What is a CO2 Emission factor? An easy-to-understand explanation of the calculation method, SHK system compliance, and the difference between basic and adjusted CO2 emissions factors.

"I was assigned to the Sustainability Promotion Department, but there are so many technical terms that I don't understand." "I was put in charge of calculating CO2 emission amount, but I can't keep up with the coefficients that change every year."

As of 2026, when companies are accelerating their efforts to decarbonize their operations, many people in charge of CO2 emissions are facing these kinds of concerns. The most basic and important key to calculating CO2 emission amount is the "CO2 Emission factor."

At first glance, the concept of CO2 Emission factor seems simple, but in reality, the approach and types vary depending on the system and purpose of calculation. Without a proper understanding of these factors, such as factors used in statutory reporting, factors based on international standards, and factors that reflect reduction efforts, confusion can arise in calculations and disclosures.

In this article, we will explain the basics of CO2 Emission factor, clarify how to calculate them, and then provide an easy-to-understand explanation of the difference between "basic" and "adjusted" in Japan's SHK system (Global Warming Countermeasure Act), as well as how the latest legal changes are addressed in the 2024 and 2025 reports.

What is the CO2 Emission factor? An easy-to-understand explanation

Basic definitions

A CO2 Emission factor(Emission intensity) is a number that indicates how much CO2 (carbon dioxide) is emitted when a certain activity is carried out.

For example, for electricity it indicates "how many kg of CO2 is emitted to generate 1 kWh," and for gasoline it indicates "how many kg of CO2 is emitted to burn 1 liter." The main units are as follows:

• Electricity: kg-CO₂/kWh (emission amount per kilowatt hour)
• Fuel (gasoline, etc.): kg-CO₂/L (emission amount per liter), etc.

Why are Emission factor necessary?

In order for a company to visualize the environmental impact of its business activity, it needs to convert the amount of activity(such as electricity consumption or gasoline consumption) into a common indicator called "CO2 emission amount."An Emission factor is essential for this conversion.

Furthermore, under the Act on Promotion of Global Warming Countermeasures (Global Warming Global Warming Countermeasure), businesses of a certain size or larger are required to report emission amount to the government. In recent years, calculations using accurate coefficients have become necessary in response to the full-scale operation of the emission amount Trading Scheme (GX-ETS) based on the GX (Green Transformation) Promotion Act and the Sustainability Disclosure Standards for Japan (SSBJ).

How to calculate CO2 emission amount[Basic formula]

Calculation formula: activity amount x Emission factor

Calculating CO2 emission amount is very simple and can be calculated using the following basic formula:

CO2 emission amount = activity amount x CO2 Emission factor

[Calculation example] For example, if your office uses 10,000 kWh of electricity per month and the Emission factor of your contracted power Company is 0.000457 t-CO₂/kWh:

10,000 (kWh) × 0.000457 (t-CO₂/kWh) = 4.57 t-CO₂

In this way, emission amount can be calculated simply by multiplying the activity level by a coefficient.

Relationship with Scope 1, 2, and 3

A company's emission amount are managed in categories called "scopes," and Emission factor are used in each category.

• Scope 1(direct emissions): Emissions from burning gasoline or city gas at our company. Emission factor for each fuel are used.
• Scope 2(indirect emissions from Energy sources): Emissions from the use of purchased electricity. Uses the Emission factor of the power Company .
• Scope 3(other indirect emissions): Procurement of raw materials, use of products, etc. Emission factor(Emission intensity ) from various databases are used depending on the activity .

What is the difference between "Base Emission Factor" and "Adjusted Emission Factor"?

Japan's SHK system (Global Warming Countermeasure) classifies electricity Emission factor into "Base Emission Factor" and "Adjusted Emission Factor." The difference between these two is one of the most confusing points for practitioners, so it's important to understand it correctly.

Base Emission Factor

This is the amount of CO2 emitted by an electric power Company when generating electricity, divided by the amount of electricity sold. Since it depends on the power plant's power source mix (thermal, hydroelectric, nuclear, etc.), the figure will be higher for electric power Company with a higher proportion of thermal power generation.

Adjusted Emission Factor

This is a figure obtained by adjusting the Base Emission Factor to reflect "environmental value" (such as non-fossil fuel certificates and J-Credits). If you have signed up for a plan with a high renewable Energy ratio or purchased certificates, this figure will be lower (or zero).

The difference between location criteria and market criteria

When understanding electricity Emission factor, it is easier to understand them if you also understand the concept of the GHG Protocol, which is an international calculation standard.

The GHG Protocol defines the following two standards for calculating Scope 2(purchased electricity):

• Location-based: A method that uses an Emission factor based on the average power source mix for the entire region
• Market standard: A method that uses Emission factor that reflect the contracted electricity plan, environmental certificates, etc.

The " Base Emission Factor " in Japan's SHK system ( Global Warming Countermeasure ) is a concept close to the location standard, while the " Adjusted Emission Factor" can be classified as a concept close to the market standard.

However, the objectives and calculation rules of the two systems do not completely match. It is important to select the appropriate coefficient depending on the purpose, such as statutory reporting, voluntary disclosure, or international disclosure.

Which one should I use?

In reporting based on the Global Warming Countermeasure(SHK system), calculations and reports must be made using both a "Base Emission Factor" and an "Adjusted Emission Factor."

• Basic emission amount : To understand the actual emission amount from business activity .
• Adjusted emission amount: To evaluate emission amount that reflect reduction efforts such as the introduction of renewable energy. This is usually emphasized when demonstrating the progress of a company's reduction targets (such as SBT or RE100).

[2026 Latest Edition] How to Check the List of CO2 Emission factor

See data published by the Ministry of the Environment and the Ministry of Economy, Trade and Industry

The Emission factor of electric power Company are published annually by the Ministry of the Environment and the Ministry of Economy, Trade and Industry . The latest emission factors for each electric power Company(Retail electricity supplier) are listed in the "List of Emission factor by Electric Power Company."

• How to check: Check the "List of calculation methods and Emission factor " page on the Ministry of the Environment's "Greenhouse Gas emission amount Calculation, Reporting and Disclosure System"*1 website.

Note that the Emission factor changes every year.

Emission factor are not fixed values. They are updated annually due to changes in the power supply mix of electric power Company and revisions to the legal system. When making calculations, you must always use the latest factor for the relevant fiscal year. Using an outdated factor can lead to calculation errors and risk undermining the reliability of external reporting.

[Important] Changes to the SHK System (Global Warming Countermeasure) since the FY2024 and FY2025 reports

What accounting personnel should pay the most attention to now are recent changes to the system. Important changes have been applied to the SHK system (Global Global Warming Countermeasure) from the fiscal year 2024 (Reiwa 6) report.

Review of calculation targets and classifications

The following changes have been made since the FY2024 report:

1. Changes to the name and coefficients of "Gasoline": The name has been changed to "Gasoline Fuel" and the coefficient values ​​have been updated.

2. Change in the status of waste-to-fuel use: The use of waste as raw fuel (using waste such as waste plastic as fuel), which was previously not included in Energy related CO2 emissions, now needs to be reported as Energy CO2 emissions.

3. Introduction of business-specific coefficients for city gas and heat supply: Not only electricity, but also city gas and heat supply will now be required to be calculated using individual coefficients for each business.

Changes from the FY2025 report (Base Emission Factor for electricity)

Furthermore, according to materials published by the Ministry of the Environment, the calculation method for the Base Emission Factor and calculate the Base Emission Factor by menu. This has evolved from the previous idea of ​​an "average of all power sources" to a system that can better reflect the actual conditions of contract plans, but at the same time, this means that determining "which coefficient should be used" has become more complicated.

What the person in charge should be aware of

These changes mean that it is no longer possible to simply enter data into the same Excel spreadsheet as last year. In particular, with the expansion of the application of coefficients by business operator, it has become necessary to manage the coefficients for each gas Company individually.

Methods for reducing CO2 emission amount , taking into account differences in Emission factor , etc.

There are two approaches to reducing CO2 emission amount: "reducing activity(amount of use)" or "lowering the Emission factor."

Switch to an electricity Company or plan with a lower Emission factor

Even with the same amount of electricity used, you can significantly reduce (or even eliminate) your calculated CO2 emission amount by simply switching to an electric power Company with a lower Emission factor or a 100% renewable energy plan (CO2-free plan). This is an immediate reduction measure that is being adopted by many companies.

Energy conservation and renewable energy introduction

• Energy saving: Reducing power consumption (activity level) itself by updating to more efficient equipment and switching to LED lighting.
• Introducing renewable energy: If you introduce solar power generation equipment and consume it yourself, the electricity generated can be counted as having a zero Emission factor.

How to solve the Issue of calculation work: "Coefficient management is difficult..."

As explained so far, CO2 Emission factor are very complex and difficult to manage.

The Limitations of Excel Management

Many companies use Excel for calculations, but they face the following Issue:

• Coefficients are updated manually every year: Searching for data on hundreds of electric power Company on the Ministry of the Environment's website and manually entering it for each company's location is prone to errors.
• Difficulty keeping up with legal changes: It is difficult to reflect changes such as "gasoline has been changed to volatile oil" or "city gas coefficients differ from Company to company" in real time unless there is a dedicated person in charge.
• Complex Location management: If you have contracts with multiple power Company, applying different coefficients to each location and then calculating both the basic and adjusted patterns requires a huge amount of work.

The calculation tool automatically applies the latest coefficients

A cloud-based CO2 emission amount calculation tool can solve these Issue .

Zeroboard automatically loads and updates the latest databases published by the Ministry of the Environment and the Ministry of Economy, Trade and Industry into the system. Users simply input their monthly electricity and fuel consumption, and the system automatically retrieves the appropriate Emission factor for the fiscal year and business, and calculates accurate emission amount.

Since the system automatically handles "Changes from FY2024" and "Basic and adjusted calculations," staff no longer need to look up the Contents of legal amendments, and can instead focus on their primary job of "considering reduction measures."

summary

• The CO2 Emission factor is a value used to convert activity levels into CO2 emission amount, and is updated annually.
• Two types of calculations are required: "basic" and "adjusted," and it is important to understand the difference between them.
• In the reports for fiscal years 2024 and 2025, there were major changes to the classification of coefficients and the calculation method for city gas.
• There are limitations to managing increasingly complex coefficients using Excel.

The quickest way to perform calculations accurately and efficiently and accelerate decarbonization management is to introduce a dedicated tool that supports automatic updating of Emission factor.

Would you like to be freed from the hassle of managing complex Emission factor ? Please check out the Service site for details on the features of " Zeroboard ," which automatically complies with legal changes and significantly reduces calculation work.

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reference:

*1) Ministry of the Environment "Greenhouse Gas emission amount Calculation, Reporting, and Disclosure System" https://policies.env.go.jp/earth/ghg-santeikohyo/