Emission Factor Selection: How to Choose Data Sources

Selecting the right emission factors is one of the most important — and often overlooked — parts of greenhouse gas (GHG) reporting. For small and growing businesses (SMEs), this choice determines how accurately your energy use, fuel consumption, and waste activities translate into CO₂e (carbon dioxide equivalent) emissions.

The good news? You don’t need to be a climate scientist to get it right. You just need to understand where emission factors come from, which ones to use for your business, and how to apply them consistently under the CSRD, ESRS, or VSME Standard frameworks.

What Is an Emission Factor?

An emission factor converts measurable activity data (like litres of fuel, kWh of electricity, or kilometres travelled) into CO₂e emissions. Each factor represents the average emissions produced per unit of activity — for example:

Using the correct factor ensures your reported GHG emissions are credible, comparable, and compliant with EU standards.

Understand how CO₂e is used in CSRD reporting →

Why Choosing the Right Source Matters

Emission factors vary across data providers and years due to changes in fuel mixes, technology, or efficiency. For instance:

• The EEA (European Environment Agency) updates national grid factors annually.
• The UK DEFRA dataset reflects fuel composition and transport trends.
• The IPCC provides global baseline factors suitable when no national data exists.

Using outdated or mismatched sources can distort your results — making your emissions appear higher or lower than reality. Under the ESRS E1 (Climate Change) standard, companies must disclose both their data sources and any assumptions used.

Recommended Data Sources for SMEs

When reporting under CSRD or VSME, you can use emission factors from any of the following reputable organisations:

Learn how to calculate Scope 1, 2, and 3 emissions under the GHG Protocol →

Step-by-Step: How to Select the Right Emission Factor

1. Identify the Activity Type

Start with your data sources:

• Electricity or heating → use EEA or national grid factors
• Fuel consumption → use DEFRA or IPCC
• Travel and logistics → use DEFRA or ICAO flight factors
• Waste and recycling → use EEA or ADEME

2. Match the Unit

Make sure the unit of your activity data matches the unit of your emission factor:

• kWh → electricity
• litres or m³ → fuels
• tonne-kilometres → freight transport

If units differ, convert before applying the factor.

3. Choose the Most Local Source

When possible, use country-specific data — for example, Germany’s grid is cleaner than Poland’s, so using the EU average could overstate your emissions. Local data provides better accuracy and supports CSRD’s goal of regional comparability.

4. Check the Year

Always use the most recent dataset available (ideally within 1–2 years). Outdated factors can misrepresent your emissions trends.

5. Document Your Sources

List all emission factors used in your sustainability report. Under the VSME Basic Module (B3), you should disclose:

• Source name and publication year
• Emission factor value and unit
• Any conversions or assumptions used

This transparency builds trust and simplifies updates in future reporting cycles.

See how SMEs can streamline energy data collection →

Example: Selecting Factors for an SME Office

Scenario: A 25-person IT company in Spain reports its annual emissions.

By clearly documenting its sources, the business ensures transparency and compliance with ESRS E1 and VSME guidance.

Discover how to report shared office energy use accurately →

Frequently Asked Questions

Can SMEs mix data from different sources?

Yes — that’s normal. You can combine EEA electricity data with DEFRA fuel data, as long as you document each source. Consistency matters more than using one provider.

What if my country doesn’t publish local emission factors?

Use IPCC or IEA datasets. They provide global averages suitable for small businesses and are fully acceptable under CSRD.

Should I update factors every year?

Yes. The EU encourages annual updates to reflect changes in grid emissions and energy mix. It also helps track progress over time accurately.

Do I need verification for emission factors?

Not necessarily. For SMEs, using recognised sources (EEA, DEFRA, IPCC) and keeping a clear record is sufficient for credibility and client reporting.

Key Terms

• Emission Factor: Conversion rate linking an activity (e.g., kWh, litre) to CO₂e
• CO₂e: Carbon dioxide equivalent, standard unit for all GHGs
• EEA: European Environment Agency, primary EU source for emission factors
• IPCC: UN Intergovernmental Panel on Climate Change, provides global standards
• DEFRA: UK government body publishing annual emission data for fuels and travel

Conclusion

Choosing the right emission factors is one of the simplest ways to improve the quality and credibility of your CSRD or VSME sustainability report. Start with recognised sources like the EEA, IPCC, or DEFRA, ensure your units align, and update data annually.

With a consistent approach, even small businesses can build reliable, transparent GHG inventories that stand up to client, investor, and regulatory expectations — without costly external consultants.

To help you track which emission factors and data sources you need, use our checklist generator:

This tool will help you identify all the data points you need to collect and ensure you’re using the right emission factors for each activity.