Entities whose function is handling waste, o Local authorities waste services. These perspectives are based in particular on the guide for applying the Bilan Carbone to waste management activities produced by the RECORD association 56. Some elements derived from this work are presented as is, while others are presented with a few additional details (see part 3). 2. Main calculation conventions: 2.1 CO2 of biomass origin In accordance with IPCC s recommendations, CO 2 emissions of biomass origin linked to waste management activities are not counted. Therefore, the following are not included in the assessment: o in incineration, CO 2 emissions generated by burning fractions from biomass (food waste, paper, cardboard, wood, etc), o in storage, CO 2 emissions generated by the decomposition of organic waste or the burning of biogas, o in composting, CO 2 emissions generated by the decomposition of waste, o in methanisation, CO 2 emissions generated by the decomposition of waste or the burning of methane generated by the decomposition of waste. In contrast, the following are included: emissions of CO 2 of fossil origin (fuels, plastics, etc), N 2 O (incineration, composting, etc) and CH 4 (methane and biogas leaks during storage and biological processes etc). 56 Association of business people, public powers and scientists for carrying out research programmes into waste management. 2001-2010 - Methodology Guide - Version 6.1 87/116

With respect to the Global Warming Authorities, the values from the latest IPCC reports are taken into account. 2.2 Sequestration Some waste management systems can be considered to sequester a portion of the biomass carbon contained in the waste (storage, composting, etc). This sequestration is taken into account in accordance with the latest recommendations from the IPCC (IPCC 06). The emission factors of the Bilan Carbone spreadsheet relating to storage integrate a sequestration portion directly. Caution: for the cases in question, this issue must be associated to very great transparency in communicating results. The stakes of sequestration are high and the debate is still open on how they are to be taken into account. 2.3 Emissions linked to incoming materials Taking incoming flows into account assumes that the entity benefits from processes that occurred elsewhere and led to greenhouse gas emissions. It can be debatable whether the waste facility operator can considered a beneficiary of the production of the waste in question, and to allocate the emissions related to the production of the waste that it handles in the operator s Bilan Carbone. The European framework directive 2008/98/EC of November 18 2008 defines waste as: any substance or object that the holder discards or intends to discard. While this regulation is very clear in its explanation, it may however pose significant problems in implementation given the practical difficulties in defining when an item of waste stops being waste. In practice, it may prove to be difficult, especially for the Bilan Carbone of certain activities in the recycling chain, to distinguish between flows of waste and flows of substances necessary to the entity s operation (there would be no waste management activity if there was no waste). A concrete recommendation (especially for recycling operations) might be apart from the manufacture and use steps for the products to count the emissions of the steps upstream of the entity whose Bilan Carbone you are carrying out. Thus, for example, for a waste sorting centre the incoming materials would solely cover the emissions related to collecting the waste (transporting the waste to the sorting centre being counted as incoming freight ). For the Bilan Carbone of a plastics regenerator, for example, or a paper-maker using old paper, the incoming materials would cover the various emissions for collection and transport, as well as those of the waste sorting centre that processed and prepared the material extracted from the waste. NB 1: Given the stakes concerning this convention and the following one with respect to taking recovery operations into account (they can in certain cases lead to the illusion that producing more waste would be a means of reducing GHG emissions, see below), special attention must be paid to interpreting and drawing conclusions from the quantitative results of 2001-2010 - Methodology Guide - Version 6.1 88/116

a Bilan Carbone for waste management activities. Part 4 of this manual covers these precautions of interpretation. NB 2: although it is not very frequently performed for the assessment of entities whose function is waste management, counting the carbon content of the waste also offers advantages. In effect, this approach allows you to highlight the entity s degree of dependence with regard to the incoming raw material, mainly for activities related to recycling. This dependence can, for example, express the economic fragility of a subsidiary that may see a reduction in its supplies of raw materials to be recycled. It can also allow you to get to the evaluation of waste production preventive actions. This production emissions accounting can prove to be especially difficult for certain waste flows where the precise origin is not known (organic waste, new or recycled materials, etc?) and entail some questions (take usage phases into account, etc?). 2.4 Taking recovery operations into account General information From an overall point of view, the Bilan Carbone takes into account the recovery (energy and materials) related to processing waste. For the specific waste management activities, this inclusion means that: o the different conceivable processing modes can be made perfectly comparable, o the quantitative assessment can be carried out solely on the waste processing function and not on a dual function of processing waste and producing secondary raw material or energy, o the action levers related to optimising recovery can be identified. These avoided emissions related to recovery operations should be specifically and separately accounted for. By convention, the avoided emissions are considered to be equivalent to the emissions that would have been required to produce the same quantities of energy or raw material according to standard production methods (average local energy system, production from new material). In order to avoid confusion, the avoided emissions related to recovery must be presented separately from the other sources and must not be deducted from other emissions of the entity. Furthermore, special care is required when conducting consolidated assessments that include several links in the same recovery chain so as to avoid any risk of duplication. Main recommendations for counting avoided emissions for energy recovery o If the entity in question produces electricity or heat from the waste it receives, then in its Bilan Carbone it evaluates the emissions avoided through energy recovery and includes them in the source Emissions averted/savings claimed. 2001-2010 - Methodology Guide - Version 6.1 89/116

o Only the energy actually resold, or else used in a process outside the scope of the Bilan Carbone carried out, can be counted as avoided emissions. The own-consumption of energy is not taken into account in the assessment. o Therefore the entity must begin by evaluating the quantity of energy resold, in kwh for electricity or heat, and in weight or volume for fuels. o In the case of electricity redistributed over the French grid, or used in the context of an activity outside the scope of the Bilan Carbone carried out, by default the average emission factor for electricity in France will be used, i.e. 23g C eq/kwh, 57 o In the case of heat, the local context must be taken into account in order to determine what source this energy is replacing. By default, the average emission factor for heat production in Europe will be used, i.e. 76g C eq/kwh. 58 o For fuels that are resold (cleaned biogas redistributed over the natural gas network, for example), the emission factor associated with the fuel replaced will be used, as shown in the Bilan Carbone emission factors guide. Main recommendations for counting avoided emissions for material recovery (recycling) The entity in question evaluates the emissions avoided through material recovery (recycling) and includes them in the source Emissions averted/savings claimed. o For a company whose function is not waste management : The fundamental principle consists of considering that the waste sent for recycling enables a substitution in the production of materials, in the same proportion of new and recycled materials as that found in the materials entering the entity. Avoided Emissions EF = EFav = EFr EFin = EFr (%new*efnew + %r*efr) = %n*(efr-efnew) Where: EFin = emission factor for the incoming material EFnew = emission factor for 100% new material EFr = emission factor for the recycling procedure = production emission factor for 100% recycled material %new = proportion of new material in the incoming material (%new +%r = 1) %r = proportion of recycled material in the incoming material (%new +%r = 1) o For a waste management entity, if it sends waste to be recycled (scrap-iron from an incinerator, materials output from a waste sorting centre, etc). The emissions factor to be associated to this activity is therefore EFav= EFr-EFnew. The same rule applies to entities processing organic waste and the associated compost. o If the entity is a recycler then in its Bilan Carbone it can evaluate the emissions avoided through energy recovery by awarding a benefit for the 57 Source EDF/ Detail in the emission factors guide 58 Source AEA Technology, Waste management options and climate change, 2001 2001-2010 - Methodology Guide - Version 6.1 90/116

amount of secondary raw material marketed. The emissions factor associated to this action is EFav = -EFnew. In addition, it of course includes the various direct and indirect emissions for its process (EFp). Below is a diagram of a simplified example illustrating a recycling subsidiary where: The sorter separates the waste into homogeneous batches of waste. The recycler transforms waste into secondary raw material. The user incorporates the secondary raw material in the production of its own product. WHERE: EFp = Emission factor for the process EFnew = 1000 EFr = 400 (of which 10 for phase 1, 100 for 2, 290 for 3) 1 Collector EFin = 0 EFp = 10 EFav = 0 2 Sorter EFin = 10 EFp = 100 EFav = 400-1000 = -600 3 Recycler EFin = 100+10=110 EFp = 290 EFn = -1000 4 User EFin = 110 + 290 = 400 EFp = X EFn = 0 3. Open methodological options This chapter covers a certain number of open methodological assumptions. The company conducting its assessment must decide about these according to the objective of its process. Two alternatives are offered each time. Either one can be implemented, but you need to know and decide exactly what you are seeking to do and to formulate the conclusions completely transparently according to the assessment actually carried out. The advantages (not an exhaustive list) of each alternative are presented. 3.1 Calculation or measurements? The methodological issue applies in particular to incineration facilities. In effect, depending on the situation and the exact questions posed by the customer, the data for drawing up the Bilan Carbone could be obtained: 1- from data about the tonnage and composition of the waste; this data could be specific (local analyses) or generic (national data) Advantage of this approach: Easy to implement 2- from direct measurements provided that, for CO 2 from incineration in particular, the composition of the incoming waste is known precisely (so as to deduct the proportion of CO 2 from biomass see above). 2001-2010 - Methodology Guide - Version 6.1 91/116

Advantage of this approach: Compatible with an inventory approach when the establishment is subject to the quotas directive Comment: The first approach is the one applied in the majority of cases. 3.2 Fixed or variable composition of the waste? The methodology provides two possible ways of characterising the composition of the incoming waste: 1 Considering, by default, that the composition and characteristics (Lower Heating Value, fossil carbon, methane-production potential, etc) of the waste are fixed data, common to all the installations, and based on the MODECOM national data. Advantage of this approach: enables the performance of an installation s technical characteristics to be evaluated (changing a burner for the incinerator: this action cannot be quantified if the composition of the incoming waste is variable). Can allow entities with similar objectives to be compared. However this approach is not compatible with working from direct measurements (see above) 2 Considering that these data are variable and able to change from one year to the next. This approach obviously means that you need data on the changes in the waste delivered Advantage of this approach: Closer to actual situations, for example it allows you to evaluate the impact of a local waste sorting campaign. Comment: The choice of one or other of the approaches must be made according to the objective of the Bilan Carbone carried out. If the second is chosen, it can be relevant, when analysing changes in a situation, to seek to separate out, firstly, what is linked to a change in the characteristics of the waste over which the entity, whose Bilan Carbone is being carried out and which is in charge of its processing, has no control over, and secondly what is due to other causes (changes in technological choices, etc). 3.3 Timeframe for storage assessments? In the case of the storage of waste, the Bilan Carbone results will be different depending on whether you are carrying out: 1- the assessment of an annual amount of waste sent to storage. The emissions linked to this delivery will occur in a delayed way, spread over 20 to 30 years. An assessment such as this can only be based on emission factors. Advantage of this approach: suited to identifying action levers for optimising the management of a flow of waste. 2- the assessment of a site s annual operation (to a large extent methane emissions are due to the decomposition of waste buried several years earlier; they cannot be assigned to the tonnage admitted during the year in question). An assessment such as this can be carried out using direct biogas measurements (but such measurements are generally difficult and imprecise) or using results from models integrating the site s operational history (waste admission history for about the last 20 years). 2001-2010 - Methodology Guide - Version 6.1 92/116

Advantage of this approach: the type of assessment can be used for old centres that are closed to new deliveries of waste. It also means that data can be supplied for annual reports or for carrying out annual inventories. Comment: In order to select the appropriate approach, it is essential that you properly define the question you are trying to answer by carrying out the Bilan Carbone and that the conclusions are formulated accurately according to the assessment actually carried out. 4. Important element relating to the presentation and interpretation of the results In the case where, in a Bilan Carbone for a waste management activity: the carbon content of the waste is not taken into account (emissions linked to the production or use of products before they were discarded) the emissions generated directly by the waste processing procedures are counted, together with those from the upstream processes that made this waste processing possible (collection, incoming materials, etc) then the emissions avoided or sequestered are also counted. You can sometimes obtain results in which the avoided or sequestered emissions are, in absolute values, greater than the emissions generated. Such a result must not, in any way, be interpreted as encouraging the production of more waste. In fact, notwithstanding the apparently favourable waste management assessment, any increase in the production of waste will necessarily be expressed upstream by rises in the emissions linked to the increased production of goods and materials, not taken into account in the waste management activity s Bilan Carbone but nevertheless real. 5. Use of the Bilan Carbone spreadsheets linked to the evaluation of waste management activities. Drawing up the Bilan Carbone for an entity that is responsible for processing waste requires special thought concerning the use of the Bilan Carbone tool as supplied in its official version. This section simply aims to clarify the use of the spreadsheets for evaluating waste management activities. By spreadsheet and tool we mean version 6 of the Bilan Carbone. For all activities other than those processing waste, the emissions related to processing the waste do not raise any special issues and must be entered in the Direct Waste tab. For a waste management activity, these are in fact emissions related to the process and not to the entity s own waste (produced by the activity). In actual fact such an activity s own waste correspond, for example, to the office waste of the activity s administrative departments, or 2001-2010 - Methodology Guide - Version 6.1 93/116

more specifically to various residues from the activities (incineration: waste-gas processing residues; composting: composting dross; recycler: process spillage; etc). Version 6 of the Bilan Carbone, through the site/multi-site duo, provides great modularity in consolidating assessments. This flexibility means that the situation in question can be handled. Therefore, ADEME recommends that several evaluations are carried out using different site sheets. For example, one sheet can handle just the waste management (i.e. emissions from processes ) by means of the waste tab and other tabs where necessary (e.g. energy tab for an incinerator s fuel supplies). Another sheet can combine all the rest of the emissions. The Bilan Carbone consolidated in the Totaliser will then allow you to have both an overall view of your emissions and individual views, enabling a differentiated or even a comparative analysis. Caution regarding transport related to the waste collection: in order to view these emissions in a differentiated way (for example in the incoming freight category of a waste management sheet or in a separate transport sheet), this portion of the emissions must be subtracted from the predefined emission factor that already includes these emissions (the operation is to be carried out in the Emission Factors tab). 2001-2010 - Methodology Guide - Version 6.1 94/116

6. Other waste and greenhouse effect operations 6.1 Record Report This guide presents recommendations for the best way to take the issue of waste into account within the Bilan Carbone tool. This work was based on the versions of the tool in use when the study took place, namely V4 (company) and V5 (local authority). Many of its recommendations have been included in version 6 of the Bilan Carbone (they have also been included previously in this note). Some recommendations are dealt with in chapter 3 above, which presents methodological options that ADEME considers open. 6.2 EPE Protocol The primary objective of the EPE protocol on quantifying greenhouse gas emissions from waste is to guide local authorities and companies whose activity is managing waste, and also companies that have retained self-management of the removal of their waste, in quantifying, reporting and checking greenhouse gas (GHG) emissions, with the aim of drawing up an inventory of these emissions. It aims to establish the best practices for carrying annual inventories of GHG emissions. However, even if the primary objectives of the Bilan Carbone tool and the protocol are different, it should be noted that most of the rules for implementing these 2 tools are similar (specific accounting for biomass and fossil CO2, specific accounting for avoided emissions, etc). Nevertheless, a major difference concerns the approach with respect to storage. In the case of the EPE protocol, the principles emphasised and developed focus on enabling a site s annual emissions to be quantified and reported. The Bilan Carbone, on the other hand, favours (even if not exclusively, as indicated above) an approach focussing on quantifying the emissions, which will occur over the long term, related to an annual delivery of waste. In addition, the EPE protocol also provides specific data for foreign countries (carbon content of electricity kwh, characteristics of household waste, etc) allowing the protocol to be implemented for activities outside France. In addition to the differences mentioned above, i.e. especially for applications that do not include use of storage, or for a Bilan Carbone for a site s annual operation, the application of these 2 tools should, if the rules presented above are respected, give very similar results. 2001-2010 - Methodology Guide - Version 6.1 95/116

APPENDIX II: Principle for discounting emissions 0 Warning This methodological appendix provides the reader with various considerations making it possible to evaluate the damages caused over time by the accumulation of GHG emissions generated by one or more activities. This approach is currently being studied, especially for evaluating infrastructure-type projects (roads, buildings, etc) in which the emissions related to their operation are counted in tens of years. The assumptions for the calculation are not yet the subject of a consensus. There is a range of discounting solutions. The French Strategic Analysis Council ( Conseil d Analyse Stratégique Français ) debated the issue in 2007 and 2008 59 but did not arrive at a definitive solution. On the other hand, these elements must arouse the curiosity of the reader and often user of the Bilan Carbone methodology about the benefits of discounting damages caused by CO2 emissions in order to better understand the need to reduce them. In fact, this discounting is only relevant in the context of an evaluation of damages due to climate change. Although these elements are in an appendix to the Bilan Carbone Methodology Guide, there is no direct function applying the principles proposed below. ADEME considers it useful to describe them with the aim of making as large an audience as possible aware of the discussions underway without, however, endorsing all the aspects and in particular the stance taken in this document of promoting a discounting rate that is both fixed and negative, essentially based on the Stern Report on the economics of Climate Change (2006) 60. 1 Context for using an accumulation over time The Bilan Carbone for a productive activity (including services) includes, as we have seen, all the emissions on which the activity is dependent. Naturally this covers the operational emissions for the products or services once they are in the customers possession, and it is therefore important to take these emissions into account. When the products in question have a long life span (infrastructures, housing, vehicles, factories or industrial machinery, etc) the emissions in question necessarily correspond to the accumulation over several years, or even several decades, of the future emissions. 59 www.strategie.gouv.fr/img/pdf/valeur_tutelaire_du_carbone-rapport_final-6juin2008.pdf 60 www.hm-treasury.gov.uk/sternreview_index.htm 2001-2010 - Methodology Guide - Version 6.1 96/116

The first question is to know if, in a total of emissions that are going to occur over years or decades, a tonne of greenhouse gas must be counted in the same way whether it is emitted tomorrow or in 15 years. With regard to economics, for example, the response is known: in all the calculations of future revenue, when these are taken into account at the time of the calculation they are discounted, i.e. assigned a deduction that increases with the period of time that separates us from when they are actually received. In this case, taking account of the way in which tomorrow s emissions must be compared with today s emissions is equivalent to holding a debate about a physical discount rate for emissions. Discounting physical quantities is meaningless in itself, except for the purpose of calculating the discounted value of the damages caused by an emissions flow. To talk of the most significant of the greenhouse gases: is one tonne of CO 2 emitted in 10 years the equivalent of one tonne of CO 2 equivalent emitted today, or more, or less? If it is more or less, exactly how much more or less? Opting for a positive discount rate amounts to considering that emitting one tonne tomorrow is preferable to emitting it today. In contrast, a negative rate assumes that emitting one tonne tomorrow can cause more damage than emitting it today. If users want to evaluate the cost of the damages caused by CO2 emissions generated by a project over time, or the cost of damages avoided thanks to energy efficiency measures that they might recommend, then it would be strictly necessary to: - either discount the flows of physical quantities of CO 2 and then multiply them by the estimated cost of the damages at the current moment; - or multiply every tonne of CO 2 emitted by the cost of their respective increasing damages, assuming that this increases as time passes, then discount this flow at a fixed rate. This appendix shows the benefits and methods of discounting CO 2 emissions in the context of the first option. 2 - Physical discounting of the emissions To go farther in this discussion, we are going to choose to base our approach essentially on physical considerations. While there are strong uncertainties, the available data already allow us to conclude that a rapid climate change is a highly non-linear process, with thresholds, even if these are not easy to identify in advance. The number of thresholds passed will rise with the temperature, which means that each additional degree rise in temperature will probably bring a stream of consequences with it that will exceed the magnitude of everything all the previous degrees brought. 2001-2010 - Methodology Guide - Version 6.1 97/116

Possible consequences of climate change according to the rise in worldwide temperature (IPCC, 2007). It is therefore legitimate to consider that the function which gives all the physical, ecosystem and economic damages according to the rise in worldwide temperature (assuming that there is an accepted unit enabling this to be done) is highly convex, i.e. it rise much faster than a straight line (the damages rise much faster than the rise in temperature). The summary economic calculations carried out in the Stern report, for example, include many damage functions that rise quicker than the temperature. 2001-2010 - Methodology Guide - Version 6.1 98/116

On the left, an example of a concave curve: in its rising portion (on the left) the curve rises less quickly than a straight line. On the right, an example of a convex curve: in its rising portion (on the right) the curve rises quicker than a straight line. Qualifying the function that relates the damages to the planet s temperature rise is, however, not sufficient for what we propose. What interests us, since we are speaking of emissions, is to qualify the function that relates the damages to the emissions: is it concave, thus with marginal damages that rise slower than the marginal emissions, or convex, i.e. with marginal damages that rise faster than the marginal emissions? To answer this question we are going to proceed in several stages. First of all, the function that gives the rise in temperature over time according to the atmospheric stock of CO 2 is concave (it increases less quickly than a straight line, see below). Increase in planetary temperature over time according to the CO 2 concentration in the air over time. Source: 2001 report by IPCC. Next, the function that makes it possible to go from emissions to the concentration is also concave, at least for the moment: since a portion of the gas emitted at moment 0 is cleared from the atmosphere over time, as a result the constant greenhouse gas emissions generate an excess in the atmosphere that increases less quickly than the emissions. Another way of arriving at the same conclusion is to say that, for the moment, each tonne of CO 2 emitted is partly cleared from the atmosphere over time, certainly at a variable speed (see below), in such a way that the concentration represents the accumulation of the emissions less something, thus increasing less quickly than a straight line with gradient 1. 2001-2010 - Methodology Guide - Version 6.1 99/116

Residual radiative forcing generated by one tonne of greenhouse gas emitted at moment 0, in watts per square metre as planetary average, by time (logarithmic scales). This residual radiative forcing changes are the residual fraction of the concentration excess induced at moment 0. Source: Hauglustaine, LSCE It follows that the function that gives the damages according to the emissions is the composite of a highly convex function (which gives the damages according to the rise in temperature) with two concave functions (the one giving the temperature rise according to the concentration, and the one giving the concentration according to the emissions). This therefore raises the question of knowing whether this composite function, which gives the damages over time according to the emissions, is concave or convex. For that, you need to answer a simple question: are the future damages going to rise quicker than the emissions? Are the marginal emissions related to the last tonne of greenhouse gas emitted greater even considerably greater than the marginal damages related to the first tonne emitted? The logical answer would seem to be yes. In effect, for a threshold to be passed with respect to the global temperature, then a threshold must be passed in the concentration, and therefore also in the emissions. If the marginal damages became less as the emissions increased, the very concept of threshold (sudden surge and unpredictable magnitude once a temperature threshold has been passed) would not exist. However if we have a threshold-effect process, it is the last tonne emitted that is the most dangerous. Not emitting the last tonne is therefore more valuable than not emitting the first tonne. As time moves in only one direction, the last tonne emitted is also the latest one emitted. Even if that is partly an artefact, we can therefore say that it is the last tonne emitted the most remote one that must absolutely be avoided. The calculation mode that corresponds logically is therefore to weight the emissions in an increasing way over time, even if it can obviously be remarked that, with respect to accumulated emissions, not emitting a tonne provides a benefit that is independent of the emission date. 2001-2010 - Methodology Guide - Version 6.1 100/116

This increasing weighting also corresponds to another constraint: that of having a declining trend for global emissions. This is desirable as soon as possible for climatic stability, but if it is not achieved voluntarily it will end up arriving involuntarily because of the limitation on the stocks of fossil fuels. In this context, emitting a tonne today is less at conflict with the overall target path than emitting a tonne tomorrow. In other words, if a project or an object must emit a constant quantity of greenhouse gases, then as time passes this represents an increasing fraction of the emissions of all mankind, and therefore the more these emissions must have a high price for those that cause it. An increasing weighting is the logical response for discouraging the emissions more and more strongly over time when the overall emissions generated by a project are calculated. It is another way of saying that with time it will be more and more difficult to emit an identical quantity of GHGs. If you accept this way of looking at the issue, then it becomes logical that the carbon equivalent measurement of the same emitted quantity increases with time, and this is equivalent to the application of a negative discount rate for emissions in successive years 61. Given that, remember that, in all the scenarios, it is impossible to decide on a discount rate other than in a conventional way (this is also true in standard economics), and this convention of a negative rate appears most in line with the direction in which the calculation result must take us. For the emissions accumulated over a long time-scale in the context of the Bilan Carbone we will therefore, on the calculation date, count the project s future operational emissions for year i with the formula where: fi Fi = i ( 1+ a ) - f i represents the raw operational emissions for year i, - a represents the discount rate applicable for year i (in effect, this discount rate might not be constant over the years), - and F i therefore represents the discounted operational emissions for year i, i 3 - General accumulation formula 3.1 - Basic formulation Imagine that we have an object, of any type whatsoever, which requires E Fab emissions in order to be produced, and which will generate e i usage emissions during N years (i will therefore equal 1 to N; e i varies with i). 61 Remember that a discount rate is no other than the annual deduction applied to a sum that will be paid or received later with respect to the same sum paid or received today. In this case we will not have a deduction, we will have a surcharge. 2001-2010 - Methodology Guide - Version 6.1 101/116

The discounted accumulated operational emissions E are therefore given by the following formula: E = N i=1 e i (1+ a i ) i Where: - N = Number of years of operation (the starting year is year 1), - E = discounted accumulated operational emissions over the period of N years, - e i = operational emissions for year i, - a i = discount rate for year i (negative). The total discounted emissions (construction + operation + possible end of life, not shown here) T is given by the following formula: T = E Fab + N i=1 e i (1+ a i ) i We are now going to consider the result of this calculation for several simple cases then, based on these, consider a general case. 3.2 - Case of emissions that must increase by m% each year If we take the scenario still common at the moment in which the design of the object means that each year it will emit slightly more than the previous year (typically a transport infrastructure, with traffic that is supposed to rise every year), with an annual rate of increase of m%, then the raw emissions for year i should be equal to: e i = E (1+ m) (i 1) where E is the emissions for the first year (equal to f 0 ). The total of the discounted accumulated emissions are therefore N E (1+ m) (i 1) T = E Fab + (1+ a i ) (i 1) If the discount rate a is constant over time, then this total can also be expressed by: (1+ m)n N 1 E (1+ m) (i 1) (1+ a) T = E Fab + = E (1+ a) (i 1) Fab + E N (1+ m) i=1 1 (1+ a) i=1 2001-2010 - Methodology Guide - Version 6.1 102/116

3.3 - Case of constant emissions This is a special case of the previous formula with m = 0; the total discounted emissions are therefore given by the formula N E T = E Fab + (1+ a i ) (i 1) If the discount rate a is constant over time, then this total can also be expressed by: 1 N 1 E T = E Fab + (1+ a) = E (1+ a) (i 1) Fab + E N 1 i=1 1 (1+ a) i=1 3.4 - Case of emissions decreasing in a simple way In the case of emissions that are decreasing exponentially, for example losing m% every year, it is always the same formula but m becomes negative. In the case where a is constant, the discounted emissions for year i are therefore greater or smaller than those for year 1 depending on whether, in absolute values, m is smaller or greater than a. 3.5 - General case The general case is clearly the one in which the emissions are not constant over time, nor defined by a simple function. Nevertheless, in order to perform a calculation, there will usually be no other solution than to perform an approximation of the future emissions by means of a simple function. This requirement is even more legitimate when, the future not having been written, in the end a fairly simple function coming true is no less probable than a necessarily very complex function. Exploring the risks for the future by looking at what is given by simple functions is therefore not as unjustifiable as all that. To simulate something approximately, you can usually look at what is given by the emissions trajectories that follow: - a linear function, increasing or decreasing (below is an example of an increasing linear function), 2001-2010 - Methodology Guide - Version 6.1 103/116

- a power function, which is the case for any function where the value is multiplied every year by a fixed rate of increase (examples below, with a constant rate of increase on the left, and a constant rate of decrease on the right), - a bell-shaped curve, increasing to a maximum then decreasing to a minimum, with rates of rise and descent that can be different, and start and end levels that can also be different (example below), - a sigmoid, i.e. an S-shaped curve going from a start value to an end value and then remaining fixed on this value afterwards (example below). 2001-2010 - Methodology Guide - Version 6.1 104/116

Obviously, as a result the method does not restrict the possible functions for approximating future emissions. An even more sophisticated approach will consist of making the emissions vary not as a block but with a variation law that will be different depending on the flow in question (for example, for an apartment block, the electricity consumption will not vary like the heating consumption) and even in differentiating between the variation in the flows and the variation in the emission factors (for example passengers.km can increase then decrease while the emission factor per passenger.km decreases and then remains stable). 3.6 Choosing the discount rate The value of the discount rate a should theoretically correspond to the following formula: a ( 1+ g) ( 1+ t) N + 1 = 1 N + 1 / ( t g) With g the rate of increase in time of the value of the damage caused by the emission of an additional tonne of CO2 and t, the discount rate commonly used in discount calculations for revenues generated by public investments. The choice of t should be close to the value of the discount rate for public investments recommended by the European Commission every six months. The value g is at the discretion of the user. ADEME does not recommend any value in particular. The value of a therefore depends on the relative difference between t and g chosen by the user. The rate a is negative if g is greater than t. If you assume, like the STERN report, that the damages increase quicker than the rise in temperature (the relationship between the damages and the rise in temperature is convex) to the point where, despite the temperature rise slowing down over time (the relationship between the rise in temperature and the emissions is a concave function) the relationship between the 2001-2010 - Methodology Guide - Version 6.1 105/116

damages and the emissions is a increasing convex function (see II.2 above) then g > t must be set so that a is negative. Warning: the value of the total discounted emissions T is very sensitive to the choice of discount rate a. 4 - Other questions posed In addition to an assumption regarding the change in emissions over time, the result of an accumulation is highly dependent on several other essential assumptions, and especially: - the accumulation period, easy to define when the objects are held by a single user from the start to the end of its life, and sometimes more difficult to define in other situations (for example, when an object regularly changes owner, does the current owner have to calculate the accumulation over the time it is held or over the object s whole life?), - the choice of the discount rate and its possible change over time (see II.3.6 above), - whether emission factors are constant or not during the period (most of them vary and the calculation should ideally integrate this variation). 5 - Inclusion in the Bilan Carbone Because of the very large diversity in possible scenarios, none of the Bilan Carbone master spreadsheets (companies, assets and services, region) does not include a specific function for handling temporal series. Users will therefore need to construct their own tools to perform these calculations, so that they can then incorporate the usage emissions into a normal Bilan Carbone, or even show the emissions as a time series. The time series will start with the production emissions and end with the end-of-life emissions, and all the emissions will be taken into account on the date they occur. The essential point is that, if published with a third-party, the rules followed must be transparent and accessible to everyone. If the user has discounted the CO2 emissions, he/she may evaluate the cost of the damages C generated by the emissions by multiplying the total discounted emissions T (see II.3.1 above), by the value of the damages caused by the emission of one tonne of CO2 at the current time V. C = T V Warning: it would be wrong to again discount this product C. V corresponds to the cost of the damages generated by the emission of one tonne of CO2 at time t=1; and not to the average assumed value of the marginal costs during the period N in question. This confusion could lead the user to double the cost of the discounted damages 2001-2010 - Methodology Guide - Version 6.1 106/116

since the rate of increase of the marginal cost of the damages over time is already implicitly taken into account in the calculation of the value of the discount rate a (see II.3.6 above). 2001-2010 - Methodology Guide - Version 6.1 107/116

APPENDIX III: EXAMPLES 1 - Some orders of magnitude For a traditional heavy industry (chemicals, steel, etc), the leading source of emissions will probably be the energy used directly at the factory. Non-energy emissions can also be significant (e.g. cement, semi-conductors). For an agri-food business, the main source will usually be the emissions included in the agricultural products processed. For a retailer (especially supermarkets and hypermarkets), the emissions linked to producing the products sold will certainly be among the most significant, but transport (for delivering goods, but also for customers to travel to the retailer) will also be important. For an entity managing water and sewage systems, 40% of the emissions can come from methane emitted by the waste water. For a service company (bank, insurance), heating and air-conditioning for the buildings and personal transport will often be the main sources. To put this into perspective, 2 tonnes of carbon equivalent, i.e. almost the average annual per capita emission in France, can result from: The purchase of 87,300 kwh of electricity in France (12,600 in the United Kingdom). The combustion of 2,700 litres of fuel. 15,000 km by mid-range/top-range car in a real urban driving cycle 62. 30,000 km by plane (i.e. 2 round-trips between Paris and New York), 870,000 km by train in France (87,000 km in the United Kingdom) the production of 250 kg of beef, the production of 700 kg of new aluminium in Europe (less in the USA), 2 years of leaks from an air-conditioning system in a medium-sized office building. 62 This is noticeably less than the manufacturers data, which have been drawn up for journeys under more favourable conditions than those experienced in real life: no acceleration (except in an urban cycle), vehicle not heavily loaded, no wind, engine already warm, accessories (air-conditioning) not used, and without taking the fuel s upstream emissions into account. 2001-2010 - Methodology Guide - Version 6.1 108/116

2 - Some concrete examples 2.1 - A company in the organic chemical industry Consider the case of a company manufacturing wax. The range of sources covered by the Bilan Carbone will include: heavy fuel-oil used for the production facilities, gas used to heat the premises, upstream emissions from extracting, transporting and refining the fuels used, leaks of cooling fluids and the gases burned for purposes other than energy production (gas flares, etc), emissions linked to the production of electricity or steam purchased, including line losses, home-work travel by employees, travel by employees during working hours, including flights by management to seminars or to visit customers, travel by customers visiting to the factory, emissions by lorries bringing supplies to the factory, emissions by boats making deliveries to foreign customers, as well as emissions from tanker lorries travelling between the factory and the port of shipment, emissions resulting from the production of the raw materials (in this case, the production of hydrocarbons, waxes generally being petroleum derivatives) entering the factory, end-of-life emissions of the waste directly produced by the factory, emissions related to the construction of the factory, if it is fairly recent, as well as the car-parks and access roads, emissions linked to manufacturing the means of transport used, regardless of who owns them, emissions linked to manufacturing the computers used by the factory staff, energy used to implement a part of the production (for example, heating wax to pour candles or energy for processes mixing the wax with other components to make cleaning products, etc), VOC emissions during use, if such emissions must be generated by the products sold when used, end-of-life emissions, for example when products made with the wax sold are incinerated. Having said that, if this site is covered by the European quotas directive, only the following are taken into account in the extraction directive: 2001-2010 - Methodology Guide - Version 6.1 109/116

emissions linked to using heavy fuel-oil to heat the production facilities, without taking into account upstream emissions from extracting, transporting and refining the fuels used, 2.2 - A finishing company in the construction industry Consider a company that installs PVC windows, for either new or renovated buildings. The range of sources covered by the Bilan Carbone will include: gas or fuel-oil used to heat the office, emissions linked to the production of electricity purchased, possibly fumes from certain solvents, emitted during gluing operations, fuel used by the diesel vans belonging to the company used to travel to the work sites, emissions from the vehicles used by the employees to travel to work, emissions linked to the owner s travel, even in his/her own car, to visit the work sites, upstream emissions from extracting, transporting and refining the fuels used for heating or travel, emissions linked to manufacturing the PVC used to make the windows, as well as emissions linked to producing the glass for the panes, emissions linked to transporting these frames and panes from the factories to the work sites, emissions linked to the end-of-life processing of the work site waste (scrap material, paper, etc), emissions linked to manufacturing the paper used for sales brochures distributed in letter boxes, emissions linked to manufacturing the means of transport used, regardless of who owns them, emissions linked to manufacturing the computers used, emissions generated by the construction of the office and work-shop, if they are recent, as well as the work-site tools, emissions linked to the operation of the services used (telephone, insurance, etc), end-of-life emissions if the window frames are incinerated after removal. In this case, there are no emissions linked to use. On the other hand this company may wish to highlight economies linked to fitting the windows sold, if it considers that something is gained compared to what it considers to be the normal situation, in which its products are not used. In accordance with what has been outlined in this document, the Bilan Carbone does not propose any methodology for evaluating these emissions since they are based on assumptions and not on actual flows. If this company wishes to publish its results using the scope of the ISO standard, it will take into account: For scope 1: 2001-2010 - Methodology Guide - Version 6.1 110/116

gas or fuel-oil used to heat the office, without taking into account emissions from extracting, transporting and refining, possibly fumes from certain solvents, emitted during gluing operations, if these emissions are covered by the Kyoto protocol, fuel used by the diesel vans belonging to the company used to travel to the work sites, without taking into account emissions from extracting, transporting and refining. For scope 2: gas or fuel-oil used to heat the office, without taking into account emissions from extracting, transporting and refining, emissions linked to the production of electricity purchased, possibly fumes from certain solvents, emitted during gluing operations, if these emissions are covered by the Kyoto protocol, fuel used by the diesel vans belonging to the company used to travel to the work sites, without taking into account emissions from extracting, transporting and refining. For scope 3, all of the above sources will be taken into account. gas or fuel-oil used to heat the premises, possibly fumes from solvents, emitted during certain gluing operations, if these emissions are covered by the Kyoto protocol, emissions linked to the production of electricity used by the company, fuel used by the work-site diesel vans, home-work travel by employees, emissions linked to the owner s travel, even in his/her own car, upstream emissions from extracting, transporting and refining the fuels used for heating or travel, emissions linked to manufacturing the aluminium or plastic frames and the glass panes that the company installs, emissions linked to transporting these frames and panes to the company s warehouse, emissions linked to the end-of-life processing of the waste from the products (scrap material, paper, etc), emissions linked to the products or services purchased (telephone, machinery, buildings, computers), emissions that were necessary for manufacturing the windows installed, emissions due to transporting these windows from the manufacturer to the customer, emissions generated by the construction of the office (and work-shop), and manufacturing the tools, emissions linked to manufacturing the means of transport used, regardless of who owns them, emissions linked to incinerating scraps of plastic, emissions linked to putting certain waste in landfills 2001-2010 - Methodology Guide - Version 6.1 111/116

end-of-life emissions if the window frames are incinerated after removal. 2.3 - A DIY store The following example illustrates the case of a DIY superstore located in the suburbs of a large town. The Bilan Carbone will take the following sources into account: all direct consumptions of fuel for heating, leaks from the air-conditioning system (if there is one), emissions linked to the production of electricity purchased, consumption by vehicles for deliveries, employees travel to work, customers travel to the store, employees travel during the day in their own cars, upstream emissions from extracting, transporting and refining the fuels used for heating or for travel by employees, suppliers or customers, emissions that occurred when the products sold were manufactured, emissions linked to the manufacturing and end-of-life processing of the packaging for the products sold, emissions linked to the end-of-life processing of waste directly discarded by the store, transport of products from manufacturers to the store, emissions generated by the construction of the store (which will often be recent), emissions linked to manufacturing the means of transport used, regardless of who owns them, emissions linked to manufacturing the computer systems used, emissions linked to manufacturing the paper for catalogues and advertising leaflets, energy used to operate the products sold (gas for blowtorches, electricity for drills, sanders, and all electrical tools, etc), - emissions not linked to energy for the products sold (leaks in the case of cooling equipment, ozone-generating VOC emissions for adhesives and paint solvents 63, emissions of aerosol propellants for spray cans, etc). If this store wants to perform an extraction according to the intermediate scope to consolidate these emissions with those of a second site owned by the same group, the sources will then be limited to: all direct consumptions of fuel for heating, leaks from the air-conditioning system (if there is one), including non-kyoto gases, emissions linked to the production of electricity purchased, line losses included, consumption by vehicles for deliveries, employees travel to work, 63 These emissions are not covered by the Kyoto protocol 2001-2010 - Methodology Guide - Version 6.1 112/116

employees travel during the day in their own cars, upstream emissions from extracting, transporting and refining the fuels used for heating or for travel by employees or delivery vehicles. But it will be noted that sources that are important for a stand-alone view of the store will not be taken into account: manufacturing products sold, using the products sold, customers travel to the store, and (this source may be significant) manufacturing catalogues and leaflets. More generally, with this example it is fairly easy to see that there will be a considerable difference between the internal extraction and the global extraction: emissions generated by the company s activity but not made directly on-site will predominate over those occurring locally. 2.4 - A bank If we now consider the Bilan Carbone applied a bank branch, these are the sources that will be taken into account: fuels used for heating (fuel-oil or gas, possibly coal), leaks from the air-conditioning system (if there is one), including non-kyoto gases, emissions linked to the production of electricity - or steam, in the case of a collective heating system - purchased, travel by employees during the day, employees travel to work, travel by various visitors and customers to the branch, emissions linked to the manufacturing and end-of-life processing of consumables, especially paper, emissions linked to manufacturing the computer and office systems used, emissions generated by constructing the branch, post sent to clients, end-of-life processing of papers sent to clients and prospective clients (bank statements, brochures, various leaflets). In this case the use of products sold will raise an interesting problem of method. Theoretically you should include emissions linked to the operation of products purchased by means of loans: a greater constraint on the emissions will necessarily impact on the loans used to purchase a car, housing without insulation work, or a voyage (in the context of consumer credits). This is a typical case in which an additional extraction could be created to separate items that relate directly to the bank s everyday operation from emissions that are linked to the client s buying behaviour. Indeed, clients can reduce their emissions and still take out loans, just by changing what they buy with the loans in question. 2001-2010 - Methodology Guide - Version 6.1 113/116

2.5 - A regional prefecture Lastly, since the method is perfectly applicable to a public body, we present the example of a regional prefecture. Its Bilan Carbone will include the following sources: fuels used for heating (fuel-oil or gas, possibly coal), leaks from the air-conditioning system (if there is one), emissions linked to the production of electricity purchased, employees travel to work, employees work-related travel, including foreign travel by the Prefect, travel by the administration s users to premises open to the public, emissions linked to the manufacturing and end-of-life processing of consumables, especially paper, emissions linked to manufacturing the computer and office systems used, emissions generated by the construction of the prefecture s buildings, and possibly access roads if they were built solely for this, emissions linked to mail sent to the people administered. 2.6 - A General Council authority approach The authority approach of the Bilan Carbone method allows you to estimate the emissions for all the activities managed by a local authority. As an example, for a General Council the main sources to be taken into account will be as follows: - General administration: o fuels used for heating (fuel-oil or gas, possibly coal or steam), o leaks from the air-conditioning system (if there are any), o emissions linked to the production of electricity purchased, o travel to work by officers and elected officials, o travel by officials and elected officials required for the authority s operation, o travel by users to premises open to the public, o emissions linked to the manufacturing and end-of-life processing of consumables, especially paper (this source may include, in particular, the paper needed to publish the monthly or quarterly newspaper distributed to all the departement s inhabitants, as well as the paper used for poster and communication campaigns), o emissions linked to manufacturing the computer and office systems used, o emissions generated by the construction of the buildings in the departement s housing stock, and possibly access roads if they were built solely for this, o emissions linked to mail sent to the people administered. - Secondary schools: this is one of the main areas of involvement for a General Council. In addition to the traditional emission sources (energy consumptions for the buildings, depreciation of equipment, etc), there will be some specific sources: o Travel by students: travel between home and school, in the context of school activities (visits, language trips, exchanges with other countries, etc). 2001-2010 - Methodology Guide - Version 6.1 114/116

The breakdown of modes of transport may vary significantly from one secondary school to the next within the same departement. o Food for the school canteen. o Incoming materials: purchases of school books. - Roads: another main area of involvement for a General Council (most of which are now responsible for managing the departmental and national road network). The main emission sources will be as follows : o Freight: for all fuel consumptions needed for constructing and renovating the road networks (earthmoving, transporting rubble, etc). o Incoming materials: hundreds, even thousands, of tons of concrete and asphalt, and steel for the crash barriers. o Electricity: for street lighting. - Departemental public transport: this mainly covers intercity coach transport services. The sources to be taken into account here will be: o Consumption of fuel by vehicles o Possible leaks of cooling fluids from air-conditioning systems o Emissions from the administrative activities of these transport services o Since departemental public transport services are mainly concerned with transporting students to and from secondary schools, double accounting is possible for this source in particular. - Social welfare actions: for old people s homes, health- and social-care establishments, specialised institutions, the following should be taken into account in particular: o their energy consumptions (including electricity), o travel by permanent staff and temporary contributors, o travel by visitors, o consumption of food. - Other areas of involvement: A General Council can also be responsible for managing the Departmental Fire and Emergency Service, involved in the economic development policies, or be a stakeholder in the management of non-self-governing ports. 2.7 - A local authority Region module All the local authorities are potentially concerned by all the sources in the Region module. It is the presence or not of certain activities that will determine whether certain sources are relevant. The Region module of a local authority Bilan Carbone enables you to estimate the emissions generated by the activities of all the actors for the territory studied. The following will therefore be taken into account: - Energy production: emissions from electricity power stations, refineries or collective heating plants present in the territory. - Industrial activities: for all the emissions from the industrial activities present in the territory. Energy (fuels, petroleum, electricity) and non-energy (halocarbons, nonenergy CO2) consumptions. 2001-2010 - Methodology Guide - Version 6.1 115/116

- Tertiary activities: emissions linked to the use of energy and halocarbons (airconditioning, commercial refrigeration, tertiary, etc) by tertiary buildings. - Residential activities: emissions linked to the use of energy and halocarbons (airconditioning, commercial refrigeration, tertiary, etc) in homes. - Activities linked to agriculture and fishing: energy consumptions, quantities of fertilizers and plant protection products (PPPs), number of livestock heads. This source is only relevant if this type of activity is represented here (rural territory or a coastal territory). - Transporting goods: evaluation of the total tonnes.km relating to incoming, outgoing and transiting freight, with a breakdown by mode of transport (road, rail, air, river and sea). - Transporting people: evaluation of the residents transport inside or outside the territory in question and evaluation of the transport of people (visitors, tourists, etc) coming to or traversing the territory. - Processing waste: evaluation of the emissions from processing waste produced by all users in the territory. - Producing future waste: very partial evaluation of the materials consumed in the territory based on processing the data on waste produced in the territory. 2001-2010 - Methodology Guide - Version 6.1 116/116