Principles and Roles of Greenhouse Gas Inventory – Agriculture as an Example

Yun-Shan Huang（China Productivity Center Agricultural Innovation Department I）

As a result of industrial development, the human activities on earth intensified and ecological chains gradually changed. Climate change has emerged as a dauting global challenge. In the early 20th century, coal was the primary energy source, later giving way to fossil fuels, natural gas, nuclear power, and hydrogen energy, etc. By the beginning of the 21st century, concerns over global warming and the high carbon emissions from coal, fossil fuels and natural gas spurred the development of renewable energy, in order to gradually achieve reduction targets.

The use of traditional energy sources continued driving up global carbon emissions each year until the introduction of new energy in the 20th century began to slow the upward trend.

Developed nations, including the United States, United Kingdom, Germany, Canada, and Russia, generate higher carbon emissions. Meanwhile, the emissions in developing countries are also steadily increasing. Global temperatures have risen by more than 1.11°C above pre-industrial levels. Without global efforts to mitigate rising carbon emissions, the planet will face more unpredictable consequences, such as torrential rains and extreme weather, as a result of warming. The clock is ticking for greenhouse gas reduction actions.

Agricultural organizations and companies, as part of the small and medium-sized enterprise (SME) ecosystem, have a smaller environmental impact than industries but still warrant attention. The Ministry of Environment and the Financial Supervisory Commission have required businesses and TWSE/TPEx-listed companies to complete greenhouse gas inventories. Companies with annual greenhouse gas emissions, whether direct emissions alone or the combination of direct and indirect emission, exceeding 25,000 tons p.a. must complete these inventories as a basis for emission reduction.

TWSE/TPEx-listed companies must accomplish this process in two phases, with firm-wide greenhouse gas inventories completed no later than 2029. Given the unique characteristics of the agricultural industry, greenhouse gas inventories will be assessed for companies on a case-by-case basis. However, the fundamental principles and roles remain unchanged and must be clearly defined with the audited entity to prevent misunderstandings that could cause bias in greenhouse gas inventory results.

According to ISO14064-1:2018, the greenhouse gas inventory process of the agricultural entities should follow the MRV principles—measurable, verifiable, and reportable. The inventory process must remain neutral, with concrete and precise identification of all items requiring review. Therefore, in terms of relevance, completeness, consistency, transparency, and accuracy, the entire validation team needs to work together to ensure the validation results meet reasonable assurance levels and can be accepted.

As far as the principles of relevance, completeness, consistency, transparency, and accuracy are concerned, the author has years of experience in the agricultural industry and shares the following views in the context of their roles in the inventory process.

1. Relevance
   When conducting a greenhouse gas inventory, the agricultural entity under review and its advisory consultants should first discuss the degrees of relevance and determine whether certain items fall within the boundary and whether they should be included in the inventory. This includes considering greenhouse gas sources/sinks relevant to the expected users' needs. Any items deemed irrelevant and not part of the inventory should be excluded upfront. All relevant items shall be clearly listed to ensure a smooth inventory process. This prevents situations where additional and unexpected inclusions during the process and the necessary adjustments prolong the inventory timeline.
2. Completeness
   The importance of relevance is evidenced by the high emphasis placed by the verification team. Before the inventory process begins, a review is conducted on the greenhouse gas inventory report submitted by the agricultural entity to ensure all greenhouse gas emissions and removals are included. Throughout the inventory process, all production processes and emission sources of the agricultural entity are continuously verified to make sure that these are fully accounted for in the report. Given the importance of completeness, the verification team maintains strict standards in this regard.
3. Consistency
   Given the importance of consistency, the verification team also pays attention to whether the data relevant to greenhouse gases can be meaningfully compared. The consistency in contextual data throughout the verification is a key priority of the inventory process for verifiers, in particular. If discrepancies arise during data comparisons or calculations, it is necessary to work with the entity for clarification and confirmation.
4. Transparency
   Considering the importance of transparency, the verification team assesses item by item whether the relevant greenhouse gas information is adequately and thoroughly disclosed in line with the intended purpose of the inventory provided by the agricultural entity, so that the expectations of the expected users are met and a reasonable and credible verification can be accomplished.
5. Accuracy
   Regarding the importance of accuracy is concerned, the verification team aims to minimize bias and uncertainty and repeatedly checks and confirms activity data, emission factors, and Global Warming Potential (GWP) values throughout the process. The lead verifier, in particular, takes extra precautions to ensure accuracy, so as to avoid adverse effects on the accuracy of the total greenhouse gas emissions and the verification report finalized.

All the above-mentioned five principles hold significant importance and must be applied repeatedly for the in-house inventory conducted by the agricultural entity or the verification performed by the verification team, to ensure that the final greenhouse gas inventory report is as accurate as possible.