Indicators

GHG Emissions, Scope 1 – Controlled

Scope 1 emissions refer to direct greenhouse gas (GHG) emissions from sources controlled by blockchain nodes, such as mining farms or data centers that generate their own electricity.

• Most blockchain operations rely on purchased electricity, meaning their Scope 1 emissions are generally low. However, if miners or validators operate their own power plants (e.g., using fossil fuels for off-grid electricity), their direct emissions become relevant.
• Scope 1 emissions are difficult to track due to limited transparency in private mining operations. However, large mining firms may disclose this data in regulatory filings

GHG Emissions, Scope 2 – Purchased

Scope 2 emissions account for indirect GHG emissions from purchased electricity, which constitutes the majority of emissions from blockchain networks.

• These emissions are calculated based on network energy consumption and the emission intensity of the local electricity grid where the energy is sourced.
• The assessment follows two methods:
  1. a. Location-based method: Uses the regional grid’s average emission factor to estimate emissions.
  2. b. Market-based method: Incorporates data from energy contracts and renewable energy purchases (e.g., green energy credits).
• The final reporting standard uses only the location-based approach to ensure consistency.

GHG Intensity

GHG intensity measures the average greenhouse gas emissions per validated transaction, expressed in kilograms of CO₂ equivalent per transaction.

• This metric is derived using a hybrid allocation approach, similar to energy intensity.
• Scope 1 and Scope 2 emissions are combined to determine the total network emissions, which are then allocated proportionally to individual transactions.
• The methodology ensures that emissions related to maintaining the blockchain’s security and processing transactions are appropriately distributed.