The challenge of including load factors into carbon reporting

Energy Intensity Ratios are causing problems for transport fleet operators. These new metrics are a new mandatory requirement for some and being compliant is proving to be difficult. But what are they, how do you calculate them, and what is making them problematic?

These new metrics are part of the Energy Savings Opportunity Scheme (ESOS) which is administered by the Environment Agency. In November last year, the scheme introduced amendments to the legislation and included in that was the introduction of Energy Intensity Ratios. The idea being that companies would be able to take energy consumption and relate it to activity, creating a new view of efficiency performance.

The scheme measures energy used in kWh. For those with transport operations, this will be representative of all of the energy that has been consumed by your fleet. kWh is then required to be compared to either person per mile (for passenger transport) or tonne mile travelled (for freight transport). These are the only two that are available.

Although calculation is straight forward, getting the data is not and this is where it is problematic. To make matters worse, the new metric is required for the current phase of ESOS which covers a period that has passed, so they have to work with what data they have. And in most cases, that isn’t a lot.

The guidance states ‘The loading indicator used for each freight transport journey should be the mass of the freight being transported for that journey, in tonnes’. This carries a massive assumption that this data is available, which even the very best transport operators are unlikely to lay their hands easily, if at all. Many operations simply do not track the weight of the freight they are shifting, in lots of scenarios, there simply isn’t the need.

So, what can be done? How can a transport business be compliant whilst at the same time creating something that is credible, workable, and meaningful? After all, this is a metric that is going to need to be repeatably reported on.

It is very probable that even with a lot of data, you are going to need to make some credible assumptions. Some of the approaches that are being adopting is making a ‘percentage laden’ assumption on the payload of the vehicle, an approach not too dissimilar to that in the GHG conversion factors for mileage. Another could be to do a percentage analysis of journey records and manifests; establishing some typical cases; and then multiplying that by the number of vehicles and then pro-rating it. These examples are far from exact sciences, but the point is that there is thought and process behind them giving them credibility. Being clear on the assumptions used is important in order to satisfy the requirement.

Going forward, transport operators will need to implement more scientific ways of capturing this data, especially as the next phase of ESOS and other recently introduced legislation will require it. The introduction of submitting an action plan setting out what you intend to do to reduce energy consumption and when you intend to do it, is required for submission to the Environment Agency by the 5th December. From then on, every year, participants will have to report on their progress, and we should expect to see Energy Intensity Ratios playing a part in this.

To conclude, although the principle of these ratios is a step in the right direction, the implementation of them leaves a lot to be desired. Different businesses, a wide array of vehicle user cases, and low retrospective data availability, all mean that to funnel down into just two categories for a time in the past feels like a tall order. However, we are where we are and with a bit of thought and methodical process, operators are able to produce something that is not only compliant, but the foundation for a new way of looking at efficiency.