December 17, 2025 • 9 mins
Today's question comes from listener Peter, who sent it through the Fear & Greed website:
Who measures emissions, how are they measured, is the number audited, checked off on, and by who? Is it measured the same way in every country? BHP and FMG can measure their emissions, I'm assuming they have budgets, but what about for smaller companies, companies that aren't listed?
Sean Aylmer is joined by Thomas Hodgson from sustainability consultancy Anthesis for an answer to Peter's question.
Fear & Greed Q+A: Join Sean Aylmer & Michael Thompson and the team as they answer questions on business, investing, economics, politics and more. If you have your own question, get in touch via our website, LinkedIn, Instagram or Facebook!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Welcome to Fearing Greed Q and A, where we ask
and answer questions about business, investing, economics, politics and more.
I'm Suan Aylmer. Today's question has come from Peter, who
got in touch via the website Fearinggreen dot com dot au.
He says, I quote, who measures emissions? How are they measured?
Is the number auditored checked off on? And by who
is it measured? The same way? In every country? BHP
(00:27):
and fortesqu can measure their emissions. I'm assuming they have budgets,
but what about for smaller companies that aren't listed. I'm
no believer in conspiracy theories, however, this has always fascinated me,
the accuracy and validity of emissions measurements. It is a
great question and when it came in, I had no
idea the answer to it. So we've gone to an
expert in this space. Thomas Hodgson is a director at
(00:51):
ant Thesis, a sustainability consultancy. Thomas, Welcome to Fear and
Greed Q and A.
Speaker 2 (00:56):
Thanks for having me, Sean, how lovely to be here.
Speaker 1 (00:59):
I don't know where to start. I mean, I kind
of know about scope one, two and three emissions, but
how do they measure them. Where do we start?
Speaker 2 (01:06):
Yeah, great, great question. I mean even scope one, two,
three is not necessarily the most straightforward of concepts. So
just to summarize, Scope one emissions of the emissions, for example,
directly coming out of the back of your car if
you're driving an internal combustion engine and burning fossil fuel.
Scope two emissions would be the emissions associated with generating
(01:30):
electricity somewhere else that then you use in your car
or your home. And Scope three emissions would be emissions
that are attributable to the manufacture of that car in
another country, for example. So collectively, that's the primary focus
of emissions. And there is scopes above Scope three, but
(01:52):
they're not something that I work with closely, okay.
Speaker 1 (01:55):
So the idea is sort of things that you can
directly impact the car, the scape one. The next level
is two, the next level is three. And you know
when we talk about big business or business generally, we
talk about them working out the emissions ast escape three
emissions is the result of their third parties, their supplies
or that type of thing. To the nub of the question,
(02:19):
how do you measure it? Is there a measuring scope
or something?
Speaker 2 (02:22):
I mean, yeah, well, it's a fascinating field and I
personally started this journey, you know, following my conclusion of
my environmental engineering degree, I worked for the Federal Department
of Climate Change measuring Scope one two emissions for large
businesses in Australia under what's called the National Greenhouse and
Energy Reporting Scheme. So that's our federal scheme, and I
(02:45):
would say it's one of the best and most accurate
globally to measure scope on in two emissions. And the
way that you do it in that framework is that
you first choose which method within scope one that you're
going to use, so method two, three four, Method one
being the most simple way you, for example, apply a
(03:06):
default emissions factor for a killer liter of diesel used
or coal burnt or gas burnt, for example. And that's
the way that most companies estimate emissions.
Speaker 1 (03:19):
That's some sort of benchmarks that has been kind of
created and sourced scientifically. Yes, saying it broadly, if this
is the amount of diesel we use, this is the
amount of missions we put out.
Speaker 2 (03:31):
Yes, So for Scope one it's it's in the order
of two point seven tons of emissions per killer liter.
One thousand. Leaders of diesel burnt, and that's a pretty
common basis of estimation. And from there you would go
to a heart what's called a higher order method, so
you would you move up the accuracy but also the
(03:51):
administrative burden ranks, so method two, three, four, with method
four being the highest complexity, and that's where instead of
estimating emissions associated with your consumption by applying default factors,
you would actually measure what's coming out of your tailpipe
or of your industrial stack. We work a lot with combines,
for example, and we use method for what's called continuous
(04:14):
emissions monitoring or periodic emissions monitoring to measure the gas,
the methane and sere two coming out of underground coal mine,
for example. That's most accurate, but also the most burdensome
to implement.
Speaker 1 (04:27):
Okay, you're gonna have to dumb it down even further
for me, not anyone like you measure in terms of diesel.
But what if you're not using diesel? Is that a
really stupid question? I'm cringing here, Thomas as I ask
you that question.
Speaker 2 (04:42):
No, no, great question. So what are we measuring? Fundamental
is the question? And what's coming out the back of
a diesel burning car is not diesel. It's carbon dioxide,
which has a global warming potential of one. There's also hydrosoxide,
which is formed when you burn fossil fuel in the
(05:04):
presence of air, which is mostly nitrogen so the end too. Oh,
and that has a really high global warming potential. I
think it's two hundred and sixty five times CO two,
so really really persent. And there's also methane that comes
out of the back of your diesel car. And that
methane is basically a function of unburnt hydrocarbons or diesel
(05:27):
that didn't fully combust and it comes out as methink gas,
which itself has a high global warming potential of about
twenty eight.
Speaker 1 (05:34):
Okay. And so when we talk about agriculture, when we
talk about farming and cattle and methane emissions and it's
a big challenge to kind of produce feed to reduce
methane emissions. We use diesel as a catsual, but in
actual fact, what it is it's different elements that you're
measuring and you're putting their potential towards hurting the ozone layer.
Speaker 2 (05:58):
Well broadly, yes, so ozone depleting substances an entirely distinct
sort of concept and concern. There is some degree of overlap,
and that's because things that are ozone depleting and the
traditional classic case of this is CFCs. CFCs are ozone
depleting and also very very posent greenhouse gases. But the
(06:22):
primary focus of organizations in Australia is around the global
warming potential or the climate change impact of their owns.
Speaker 1 (06:30):
Yeah, okay, So going back to my cow question is
you know, farmers broadly, if you got you know, you're
one of the big Australian Pastoral company or something like that,
and you've got tens of thousands of cattle, you have
a rule of thumb do you for methane emissions based
on what the cattle are grazing on? And that's kind
of how you work it out.
Speaker 2 (06:50):
Yes, So agricultural emissions that are not captured by the
National Greenhouse and Energy Reporting Scheme, so there's not such
a formal and curate framework to measure those emissions. There
are many agricultural organizations they seek to quantify emissions associated
with the agricultural activities, including livestock husbandry. To estimate those missions,
(07:14):
the general approach is to apply a default emissions factor
per head of cuttle. That's quite common.
Speaker 1 (07:20):
Okay, what about carbon capture and storage? So that's you know,
if we're going to hit some of our targets, I
don't see how we can avoid going big on carbon
capture and storage. Maybe we miss our targets. Maybe that's
the answer. How do you measure that?
Speaker 2 (07:36):
Yeah, so the carbon culture and storage, Like, the classic
way this works is that you get a stream of
CO two, so carbon dioxide coming out the top of
a C core power station. You compress that gas and
you put it through a pipe, and you put it
into an underground reservoir where it stays in perpetuity. And
(07:58):
there's a range of men mechanisms that you would utilize
to quantify the mass flow rate of that gas. But
in really short terms, in simple terms, it's a little
bit like measuring the water coming through your tarp at home,
and the government has a meter out the front of
your house to understand how much water you're consuming. In
a similar way, you would measure how much CO two
(08:20):
is going through the pipe ultimately for sequestration in the
carbon culture and storage facility, and so.
Speaker 1 (08:27):
You basically need that close to wherever the carbon is
being emitted.
Speaker 2 (08:32):
Yeah, the closer the better, so you can do it
further away, but that adds to cost because you need
to put pipelines in place, and you need to expand
energy to move the carbon dioxide from where it originates
to where it's going to be sequestered.
Speaker 1 (08:47):
Thomas, I reckon I've learned more in the last nine
or ten minutes than most interviews I do, because I
now kind of get the idea that you can measure it,
because I've always been suspect on that, but you really can.
Even if it's a rule of thumb, it certainly is
a pretty good guiding principle.
Speaker 2 (09:03):
Absolutely, And the way I see it is that decarbonization
and heading towards NAT zero twenty fifties is a big
challenge for all industry, and it's really a journey. You know,
it's a journey that's going to go across decades, and
the start of that journey is measuring your emissions and
the next step in that journey is measuring them more accurately,
(09:24):
and then you seek to obey to mitigate those emissions.
Speaker 1 (09:27):
Thomas, thank you for talking to fear and greed.
Speaker 2 (09:29):
No worries great, Thank you for having me.
Speaker 1 (09:31):
That was Thomas Hodson, director of a Thesis, a sustainability consultancy.
If you've got something you'd like to know, then send
through your question, just as listen Peter did, via the
website Fearangreed dot com dot au, or on LinkedIn, Instagram
or at Facebook. I'm Sean Almer and this is Fear
and Greed Q and day
Welcome to Fearing Greed Q and A, where we ask
and answer questions about business, investing, economics, politics and more.
I'm Suan Aylmer. Today's question has come from Peter, who
got in touch via the website Fearinggreen dot com dot au.
He says, I quote, who measures emissions? How are they measured?
Is the number auditored checked off on? And by who
is it measured? The same way? In every country? BHP
(00:27):
and fortesqu can measure their emissions. I'm assuming they have budgets,
but what about for smaller companies that aren't listed. I'm
no believer in conspiracy theories, however, this has always fascinated me,
the accuracy and validity of emissions measurements. It is a
great question and when it came in, I had no
idea the answer to it. So we've gone to an
expert in this space. Thomas Hodgson is a director at
(00:51):
ant Thesis, a sustainability consultancy. Thomas, Welcome to Fear and
Greed Q and A.
Speaker 2 (00:56):
Thanks for having me, Sean, how lovely to be here.
Speaker 1 (00:59):
I don't know where to start. I mean, I kind
of know about scope one, two and three emissions, but
how do they measure them. Where do we start?
Speaker 2 (01:06):
Yeah, great, great question. I mean even scope one, two,
three is not necessarily the most straightforward of concepts. So
just to summarize, Scope one emissions of the emissions, for example,
directly coming out of the back of your car if
you're driving an internal combustion engine and burning fossil fuel.
Scope two emissions would be the emissions associated with generating
(01:30):
electricity somewhere else that then you use in your car
or your home. And Scope three emissions would be emissions
that are attributable to the manufacture of that car in
another country, for example. So collectively, that's the primary focus
of emissions. And there is scopes above Scope three, but
(01:52):
they're not something that I work with closely, okay.
Speaker 1 (01:55):
So the idea is sort of things that you can
directly impact the car, the scape one. The next level
is two, the next level is three. And you know
when we talk about big business or business generally, we
talk about them working out the emissions ast escape three
emissions is the result of their third parties, their supplies
or that type of thing. To the nub of the question,
(02:19):
how do you measure it? Is there a measuring scope
or something?
Speaker 2 (02:22):
I mean, yeah, well, it's a fascinating field and I
personally started this journey, you know, following my conclusion of
my environmental engineering degree, I worked for the Federal Department
of Climate Change measuring Scope one two emissions for large
businesses in Australia under what's called the National Greenhouse and
Energy Reporting Scheme. So that's our federal scheme, and I
(02:45):
would say it's one of the best and most accurate
globally to measure scope on in two emissions. And the
way that you do it in that framework is that
you first choose which method within scope one that you're
going to use, so method two, three four, Method one
being the most simple way you, for example, apply a
(03:06):
default emissions factor for a killer liter of diesel used
or coal burnt or gas burnt, for example. And that's
the way that most companies estimate emissions.
Speaker 1 (03:19):
That's some sort of benchmarks that has been kind of
created and sourced scientifically. Yes, saying it broadly, if this
is the amount of diesel we use, this is the
amount of missions we put out.
Speaker 2 (03:31):
Yes, So for Scope one it's it's in the order
of two point seven tons of emissions per killer liter.
One thousand. Leaders of diesel burnt, and that's a pretty
common basis of estimation. And from there you would go
to a heart what's called a higher order method, so
you would you move up the accuracy but also the
(03:51):
administrative burden ranks, so method two, three, four, with method
four being the highest complexity, and that's where instead of
estimating emissions associated with your consumption by applying default factors,
you would actually measure what's coming out of your tailpipe
or of your industrial stack. We work a lot with combines,
for example, and we use method for what's called continuous
(04:14):
emissions monitoring or periodic emissions monitoring to measure the gas,
the methane and sere two coming out of underground coal mine,
for example. That's most accurate, but also the most burdensome
to implement.
Speaker 1 (04:27):
Okay, you're gonna have to dumb it down even further
for me, not anyone like you measure in terms of diesel.
But what if you're not using diesel? Is that a
really stupid question? I'm cringing here, Thomas as I ask
you that question.
Speaker 2 (04:42):
No, no, great question. So what are we measuring? Fundamental
is the question? And what's coming out the back of
a diesel burning car is not diesel. It's carbon dioxide,
which has a global warming potential of one. There's also hydrosoxide,
which is formed when you burn fossil fuel in the
(05:04):
presence of air, which is mostly nitrogen so the end too. Oh,
and that has a really high global warming potential. I
think it's two hundred and sixty five times CO two,
so really really persent. And there's also methane that comes
out of the back of your diesel car. And that
methane is basically a function of unburnt hydrocarbons or diesel
(05:27):
that didn't fully combust and it comes out as methink gas,
which itself has a high global warming potential of about
twenty eight.
Speaker 1 (05:34):
Okay. And so when we talk about agriculture, when we
talk about farming and cattle and methane emissions and it's
a big challenge to kind of produce feed to reduce
methane emissions. We use diesel as a catsual, but in
actual fact, what it is it's different elements that you're
measuring and you're putting their potential towards hurting the ozone layer.
Speaker 2 (05:58):
Well broadly, yes, so ozone depleting substances an entirely distinct
sort of concept and concern. There is some degree of overlap,
and that's because things that are ozone depleting and the
traditional classic case of this is CFCs. CFCs are ozone
depleting and also very very posent greenhouse gases. But the
(06:22):
primary focus of organizations in Australia is around the global
warming potential or the climate change impact of their owns.
Speaker 1 (06:30):
Yeah, okay, So going back to my cow question is
you know, farmers broadly, if you got you know, you're
one of the big Australian Pastoral company or something like that,
and you've got tens of thousands of cattle, you have
a rule of thumb do you for methane emissions based
on what the cattle are grazing on? And that's kind
of how you work it out.
Speaker 2 (06:50):
Yes, So agricultural emissions that are not captured by the
National Greenhouse and Energy Reporting Scheme, so there's not such
a formal and curate framework to measure those emissions. There
are many agricultural organizations they seek to quantify emissions associated
with the agricultural activities, including livestock husbandry. To estimate those missions,
(07:14):
the general approach is to apply a default emissions factor
per head of cuttle. That's quite common.
Speaker 1 (07:20):
Okay, what about carbon capture and storage? So that's you know,
if we're going to hit some of our targets, I
don't see how we can avoid going big on carbon
capture and storage. Maybe we miss our targets. Maybe that's
the answer. How do you measure that?
Speaker 2 (07:36):
Yeah, so the carbon culture and storage, Like, the classic
way this works is that you get a stream of
CO two, so carbon dioxide coming out the top of
a C core power station. You compress that gas and
you put it through a pipe, and you put it
into an underground reservoir where it stays in perpetuity. And
(07:58):
there's a range of men mechanisms that you would utilize
to quantify the mass flow rate of that gas. But
in really short terms, in simple terms, it's a little
bit like measuring the water coming through your tarp at home,
and the government has a meter out the front of
your house to understand how much water you're consuming. In
a similar way, you would measure how much CO two
(08:20):
is going through the pipe ultimately for sequestration in the
carbon culture and storage facility, and so.
Speaker 1 (08:27):
You basically need that close to wherever the carbon is
being emitted.
Speaker 2 (08:32):
Yeah, the closer the better, so you can do it
further away, but that adds to cost because you need
to put pipelines in place, and you need to expand
energy to move the carbon dioxide from where it originates
to where it's going to be sequestered.
Speaker 1 (08:47):
Thomas, I reckon I've learned more in the last nine
or ten minutes than most interviews I do, because I
now kind of get the idea that you can measure it,
because I've always been suspect on that, but you really can.
Even if it's a rule of thumb, it certainly is
a pretty good guiding principle.
Speaker 2 (09:03):
Absolutely, And the way I see it is that decarbonization
and heading towards NAT zero twenty fifties is a big
challenge for all industry, and it's really a journey. You know,
it's a journey that's going to go across decades, and
the start of that journey is measuring your emissions and
the next step in that journey is measuring them more accurately,
(09:24):
and then you seek to obey to mitigate those emissions.
Speaker 1 (09:27):
Thomas, thank you for talking to fear and greed.
Speaker 2 (09:29):
No worries great, Thank you for having me.
Speaker 1 (09:31):
That was Thomas Hodson, director of a Thesis, a sustainability consultancy.
If you've got something you'd like to know, then send
through your question, just as listen Peter did, via the
website Fearangreed dot com dot au, or on LinkedIn, Instagram
or at Facebook. I'm Sean Almer and this is Fear
and Greed Q and day
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