reports, extracts from the third-party providers' reports, etc.) for quality control and assurance purposes. Same process of data collection was followed for the few external data centers. Data collected in 2022 is not as accurate as originally expected and includes some key assumptions especially for scope 1 emissions. The process will continue to be improved in 2023. Emissions from the data centers that are hosted in our buildings are accounted in the building’s emissions. Regarding the fleet of vehicles (service cars) attached to the buildings and used for our direct operations, the calculation methodology is being revised and these emissions are not reported in 2022, they will be carried over to 2023. Company cars and vehicles used for home-to-worksite transport is reported in scope 3 (commuting). Annual GHG reporting is reviewed and validated by Technip Energies on an annual basis, as part of Technip Energies’ review process. The process is intended to ensure that the inventory is complete, accurate and maintaining continuous improvement and performance of any ongoing environmental sustainability reporting programs, KPIs and/or targets.
SCOPE 3 Scope 3 is mainly induced by our projects under development for our clients and is largely based on anticipated quantification before the plants are started-up and entered into operation. Most of our scope 3 represents life-cyle emissions of our projects
which are our “sold products” according to the Greenhouse Gas Protocol. Most of the upstream represents Technip Energies’ carbon footprint as main or EPC contractor while the downstream part represents the use of our “sold products” – the plants - by our clients. The GHG emissions calculations boundary limits (system boundaries) are the same as for our general contractual project scope (including by definition our subcontractors), which can be only a part of a larger project developed by our clients. Life-cycle emissions that are accounted are only those from projects that are in our portfolio; contracts that we did not win are excluded from the calculation. For both scopes, upstream and downstream, GHG emissions are calculated for the entire project lifetime from cradle to grave as a whole, including all Technip Energies partners’ scope of work (subcontractors, consortium partners, joint venture partners). If Technip Energies contract does not cover the full EPC scope (e.g. joint ventures or consortium partnerships), the whole project carbon footprint is assessed and only Technip Energies’ equity share is reported, while subcontracted activities are included in Technip Energies’ reporting into category 1 - Purchased goods and services. Technip Energies activities include projects that are developed for greenfield plants (new plants with no existing GHG emissions) or brownfield plants (existing plants that are modified and already with existing GHG emissions). For brownfield plants, Technip Energies GHG emissions shall only be representative of the overall Technip Energies scope, which means that only the GHG emissions induced by Technip Energies project scope are considered.
KEY ACCOUNTING PRINCIPLES
The approach of GHG emissions calculation and assessment can follow two philosophies which can be combined and added to ensure the completeness of the quantification: collecting data approach based on, if any, actual measured data.
This methodology is to be used for activities achieved (actual work); estimating approach based on data quantification. This methodology
is generally to be used for activities not yet achieved or when data are not fully available (remaining or planned work).
Technip Energies bases its calculations as much as possible on real data, measured or collected from customers and suppliers, and updates the calculations during the project development, on a regular basis to incorporate the project maturity, data availability or change or modification until the completion of the project. For example, if during the lifetime of a project, the configuration is planned to be changed moving from fossil energy produced in situ to electrification with renewable energy, the benefit of the change, if sufficiently documented and secured, would be incorporated in the calculation. If a carbon footprint calculation has not been performed for an on-going project within Technip Energies’ portfolio, the carbon footprint is estimated by extrapolation from other projects using GHG emissions per revenue or cost ratios. This approach is only applicable for the small projects. Progressive carbon footprint reporting mechanism is applied for Technip Energies’ on-going projects portfolio. The term “on-going projects” refers here to the projects under development between their contract award and 100% progress achieved. The part of the project carbon footprint, corresponding to the progress achieved on the reported year, is reported each year, from year of contract award and year of 100% progress is achieved. This approach is aligned with IFRS 15 related to revenue progress and recognition and allowed to align Technip Energies’ annual carbon footprint reporting with our annual revenue reporting. Although this approach is not presented in the GHG Protocol, it was deemed appropriate to Technip Energies’ company profile, which deals with major “sold” projects of values above Technip Energies’ own annual revenue and need several years of development between contract award and final acceptance.
DATA COLLECTION, MANAGEMENT AND CONTROL
Large volume of information is already collected in our databases and other IT tools for the needs of various existing activities developed on projects and for support functions. This information and its digitalization have been analyzed for this new purpose of GHG emissions quantification. Especially completeness and accuracy of the data and quantities have been checked and completed by estimating approaches where needed. We have used our engineering and construction expertise to make the quantification, based on physical, quantified, actual and certified data originally and already developed and used by other disciplines for other purposes. This approach guarantees a good level of accuracy of the calculated figures based on proven and reliable processes and data sources well tested internally and by our clients for decades. For this first year of reporting, the Climate Change and Actions teams has ensured the completeness of the reporting through centralized actions. In the future, decentralization will be deployed
Technip Energies GHG emissions scopes 1, 2 and 3: Overview of life cycle stages for typical onshore/offshore EPC projects
in order to make each project and each function owner of the process and responsible for the quality of data reported, and for the reduction actions to be implemented and tracked to meet our reduction ambitions. On projects, the Technip Energies Project Director is responsible for the carbon footprint quantification and the reduction objectives of his project. He may be assisted by a dedicated Project Carbon Manager but remains responsible for the quality and the accuracy of the quantification expected at each step of the project development in line with Technip Energies methodologies and guidelines even if the quantification is carried out by a JV partner or a specialized consultant or the Client or their own consultants. Annual GHG reporting is reviewed and validated by internal control, as part of Technip Energies’ review process. This process is intended to ensure that the inventory is complete, accurate and to maintain continuous improvement and performance of any ongoing sustainability reporting programs, KPIs and/or targets.
EMISSION FACTORS USED
The large volume of activities achieved on our projects needed to be rationalized at the right level of detail to be manageable. Semi- consolidation approaches were achieved. In parallel, the emission factors existing in numerous external databases (e.g. EcoInvent, International Energy Agency (IEA), Ademe, Inies, DEFRA, US EPA, Concawe) and provided by suppliers and vendors were analyzed, domains of applicability checked, adapted to our activities and combined for application to known and unknown quantities. An in-house and appropriate emission factors database has been developed for all our engineering disciplines to cover all our types of activities.
AVOIDED EMISSIONS
We believe we have to quantify the full CO2 impact of our offers, to drive our decisions and provide expert and decisive advice to our clients to meet their GHG emissions reduction targets. In 2022, we have also worked on defining our avoided emissions and its related methodology and guidelines. This scope represents the reduction of our clients’ emissions achieved thanks to our solutions/projects compared to a reference scenario or baseline without the solutions/projects (i.e. carbon capture units). Because of the different nature and variety of the solutions and projects that Technip Energies provide, we have decided, for this year, to focus this scope on carbon capture projects only. A similar calculation methodology as developed for scope 3 downstream, Use of sold product category, has been implemented for avoided emissions.
PRE-INVESTMENT STAGES OF FUTURE PROJECTS
While their carbon footprints do not appear as such in Technip Energies annual reporting, we also use these similar methodologies and approaches to estimate the full carbon footprint of future projects during pre-investment stages from conceptual to FEED up to EPC proposals. These approaches are sufficiently detailed that the parameters can be used at the design phase to lower a project’s overall carbon footprint, providing value for our clients, our decision-making processes and contributing to our sustainability offer.
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Impact Book
Technip Energies Sustainability Report 2022 . 8786 . Impact Book