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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Green Initiatives

Kaveri Steels Ltd emitted 50,000 tonnes of CO2e in a year. It bought verified carbon credits equal to 10,000 tonnes CO2e and cut its emissions by 5,000 tonnes through efficiency measures, which are already reflected in the 50,000 figure. What is its gross emission figure, and what are its net emissions after offsets, for disclosure?

Gross emissions remain 50,000 tonnes CO2e because the efficiency savings are already included. Net emissions are 40,000 tonnes after deducting 10,000 tonnes of credits. Offsets should be shown separately from gross emissions, and the efficiency saving must not be deducted a second time.

  1. AGross 40,000 tonnes; net 30,000 tonnes
  2. BGross 50,000 tonnes; net 40,000 tonnesCorrect
  3. CGross 50,000 tonnes; net 45,000 tonnes
  4. DGross 60,000 tonnes; net 50,000 tonnes

Explanation

The 50,000 tonnes already reflects the efficiency gains, so gross emissions remain 50,000. Offsets of 10,000 tonnes reduce the net figure to 40,000. Subtracting the 5,000 again would double count the efficiency cut and give a wrong figure.

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