PCS TR 008 Industrial Energy Efficiency Methodology_v1.0
Document Control
Document identification
Document code: PCS-TR-008
Title: Industrial Energy Efficiency Methodology
Scope: Defines eligibility conditions, boundary and baseline determination rules, additionality requirements, monitoring requirements, leakage treatment, and calculation procedures for PCS projects that reduce energy consumption in industrial facilities through efficiency measures and claim emission reductions from reduced fuel combustion and/or reduced purchased electricity relative to a baseline.
Version history and change log
Table DC-1. Revision history
v1.0
TBD
Draft
Release for public consultation
PCS
TBD
Superseded versions
No superseded versions for v1.0.
Governance note on versioning and archiving
Only the latest approved version of this Methodology shall be used. Superseded versions shall be archived and retained for traceability and audit purposes. Printed or downloaded copies are uncontrolled; stakeholders must refer to the PCS-published version as the authoritative current version.
Chapter 1 - Purpose
1.1 Purpose
This methodology establishes activity-specific requirements for quantifying emission reductions from industrial energy efficiency projects under the Planetary Carbon Standard (PCS). It defines conditions for eligibility, baseline determination requirements, monitoring requirements, and conservative calculation rules for projects that reduce energy consumption per unit of output or for a defined industrial service.
1.2 Intended use
This methodology shall be applied to projects implemented in industrial facilities that reduce energy consumption through efficiency measures and demonstrate measurable and verifiable reductions in GHG emissions relative to a baseline scenario.
Emission reductions may arise from reduced on-site combustion of fuels, reduced purchased electricity, or both. The project proponent shall quantify reductions using monitored data and conservative baseline procedures as defined in this methodology.
1.3 Relationship to other PCS documents
This methodology shall be applied together with applicable PCS standards, any PCS methodological tools referenced by this methodology, and the approved PCS templates and forms used for project submission and monitoring/reporting. In the event of inconsistency, higher-order PCS documents prevail.
1.4 Binding nature
Requirements expressed using “shall” are mandatory. Where this methodology references a methodological tool, that tool shall be applied as specified. PCS templates and forms required for submissions shall be used without substitution unless an explicit exception is granted through the PCS deviation process.
1.5 Version control and applicability
This methodology is subject to controlled versioning. The applicable version is the version in force at the time of project submission unless transition provisions specify otherwise. Revisions do not apply until they enter into force under PCS governance procedures.
Chapter 2 - Scope and Applicability
2.1 Scope
This methodology applies to projects that implement energy efficiency measures in industrial facilities and claim emission reductions arising from reduced energy use relative to a baseline. The methodology covers measures that reduce consumption of purchased electricity, consumption of thermal energy, and/or consumption of fuels combusted on-site, provided the project can establish a credible baseline and monitor energy use and relevant production or service variables.
The methodology is designed for industrial processes where output, throughput, or service delivery can be defined and where energy performance can be quantified in a manner that is complete, conservative, and verifiable.
2.2 Eligible project types
Eligible project types include, where the conditions in this chapter are met, improvements such as process optimization, equipment replacement, motor system upgrades, compressed air system improvements, steam system upgrades, waste heat recovery, high-efficiency boilers, furnace upgrades, kiln efficiency improvements, and other measures that reduce energy consumption for a defined industrial output or service.
Projects may include multiple measures. Where multiple measures are implemented, the project proponent shall ensure that baseline determination and monitoring capture the combined effect without double counting.
2.3 Eligible energy sources and emission reduction pathways
Emission reductions under this methodology may arise from reduced combustion of fuels on-site, reduced purchased electricity, reduced purchased thermal energy, or a combination of these. The project proponent shall identify the relevant pathways and include all relevant sources in the boundary.
Where the project reduces energy consumption but results in increased consumption of another energy source or increases emissions elsewhere, such effects shall be included as project emissions or leakage as applicable.
2.4 Exclusions and non-applicable cases
This methodology shall not be applied to cases where baseline energy use cannot be credibly established, where monitoring cannot produce auditable evidence of energy consumption and relevant activity drivers, or where reductions are claimed without appropriate normalization to production or service variables where such normalization is necessary to avoid over-crediting.
Projects that primarily change the energy supply source rather than reduce energy consumption are not covered by this methodology unless PCS provides explicit provisions for such switching within this methodology or through a separate methodology.
2.5 Applicability conditions
A project shall be applicable under this methodology only where it can demonstrate all of the following. The project can define a measurable industrial output or service that the energy consumption supports. The project can establish a baseline scenario using historical facility data or other credible baseline evidence consistent with PCS rules. The project can monitor energy consumption and relevant drivers in a manner sufficient to quantify emission reductions conservatively for each monitoring period. The project can identify and account for any material changes that affect energy use, production, or boundary conditions.
Chapter 3 - Conditions for Eligibility
3.1 General eligibility requirement
A project shall be eligible under this methodology only where it is demonstrably within scope, meets all applicability conditions, and can be validated and verified using auditable records. A project shall not proceed to registration where the methodology is not fully applicable or where required evidence cannot be produced in a verifiable form.
3.2 Project activity eligibility
The project activity shall consist of one or more energy efficiency measures implemented within an industrial facility that reduce energy consumption for a defined industrial output or service relative to the baseline scenario.
The project shall clearly identify the implemented measure(s), the affected process units, the energy streams and meters involved, the operating conditions, and the boundary for quantification. The project shall define whether the efficiency improvement is equipment replacement, retrofit, operational optimization, process redesign, heat recovery, system improvement, or a combination.
Where multiple measures are implemented, the project proponent shall demonstrate that the combined effect is quantified without double counting and that interactions among measures are addressed conservatively.
3.3 Facility and process definition
The project shall define the industrial facility and the specific process unit(s) or system(s) affected by the efficiency measures. The project shall define the industrial output or service for which efficiency is assessed. Where output varies over time, the project shall apply appropriate normalization to avoid attributing production changes to efficiency improvements.
If the industrial output or service cannot be defined in a way that allows conservative baseline comparison, the project shall not be eligible under this methodology.
3.4 Legal compliance and permits
The project shall comply with all applicable laws and regulations. The project proponent shall demonstrate that all material permits and approvals required for installation, modification, and operation of the affected industrial equipment and systems have been obtained and are valid at the time of registration.
Where the project involves changes to fuel systems, boilers, furnaces, emissions controls, or other regulated equipment, the project proponent shall demonstrate compliance with relevant environmental and safety requirements.
3.5 Right to claim emission reductions and avoidance of double counting
The project proponent shall demonstrate legal authority and contractual rights to claim the emission reductions resulting from the project activity. The project shall not claim emission reductions that are already claimed or used under another program, instrument, or mechanism unless an explicit and verifiable non-overlap arrangement exists and is consistent with PCS requirements on double counting.
Where the facility participates in energy efficiency obligation schemes, performance-based incentives, regulated cap-and-trade systems, or utility demand-side management programs, the project proponent shall disclose participation and demonstrate that reductions are not double counted and that PCS claims remain valid under applicable rules.
3.6 Start date and prior consideration
The project shall define a clear project start date. The project proponent shall identify the implementation date(s) for each measure, including commissioning or acceptance dates that demonstrate when the measure became operational.
Where required by PCS rules, the project proponent shall demonstrate prior consideration of carbon finance through contemporaneous evidence. Absence of credible contemporaneous evidence, where required, shall render the project ineligible.
3.7 Baseline eligibility and boundary consistency
The project shall identify a credible baseline scenario consistent with this methodology. The baseline scenario shall not be defined in a manner that inflates emission reductions. Project and baseline boundaries shall be consistent for all emission sources relevant to quantification.
Where baseline energy use is derived from historical data, the project shall demonstrate that the baseline period is representative of normal operations and that the data are complete and auditable. Where the baseline must be adjusted for changes in output, operating conditions, product mix, raw material quality, or other drivers, the adjustment method shall be conservative and supported by evidence.
3.8 Additionality eligibility
The project shall demonstrate additionality in accordance with PCS requirements and this methodology. The project shall not be eligible where the measure is legally mandated, required by an enforceable permit condition, or otherwise non-additional under PCS rules.
Where energy management plans, performance standards, or mandatory audits require implementation of specific measures or performance levels, any reductions attributable to such mandatory requirements shall not be credited as additional.
3.9 Monitoring system eligibility
Eligibility under this methodology is conditional on auditable monitoring. The project shall have a monitoring system capable of producing complete and auditable records for all parameters required to quantify emission reductions for each monitoring period.
The monitoring system shall include, at minimum, reliable measurement or auditable determination of energy consumption for relevant energy sources, and measurement of the activity drivers required for normalization where applicable. The project shall demonstrate that data can be traced to source records and independently reproduced.
If monitoring is not feasible at validation for the parameters required by this methodology, the project shall not be eligible for registration under this methodology.
3.10 Treatment of material changes
The project proponent shall disclose any material change that may affect applicability, baseline, additionality, monitoring, or quantification. Material changes include changes in production lines, major equipment replacements unrelated to the project, capacity expansions, product mix shifts, raw material changes, operating hours, boundary changes, and changes to energy supply arrangements.
Where a material change occurs, the project proponent shall apply PCS procedures for post-registration changes and shall obtain approval where required prior to claiming credits for the affected period.
3.11 Specific exclusion triggers
A project shall be deemed not eligible under this methodology where any of the following apply. Baseline energy use cannot be credibly established using representative and auditable data. Energy consumption or relevant activity drivers cannot be monitored or determined in a verifiable manner. The project’s claimed reductions are primarily due to reduced production, curtailed activity, or other non-efficiency causes that cannot be separated conservatively. The measure is legally required or mandated. Double counting risk exists due to unclear ownership or overlapping claims.
3.12 Eligibility evidence requirements
Eligibility shall be supported by documentary evidence sufficient for validation and verification. Evidence shall be traceable, dated where relevant, and auditable.
Table 3-1. Minimum eligibility evidence (non-exhaustive)
Measure description and implementation
Technical description, equipment specifications, design documents, commissioning and acceptance records
Facility and process definition
Process flow diagrams, boundary definition, affected process units, definition of output/service and relevant drivers
Baseline period and data
Baseline datasets, meter records, utility invoices, fuel purchase records, production records, explanation of representativeness
Permits and compliance
Permits and approvals, compliance documentation, safety and environmental clearances
Right to claim / non-overlap
Contracts, declarations, program participation disclosures, evidence preventing double counting
Start date / prior consideration (if required)
Investment decision documents, procurement records, contemporaneous communications
Monitoring feasibility
Meter register, calibration plan/records, data management procedures, QA/QC procedures
Material change controls
Change control procedures, records of changes, PCS approvals where applicable
Chapter 4 - Project Boundary
4.1 Boundary principle
The project boundary shall include all emission sources and energy flows necessary to quantify, in a complete and conservative manner, the net emission reductions attributable to the energy efficiency measure(s). The boundary shall be defined such that baseline and project scenarios are comparable and exclusions do not result in over-crediting.
The boundary shall be defined at the level of the affected industrial process unit(s) or system(s) and shall reflect where energy consumption changes occur due to the project activity. The boundary definition shall align with how the baseline is established and how monitoring will be conducted.
4.2 Boundary components
The project boundary shall include the affected process unit(s) or system(s) and all relevant energy sources used to deliver the same industrial output or service within the boundary. The boundary shall include, as applicable, fuel combustion sources, purchased electricity consumption, purchased thermal energy, and any significant auxiliary systems that materially influence the energy consumption of the affected unit(s).
Where the project affects multiple units, the boundary shall either include all affected units or define separable sub-boundaries for each unit, provided that separation is auditable and does not increase credited reductions.
4.3 Greenhouse gases included
Baseline emissions and project emissions shall include all relevant greenhouse gases associated with energy consumption changes within the boundary. For fuel combustion, emissions shall include CO₂ and may include CH₄ and N₂O where required by PCS and where emission factors include those gases. For purchased electricity, emissions shall be quantified in CO₂e using the applicable electricity emission factor.
Where the project causes changes in process emissions independent of energy use, such emissions shall be included only where they are within scope and can be quantified conservatively under PCS rules. This methodology primarily addresses energy-related emissions.
4.4 Electricity boundary treatment
Where purchased electricity is included, the boundary shall include all electricity consumption that is directly associated with the affected process unit(s) and required to deliver the defined industrial output or service.
Where the facility includes shared electrical systems, the project proponent shall apply sub-metering or auditable allocation to isolate electricity consumption attributable to the affected unit(s). Where isolation is not feasible, the boundary shall be expanded to include the relevant shared system in a manner that remains conservative and verifiable.
4.5 Fuel and thermal energy boundary treatment
Where fuel combustion is included, the boundary shall include the relevant boilers, furnaces, heaters, kilns, engines, or other combustion equipment supplying thermal or mechanical energy to the affected process unit(s). Fuel use shall be measured or determined auditablely for the boundary.
Where purchased thermal energy or steam is included, the boundary shall include the purchased energy delivered to the affected unit(s) and the measurement points used to quantify it.
4.6 Treatment of production, throughput, and operating conditions
The boundary shall be defined such that changes in production, throughput, operating hours, product mix, or raw material quality do not create artificial emission reductions.
Where energy consumption is materially dependent on production or throughput, the project shall define an output or service variable and include the monitoring of that variable as part of the boundary and quantification approach. The project shall not claim emission reductions that arise from reduced production or curtailed activity rather than efficiency improvements.
4.7 Boundary exclusions
The following are excluded from the boundary under this methodology, unless explicitly required elsewhere in PCS. Upstream lifecycle emissions from manufacturing and construction are excluded. Indirect market effects and policy impacts are excluded. Emissions from unrelated facility activities not causally linked to the efficiency measures are excluded.
Exclusions shall be justified and shall not increase credited reductions.
4.8 Boundary table
Table 4-1. Boundary sources and inclusion status (industrial energy efficiency)
Energy consumption of affected process unit(s)
Yes
Yes
Core activity where efficiency improvement occurs.
Purchased electricity for affected unit(s)
Conditional
Conditional
Included where electricity consumption changes due to the measure and is measurable.
Fuel combustion supplying affected unit(s)
Conditional
Conditional
Included where fuel use changes due to the measure and is measurable.
Purchased steam/thermal energy to affected unit(s)
Conditional
Conditional
Included where it changes due to the measure and is measurable.
Auxiliary systems materially affecting energy consumption
Conditional
Conditional
Included where they materially change due to the measure.
Production/output/service variable
Yes
Yes
Required to normalize where output affects energy use.
Unrelated facility processes
No
No
Excluded to prevent boundary inflation and irrelevance.
Upstream lifecycle emissions
No
No
Excluded under this methodology.
4.9 Documentation requirements
The project proponent shall provide boundary documentation sufficient for validation and verification. Documentation shall include a process description and boundary narrative, process flow diagrams, identification of affected units, identification of relevant meters and measurement points, definition of output or service variable(s) where normalization is required, and evidence showing that boundary definition is consistent between baseline and project scenarios.
Failure to demonstrate an unambiguous and conservative boundary definition and auditable measurement of energy flows and activity drivers shall render the project ineligible for issuance for the affected periods.
Chapter 5 - Baseline Scenario and Baseline Emissions
5.1 Baseline principle
The baseline scenario shall represent the plausible energy consumption and associated emissions that would occur in the absence of the energy efficiency measure(s), while delivering the same defined industrial output or service. The baseline shall be defined in a transparent, conservative, and verifiable manner and shall not be selected or structured to inflate emission reductions.
Baseline and project scenarios shall be comparable. Where output, throughput, operating conditions, product mix, or raw material quality materially affect energy consumption, the baseline shall incorporate appropriate normalization so that emission reductions are not attributed to reduced production or other non-efficiency causes.
5.2 Identification of the baseline scenario
The baseline scenario shall be identified by describing the energy consumption that would have occurred for the defined output or service in the absence of the project activity. The baseline shall be based on historical facility performance, measured energy use in a representative baseline period, and documented operating conditions.
The project proponent shall define the baseline period and demonstrate that it is representative of normal operations, is supported by complete and auditable data, and does not include abnormal events that would bias the baseline upward. Where the baseline period includes abnormal events, the project proponent shall justify any data exclusions and demonstrate that the resulting baseline remains conservative.
5.3 Baseline approach for industrial energy efficiency
Baseline emissions shall be quantified using one of the following approaches, applied consistently across the crediting period unless PCS-approved changes occur.
5.3.1 Historical performance baseline
Under a historical performance baseline, baseline energy use is derived from measured historical energy consumption for the affected boundary during a representative baseline period, normalized to the output or service variable(s) where required.
Under this approach, baseline energy consumption for monitoring period shall be calculated by applying baseline energy intensity to the monitored output or service delivered in period , with adjustments where necessary to account conservatively for material changes in operating conditions that affect energy use and are not attributable to the project activity.
5.3.2 Benchmark or reference baseline
Under a benchmark or reference baseline, baseline energy use is derived from an applicable benchmark energy intensity or reference performance standard, applied to the monitored output or service in period . Benchmarks shall be credible, relevant, and conservative and shall be justified for the facility context.
Benchmark baselines shall not be used where they would result in a higher baseline energy use than would be supported by historical facility performance unless PCS rules explicitly allow and the project proponent demonstrates conservativeness.
5.4 Normalization requirements
Where energy consumption is materially influenced by output, throughput, operating hours, product mix, or raw material quality, baseline and project energy use shall be normalized to an output or service variable. The project proponent shall define the variable and demonstrate that it is measurable, relevant, and supported by auditable records.
Normalization shall be performed in a manner that avoids attributing changes in production or operating conditions to the efficiency measure. If normalization cannot be performed credibly and conservatively, the project shall not claim emission reductions under this methodology.
5.5 Baseline energy consumption determination
Baseline energy consumption for monitoring period shall be determined separately for each relevant energy source included in the boundary, including purchased electricity, fuels combusted on-site, and purchased thermal energy where applicable.
Baseline energy consumption for period shall reflect the quantity of energy that would have been consumed to deliver the monitored output or service in period under baseline conditions.
5.6 Baseline emissions calculation
Baseline emissions shall be calculated by multiplying baseline energy consumption by the relevant emission factors.
Table 5-1. Baseline emissions equations
Purchased electricity
Fuel combustion
Purchased thermal energy
Total baseline emissions
Where:
is baseline emissions in monitoring period 
(tCO₂e).
is baseline electricity consumption in monitoring period (MWh).
is electricity emission factor applicable to monitoring period (tCO₂e/MWh).
is baseline fuel consumption of fuel 
in monitoring period (fuel units).
is emission factor for fuel (tCO₂e/fuel unit).
is baseline purchased thermal energy in monitoring period (energy units).
is emission factor for purchased thermal energy (tCO₂e/energy unit).
All units and conversions shall be explicitly defined and consistently applied.
5.7 Baseline validity, updating, and material changes
Baseline parameters shall remain valid only where they continue to represent the defined boundary and baseline operating conditions. The project proponent shall assess baseline representativeness at each verification.
Where material changes occur that affect energy use independently of the project activity, including capacity expansion, process changes, significant product mix changes, significant raw material changes, or major equipment replacements not part of the project, the project proponent shall apply conservative baseline adjustments or baseline re-establishment consistent with PCS procedures. The project shall not retain an outdated baseline that would overstate reductions.
Electricity emission factors and other external emission factors shall be updated where required by PCS rules or where the official source updates them in a manner applicable to the monitoring period.
5.8 Documentation requirements
The project proponent shall document baseline scenario identification, baseline period selection, representativeness assessment, normalization method where applicable, baseline energy consumption determination, emission factor selection, and any adjustments applied.
Documentation shall include baseline datasets and source records, production or service records used for normalization, evidence supporting representativeness, and calculation files sufficient for independent replication.
Chapter 6 - Additionality
6.1 Requirement
The project activity shall be additional. The project proponent shall demonstrate that, in the absence of carbon credit revenues, the energy efficiency measure(s) would not have occurred as implemented, would not have been implemented at the same scale and timing, or would not have delivered the same energy performance improvement.
Additionality shall be assessed at validation. Where PCS requires reassessment at renewal or where material changes occur that affect the additionality basis, additionality shall be reassessed in accordance with PCS procedures.
6.2 Regulatory surplus test
The project shall not be eligible where the measure(s) implemented, or the achieved energy performance level, are required by law, regulation, enforceable permit condition, mandatory energy efficiency standards, legally binding energy management obligations, enforceable audit-and-implement requirements, or other binding compliance obligations applicable to the facility or the affected equipment.
The project proponent shall identify all applicable regulations and policy instruments relevant to the affected process unit(s) and energy systems. The project proponent shall demonstrate that the measure is not mandated and that credited reductions are not merely compliance.
Where regulations require an outcome but allow multiple compliance pathways, the project proponent shall demonstrate that the specific measure and its performance level are not required and that the claimed reductions exceed compliance requirements.
6.3 Investment analysis or barrier analysis
The project proponent shall demonstrate additionality using either an investment analysis or a barrier analysis. The selected approach shall be justified and supported by auditable evidence.
6.3.1 Investment analysis
Where investment analysis is applied, the project proponent shall demonstrate that the measure(s) are not financially attractive without carbon revenues, or that carbon revenues are decisive to meet an investment threshold required by decision-makers.
The analysis shall reflect the information available at the time of the investment decision and be based on project-specific data. The analysis shall include capex, opex impacts, maintenance impacts, expected energy cost savings, relevant production impacts, downtime impacts, financing terms, and any incentives, rebates, or subsidies received for the measures. The project shall not omit material incentives or savings that would materially affect the conclusion.
Sensitivity analysis shall be conducted on material parameters. Conservative assumptions shall be applied so that the role of carbon revenue is not overstated.
6.3.2 Barrier analysis
Where barrier analysis is applied, the project proponent shall demonstrate the presence of at least one credible barrier that would prevent implementation of the measures in the absence of carbon revenues and that the project overcomes the identified barrier(s).
Barrier claims may include limited access to finance, high cost of capital, technology performance risk, operational disruption risk, procurement constraints, organisational barriers, or information barriers. Claims shall be facility-specific, evidenced, and causally linked to implementation decisions. Generic claims that “industry is slow to adopt efficiency” without evidence shall not be accepted.
6.4 Common practice assessment
The project proponent shall assess whether the measure(s) and achieved performance level are common practice in the applicable context. The applicable context shall be defined considering relevant geography, sector, process type, and regulatory environment.
If similar measures at comparable performance levels are common practice, the project shall not be eligible unless the project proponent demonstrates that the project differs materially in a manner that affects likelihood of implementation and that the difference is not the result of regulatory requirements.
6.5 Timing integrity and prior consideration
Where required by PCS rules, the project proponent shall demonstrate prior consideration of carbon finance through contemporaneous evidence. Absence of credible contemporaneous evidence, where required, shall render the project ineligible.
Where the measure is implemented, operational, or financially closed prior to entering PCS, the project proponent shall demonstrate eligibility under PCS rules applicable to start date and prior consideration.
6.6 Additionality failure conditions
A project shall be deemed not additional where the measure is legally mandated, where the investment analysis demonstrates strong financial attractiveness without carbon revenue and the project cannot show carbon revenue is decisive, where claimed barriers are not supported by facility-specific evidence, where the measures and performance levels are common practice without credible differentiation, or where timing and prior consideration requirements are not met.
6.7 Documentation requirements
The project proponent shall provide documentation sufficient for validation. Documentation shall include the regulatory analysis, the selected additionality demonstration method and supporting evidence, common practice evidence and analysis, and any prior consideration evidence required by PCS rules. Documentation shall be traceable, dated where relevant, and auditable.
Chapter 7 - Project Emissions and/or Removals
7.1 Principle
Project emissions shall include all GHG emissions within the project boundary that are attributable to the project scenario and that are relevant to the quantification of net emission reductions under this methodology.
Industrial energy efficiency projects primarily reduce energy-related emissions. However, project emissions may increase due to changes in fuel use, auxiliary equipment operation, increased use of certain utilities, or other effects that occur as a consequence of the measure. Where such increases are attributable and material, they shall be included so that net emission reductions are not overstated.
This methodology does not quantify removals. No removals shall be claimed under PCS-TR-008.
7.2 Sources of project emissions
Project emissions shall be assessed and included where applicable, based on the measure(s) implemented and the defined boundary.
Project emissions may include emissions from on-site fuel combustion, emissions associated with purchased electricity, emissions associated with purchased thermal energy, and any additional emission sources introduced by the measure such as auxiliary equipment or backup systems that consume fuel or electricity.
Where the project reduces one energy source but increases another energy source, the increase shall be included within project emissions where it occurs within the boundary. If the increase occurs outside the boundary and is attributable, it shall be treated as leakage under Chapter 8.
7.3 Determination of project energy consumption
Project energy consumption shall be determined for each monitoring period using monitored data for the relevant energy sources within the boundary. Energy consumption shall be determined for purchased electricity, fuels combusted on-site, and purchased thermal energy where applicable.
Where monitoring relies on multiple meters, invoices, and operational logs, the project proponent shall reconcile data sources and maintain an auditable trail from source records to reported totals.
7.4 Project emissions calculation
Project emissions shall be calculated by multiplying monitored project energy consumption by the relevant emission factors for the monitoring period.
Table 7-1. Project emissions equations
Purchased electricity
Fuel combustion
Purchased thermal energy
Total project emissions
Where:
is project emissions in monitoring period (tCO₂e).
is project electricity consumption in monitoring period (MWh).
is project fuel consumption of fuel in monitoring period (fuel units).
is project purchased thermal energy consumption in monitoring period (energy units).
, , and are emission factors applicable to monitoring period .
includes any other included project emission sources required for completeness.
All units and conversions shall be explicitly defined and consistently applied.
7.5 Treatment of rebound and operational effects
Where the measure causes an increase in activity that increases energy use within the boundary, the increased energy use shall be reflected in monitored project energy consumption and therefore in project emissions.
The project shall not claim emission reductions based on engineering estimates that ignore operational changes. Measured energy consumption and measured output or service variables shall govern quantification.
7.6 Treatment of maintenance and downtime effects
Energy use during maintenance shutdowns, start-up periods, abnormal operations, or downtime shall be included in the monitoring period totals unless the baseline treatment addresses such periods consistently and conservatively. Excluding high-energy abnormal events from project data without comparable baseline treatment is not permitted.
7.7 Excluded project emissions
Upstream lifecycle emissions from manufacturing, construction, and decommissioning are excluded from quantification under this methodology.
7.8 Documentation requirements
The project proponent shall document the assessment of project emission sources, the boundary application, the monitoring approach, emission factor selection, and calculation procedures. Documentation shall include source records for energy consumption, reconciliation of datasets where multiple sources exist, and evidence sufficient to allow validation and verification of reported project emissions.
Chapter 8 -Leakage
8.1 Principle
Leakage is an increase in GHG emissions that occurs outside the project boundary and is attributable to the implementation of the project activity. Leakage shall be assessed and included in the net emission reduction calculation where it is measurable, attributable, and material.
Leakage shall not be used as a discretionary adjustment. Where leakage is included, the approach shall be transparent, conservative, and supported by evidence.
8.2 Leakage assessment for industrial energy efficiency
Industrial energy efficiency projects typically reduce energy consumption within a facility. Leakage is generally limited, but it may occur where the project causes activity to shift outside the project boundary or creates increased emissions elsewhere that are attributable to the project.
The project proponent shall assess leakage based on the facility context, the affected process unit(s), and the nature of the measures implemented. Where a leakage source is plausible, the project proponent shall document the assessment and provide evidence sufficient for validation and verification.
8.3 Potential leakage sources and treatment
Leakage may occur where production is shifted outside the project boundary in a manner attributable to the project and results in increased emissions elsewhere. Leakage may occur where the project causes outsourcing of energy-intensive steps that were previously performed within the boundary. Leakage may occur where the project introduces increased consumption of inputs or utilities outside the boundary that result in higher emissions and are attributable to the measure, such as outsourced compressed air supply, outsourced steam generation, or increased external processing.
Leakage shall not include general market effects or changes that cannot be causally linked to the project activity. The project shall not claim negative leakage.
Where a leakage source is plausible and material, the project proponent shall quantify leakage emissions conservatively using measured data where feasible. Where measured data are not feasible, conservative estimates may be used only where justified and supported by evidence.
8.4 Quantification of leakage
Leakage emissions shall be quantified only where attributable, measurable, and material. Where quantified, leakage emissions for monitoring period shall be calculated and deducted from emission reductions.
Table 8-1. Leakage accounting
Identification
Leakage sources shall be identified based on project context and measure type.
Materiality
Materiality shall be justified with evidence and conservative reasoning.
Quantification
Measured data shall be used where feasible; otherwise conservative estimation shall be justified.
Deduction
Quantified leakage emissions shall be deducted in net emission reduction calculation.
Where leakage cannot be quantified due to lack of data, the project proponent shall apply a conservative approach that does not result in over-crediting, including conservative deductions where PCS permits such treatment.
8.5 Documentation requirements
The project proponent shall document leakage assessment, inclusion or exclusion rationale, data sources, assumptions, materiality justification, and any calculations performed. Evidence shall be sufficient to allow validation and verification of leakage conclusions.
Chapter 9 - Net GHG Impact and Crediting
9.1 Principle
Emission reductions credited under this methodology shall be calculated for each monitoring period as the net difference between baseline emissions and the sum of project emissions and leakage emissions. Crediting shall be based on monitored and verifiable data. No crediting shall be issued for reductions that are not supported by auditable records.
Emission reductions shall represent efficiency improvements for the defined output or service and shall not be claimed for reductions that arise primarily from reduced production, curtailed activity, or other non-efficiency causes that are not separated and treated conservatively.
9.2 Net emission reductions
Net emission reductions for monitoring period shall be calculated as follows.
Table 9-1. Net emission reduction equation
Net emission reductions
Where:
is emission reductions in monitoring period (tCO₂e).
is baseline emissions in monitoring period (tCO₂e), determined in Chapter 5 and normalized where required.
is project emissions in monitoring period (tCO₂e), determined in Chapter 7.
is leakage emissions in monitoring period (tCO₂e), determined in Chapter 8.
Emission reductions shall not be claimed for periods in which 
. Where is negative, it shall be reported and shall not be carried forward to offset positive emission reductions in other monitoring periods.
9.3 Creditable emission reductions and issuance
Creditable emission reductions shall equal verified emission reductions after application of any PCS-required adjustments, conservativeness provisions, or other deductions applicable to the project, including those arising from uncertainty treatment, monitoring non-conformities, or approved deviations.
Issuance shall occur only after successful verification and PCS review in accordance with PCS procedures. The project proponent shall ensure that all parameters and calculations used for the monitoring period are traceable to source records and can be independently reproduced.
9.4 Rounding and units
Energy quantities shall be expressed in units consistent with monitored sources, with electricity expressed in MWh and fuels expressed in their metered units with explicit conversion factors where used. Emissions and emission reductions shall be expressed in tCO₂e.
Rounding shall be applied conservatively. Where rounding is required, values shall be rounded down to the nearest whole unit at the stage of credit issuance. Intermediate calculations shall retain sufficient decimal precision to avoid systematic inflation of results.
9.5 Crediting period and renewal
The crediting period length, renewal rules, and any limits on total crediting duration shall be applied in accordance with PCS requirements. The project proponent shall apply baseline update and additionality reassessment requirements applicable at renewal.
9.6 Aggregation across multiple measures and units
Where multiple measures or affected units are included, emission reductions shall be calculated consistently across the defined boundary and summed only where double counting is demonstrably prevented. Where different energy sources and emission factors are involved, emissions shall be calculated separately per source and summed to derive total emissions.
9.7 Documentation requirements
For each monitoring period, the project proponent shall provide a complete calculation record that includes baseline emissions, project emissions, leakage emissions, net emission reductions, normalization variables where applicable, and any deductions or adjustments applied. Records shall be sufficient to support validation and verification.
Chapter 10 - Monitoring Requirements
10.1 Objective
The objective of monitoring under this methodology is to produce complete, accurate, and auditable data sufficient to quantify baseline emissions, project emissions, leakage where applicable, and net emission reductions for each monitoring period. Monitoring shall enable independent verification of reported results and shall support conservative normalization to output or service variables where required.
Monitoring shall be implemented as a system. The system shall include metering hardware, data collection and storage procedures, QA/QC controls, calibration and maintenance arrangements, reconciliation checks, and record retention practices.
10.2 Monitoring period
The project proponent shall define monitoring periods in accordance with PCS requirements. For each monitoring period, the project shall compile monitored data and supporting evidence that cover the full period without gaps. Where data gaps occur, the project proponent shall apply conservative gap-filling rules as set out in this chapter.
10.3 Parameters to be monitored
The project proponent shall monitor the parameters in Table 10-1, as applicable to the boundary and the implemented measure(s). Where a parameter is not applicable, the project proponent shall justify non-applicability and demonstrate that exclusion does not result in over-crediting.
Table 10-1. Monitoring parameters (minimum)
(EC^{PJ,ELEC}_{t})
Project electricity consumption within boundary in period (t)
MWh
Projects with electricity pathway
Facility meters or sub-meters; utility invoices where appropriate
Continuous; aggregated per period
Calibration; reconciliation to invoices
(FC^{PJ}_{i,t})
Project fuel consumption of fuel (i) within boundary in period (t)
Fuel unit
Projects with fuel combustion pathway
Fuel flow meters, tank logs, purchase records
Continuous/event-based; aggregated
Fuel reconciliation; plausibility checks
(EC^{PJ,THERM}_{t})
Project purchased thermal energy within boundary in period (t)
Energy unit
Projects with purchased thermal pathway
Supplier meters, invoices, delivery logs
Continuous/event-based; aggregated
Reconciliation to invoices
Output/service variable (Q_{t})
Output, throughput, or service delivered in period (t) used for normalization
Facility-specific
Projects requiring normalization
Production records, weighbridges, process counters
At least daily; aggregated per period
Cross-checks; consistency controls
Product mix / operating condition indicators
Variables required to adjust baseline conservatively where relevant
Facility-specific
Where baseline depends on such drivers
Production and quality records, lab results, operating logs
As relevant; aggregated per period
Data integrity checks
Baseline EF(s)
Electricity and fuel emission factors applied
tCO₂e/unit
As applicable
Official datasets / authoritative sources
At least per period
Version control; applicability checks
Meter inventory and locations
Identification of meters used for boundary energy streams
N/A
All projects
At commissioning; update upon change
Meter register; diagrams
Change control
Calibration records
Calibration and accuracy evidence
N/A
All projects
Per applicable standard; at least annually unless stricter
Certificates; maintenance logs
Traceability; corrective actions
Measure operation records
Evidence the measure is installed and operational
N/A
All projects
Continuous / event-based
O&M logs, control system records
Completeness; change control
10.4 Metering and measurement requirements
Energy consumption within the boundary shall be measured using suitable meters. Where possible, sub-metering shall be used to isolate energy use attributable to affected unit(s). Where sub-metering is not feasible, allocation may be used only where it is auditable and conservative and where it does not increase credited reductions.
Fuel consumption shall be measured using fuel flow meters or auditable fuel balance approaches. Where purchase records are used, reconciliation to stock changes and operational use shall be performed to prevent understatement.
Output or service variables used for normalization shall be measured using auditable production records or equivalent systems. Where production records are subject to manual entry, controls shall be implemented to prevent retroactive manipulation.
10.5 Data quality and QA/QC
Monitoring data shall be subject to QA/QC controls sufficient to ensure accuracy and integrity. The project shall implement documented procedures for data collection, processing, review, and change control, including an auditable trail from raw records to reported totals.
Internal consistency checks shall be applied, including reconciliation of electricity consumption to invoices, reconciliation of fuel consumption to purchase and stock records, and plausibility checks comparing energy consumption against output or service levels.
10.6 Data gaps and conservative treatment
Where monitored data are missing, corrupted, or otherwise unavailable, the project proponent shall apply a conservative approach to gap-filling that does not increase credited reductions.
Where energy consumption data are missing and no reliable substitute exists, missing data shall be treated conservatively. Conservative treatment shall not result in lower project energy consumption or higher baseline energy consumption than would be supported by credible evidence.
Where output or service data required for normalization are missing, the project shall apply conservative substitution that does not increase claimed emission reductions. Where credible conservative quantification cannot be demonstrated, the project shall apply conservative deductions up to and including zero issuance for the affected period.
All data gaps and treatments shall be documented with the period affected and the impact on results.
10.7 Record retention and accessibility
The project proponent shall retain monitoring records and supporting evidence for a period consistent with PCS requirements and sufficient to allow validation and verification across the crediting period and subsequent audits.
Records shall be stored to prevent loss and unauthorised modification and shall be made available to the VVB and PCS upon request.
10.8 Monitoring report content
For each monitoring period, the project proponent shall prepare a monitoring report that includes the monitoring period definition and operational summary, the set of measures in operation, the metering configuration and any changes, monitored energy consumption and output/service data, applied emission factors, data QA/QC, data gaps and conservative treatments, leakage assessment where applicable, and the full calculation of net emission reductions.
Chapter 11 - Uncertainty and Conservativeness
11.1 Principle
Uncertainty shall be managed to protect environmental integrity. Where uncertainty affects the quantification of emission reductions, the project proponent shall apply conservative approaches that avoid over-crediting.
Uncertainty treatment shall be transparent, documented, and verifiable. Weak data shall not be compensated by favourable assumptions.
11.2 Identification of uncertainty sources
The project proponent shall identify and document the sources of uncertainty that may materially affect baseline emissions, project emissions, leakage, and net emission reductions.
For industrial energy efficiency projects, uncertainty commonly arises from energy metering accuracy, allocation where sub-metering is incomplete, fuel quantity measurement and conversion factors, emission factor selection, production or service measurement used for normalization, baseline representativeness and baseline period selection, changes in operating conditions and product mix, and the presence of data gaps or monitoring system changes.
Only uncertainty sources that affect the quantified difference between baseline and project scenarios for the defined boundary and output or service shall be considered for conservative treatment under this methodology.
11.3 Metering and measurement uncertainty
Meters and measurement systems used for quantification shall meet applicable accuracy requirements and shall be calibrated and maintained. The project proponent shall demonstrate meter integrity, calibration validity, and data traceability for the monitoring period.
Where meter accuracy is degraded, calibration is overdue, integrity cannot be demonstrated, or data are incomplete, the project proponent shall apply conservative treatment to the affected monitoring data. Conservative treatment shall not result in a lower quantified project energy consumption or a higher quantified baseline energy consumption than would be supported by credible evidence.
Where allocation is used due to incomplete sub-metering, uncertainty shall be treated conservatively. Allocation methods shall not be used to selectively reduce measured project energy consumption or inflate baseline energy consumption.
11.4 Normalization uncertainty
Where normalization to output or service variables is required, the project proponent shall ensure that the selected variable is measurable, relevant, and supported by auditable records. The project shall maintain consistency in variable definition, measurement approach, and aggregation across monitoring periods.
Where output or service records are incomplete, inconsistent, or subject to unverifiable adjustment, the project shall apply conservative treatment that prevents over-crediting. Conservative treatment may include excluding affected intervals, applying conservative baseline adjustments that reduce claimed reductions, or applying deductions up to and including zero issuance for the affected monitoring period where integrity cannot be established.
Normalization methods shall not be used to attribute changes in production, product mix, or operating conditions to the project activity without evidence.
11.5 Baseline representativeness uncertainty
Baseline determination shall rely on representative data. Where baseline period selection, baseline data completeness, or baseline operating conditions are uncertain, the project proponent shall apply conservative baseline choices that do not increase credited reductions.
Where material changes occur that affect energy use independently of the project activity, the project proponent shall apply conservative baseline adjustments or baseline re-establishment consistent with PCS procedures. Retaining an outdated baseline that would overstate reductions is not permitted.
11.6 Emission factor uncertainty
Emission factors shall be applied consistently and updated when required. The project shall not select emission factor sources, temporal windows, or factor variants to increase emission reductions.
Where multiple credible emission factors exist, the project shall apply the factor that best represents the relevant energy source and monitoring period and does not increase credited reductions due to methodological choice. Where data quality is limited, conservative factors shall be applied.
11.7 Data gaps and estimation
Data gaps increase uncertainty. Gap-filling shall follow the conservative rules in Chapter 10 and shall not increase credited reductions.
Where data gaps affect energy consumption, output/service variables, or baseline adjustments, the project shall apply conservative substitution such that project energy use is not understated and baseline energy use is not overstated. Where credible conservative quantification cannot be demonstrated, the project shall apply conservative deductions up to and including zero issuance for the affected period.
Any estimation method that materially increases emission reductions shall require explicit justification and may be rejected at verification.
11.8 Conservative adjustments and deductions
Where uncertainty cannot be adequately reduced through improved monitoring or credible data sources, the project proponent shall apply conservative deductions to emission reductions for the affected monitoring period.
Deductions may be applied to baseline emissions, project emissions, or final emission reductions, provided the approach is transparent and results in under-crediting rather than over-crediting.
11.9 Documentation requirements
The project proponent shall maintain documentation sufficient for validation and verification. Documentation shall include the identification of material uncertainty sources, meter specifications and calibration records, allocation methods where used, normalization variable definitions and measurement records, baseline representativeness assessment and any adjustments, emission factor sources and update records, and records of data gaps, estimation methods, and conservative deductions applied.
Chapter 12 - Validation and Verification Guidance
12.1 Objective
This chapter defines the minimum validation and verification checks that shall be applied by the Validation and Verification Body (VVB) to determine whether the project is eligible, correctly applies this methodology, and has quantified emission reductions in a complete and conservative manner.
Where the VVB identifies non-conformities that materially affect applicability, baseline integrity, normalization integrity, additionality, monitoring integrity, emission factor applicability, leakage treatment, or quantification results, the VVB shall not issue a positive opinion for registration or issuance unless the non-conformities are corrected and corrective evidence is provided.
12.2 Validation scope
At validation, the VVB shall confirm that the project meets eligibility and applicability conditions and that the project design and monitoring system can implement this methodology as written. The VVB shall assess whether the project boundary is clearly defined at the level of affected process unit(s) and energy flows, whether the industrial output or service variable is clearly defined where normalization is required, and whether baseline data and monitoring arrangements are sufficient to support conservative quantification.
The VVB shall confirm that the project activity consists of energy efficiency measures rather than activity reduction. The VVB shall assess whether the project has a credible approach to separate energy performance improvements from changes in production, operating conditions, or product mix.
12.3 Validation checks on eligibility and applicability
The VVB shall confirm that the project is within scope and that exclusion triggers do not apply. The VVB shall assess whether the project can establish a credible baseline using representative and auditable data and whether required parameters can be monitored.
The VVB shall verify legal compliance and permitting for the measure(s) implemented and confirm that the project proponent has the right to claim emission reductions and that double counting risks are addressed, including participation in other programs that may claim the same reductions.
The VVB shall assess whether the project start date and any prior consideration requirements under PCS are met.
12.4 Validation checks on boundary definition and metering architecture
The VVB shall assess whether the boundary definition is unambiguous and consistent between baseline and project scenarios and whether included energy sources are appropriate to capture the effect of the measure(s).
The VVB shall verify the metering architecture and confirm that meters and measurement systems can produce auditable data for electricity consumption, fuel consumption, purchased thermal energy where applicable, and the output or service variables required for normalization. Where sub-metering is not available and allocation is proposed, the VVB shall assess whether allocation is auditable and conservative and does not increase credited reductions.
The VVB shall assess the data management system and confirm that an auditable trail can be maintained from raw records to reported values.
12.5 Validation checks on baseline scenario and baseline determination
The VVB shall assess whether the baseline period is representative of normal operations and whether baseline data completeness and integrity are sufficient. The VVB shall assess any exclusions of baseline data and confirm that exclusions are justified and do not inflate baseline energy use.
Where normalization is required, the VVB shall assess the selected output or service variable, confirm its relevance, and verify that the normalization method is appropriate and supported by auditable records. The VVB shall assess whether baseline adjustments for operating conditions, product mix, or raw material quality are justified, conservative, and replicable.
The VVB shall verify that baseline emission factors are applicable and that the approach to updating emission factors is defined and consistent with PCS requirements.
12.6 Validation checks on additionality
The VVB shall assess the additionality demonstration for completeness and credibility. The VVB shall confirm that the measure(s) are not legally mandated and that the selected investment or barrier analysis is supported by project-specific evidence consistent with decision-time context.
Where investment analysis is used, the VVB shall assess whether energy cost savings, incentives, rebates, subsidies, and other material revenues and benefits are included. Where barrier analysis is used, the VVB shall assess whether barriers are evidenced, facility-specific, and causally linked to implementation decisions.
The VVB shall assess the common practice assessment and confirm that the applicable context is appropriate and that conclusions are supported by evidence.
12.7 Verification scope
At verification, the VVB shall confirm that monitoring data and calculations for each monitoring period are complete, accurate, and traceable, and that the project remains eligible under this methodology.
The VVB shall verify that the project boundary and monitoring system have not changed in a manner that affects baseline comparability, normalization integrity, monitoring completeness, or quantification without appropriate PCS approval.
12.8 Verification checks on monitoring data integrity
The VVB shall verify monitored energy consumption for the boundary, including electricity consumption, fuel consumption, and purchased thermal energy where applicable. The VVB shall reconcile reported totals against source records such as meter datasets, invoices, fuel purchase and stock records, and operational logs.
The VVB shall verify the monitoring of output or service variables used for normalization and confirm that reported values are supported by auditable production records. The VVB shall assess whether changes in production, operating conditions, or product mix could explain claimed reductions and whether normalization has been applied correctly.
Where allocation is used due to incomplete metering, the VVB shall verify the allocation basis and assess whether it is conservative and consistently applied.
12.9 Verification checks on baseline application and emission factors
The VVB shall confirm that baseline parameters and baseline emission factors applied correspond to the defined boundary and monitoring period and that any required updates have been applied. The VVB shall assess whether baseline representativeness remains valid and whether material changes require conservative baseline adjustment or re-establishment.
The VVB shall verify that emission factors applied for electricity, fuels, and thermal energy are applicable to the monitoring period and are not selected to increase credited reductions.
12.10 Verification checks on calculation accuracy
The VVB shall reproduce emission reduction calculations using verified inputs and shall confirm correct equations, units, and deductions. The VVB shall confirm that emission reductions are not claimed for periods with zero or negative results and that rounding is conservative.
The VVB shall verify that data gaps and conservative treatments are applied as required and that any estimation does not increase credited reductions.
12.11 Non-conformities and corrective actions
The VVB shall classify non-conformities based on materiality. Material non-conformities shall be corrected before a positive validation opinion or verification statement is issued.
Where corrections require changes to baseline datasets, normalization approach, metering records, emission factor selection, or calculation methods, the VVB shall verify revised materials and confirm that revisions do not introduce over-crediting.
12.12 Common failure conditions under this methodology
A project shall be treated as having a material integrity failure where the VVB determines that baseline representativeness cannot be established, where monitoring data are incomplete or not auditable, where normalization is required but cannot be verified, where claimed reductions are attributable primarily to reduced output rather than efficiency, or where emission factors are not applicable to the monitoring period.
Where integrity cannot be established for a monitoring period, the VVB shall apply conservative outcomes up to and including zero issuance for the affected period.
12.13 Documentation requirements
The project proponent shall provide the VVB and PCS with all documents and datasets necessary to perform the checks in this chapter. Evidence shall be organised, traceable, and sufficient to support replication of results and independent assessment.
Chapter 13 - References
13.1 General requirement
The project proponent shall use credible, publicly available, and verifiable sources for all default values, emission factors, conversion factors, and technical assumptions applied under this methodology. References shall be sufficiently specific to allow independent replication, including the title, issuing entity, version number or publication date, and the relevant sections or datasets.
Where multiple credible sources exist for a parameter, the project proponent shall justify the selection and shall apply conservative choices where uncertainty exists.
13.2 Minimum reference categories
This methodology relies on minimum reference categories where applicable. PCS documents apply, including the relevant PCS standards, this methodology, any referenced PCS methodological tools, and applicable PCS templates and forms. Host country laws and regulations apply where they affect industrial operations, energy use, measurement requirements, and environmental compliance. Official electricity emission factor publications or officially recognised electricity system emissions datasets apply for purchased electricity.
National or international fuel emission factors, net calorific values where required, and combustion guidelines apply for fuel combustion emissions. Technical standards for energy metering, calibration, and measurement accuracy apply to all meters used for monitoring. Technical references relevant to industrial performance baselines and energy intensity normalization apply where such approaches are used.
13.3 Citation and recordkeeping requirements
All sources used shall be cited in the project documentation and retained as part of the project record. Where a data source is updated periodically, the project proponent shall retain the specific version used for each monitoring period and demonstrate consistency with baseline and emission factor update requirements.
Annex A - Parameters and Default Values
A.1 General
This annex specifies the minimum parameters required to implement this methodology. Project proponents shall use measured data where required. Default values may be used only where explicitly allowed and shall be justified as applicable and conservative.
(EC^{PJ,ELEC}_{t})
Project electricity consumption within boundary in period (t)
MWh
Electricity pathway
Meter/sub-meter data; invoices as supporting evidence
Continuous; aggregated per period
No
(EC^{BL,ELEC}_{t})
Baseline electricity consumption for period (t) after normalization
MWh
Electricity pathway
Baseline intensity applied to monitored output; or benchmark where justified
Per period
No
(FC^{PJ}_{i,t})
Project fuel consumption of fuel (i) within boundary in period (t)
Fuel unit
Fuel pathway
Flow meters, tank logs, purchase and stock records
Continuous/event-based; aggregated
No
(FC^{BL}_{i,t})
Baseline fuel consumption of fuel (i) for period (t) after normalization
Fuel unit
Fuel pathway
Baseline intensity applied to monitored output; or benchmark where justified
Per period
No
(EC^{PJ,THERM}_{t})
Project purchased thermal energy within boundary in period (t)
Energy unit
Thermal pathway
Supplier meters, invoices, delivery logs
Event-based/continuous; aggregated
No
(EC^{BL,THERM}_{t})
Baseline purchased thermal energy for period (t) after normalization
Energy unit
Thermal pathway
Baseline intensity applied to monitored output; or benchmark where justified
Per period
No
(Q_{t})
Output/throughput/service delivered in period (t)
Facility-specific
Normalization required
Production records, weighbridge, counters
At least daily; aggregated
No
(EF^{ELEC}_{t})
Electricity emission factor applicable to period (t)
tCO₂e/MWh
Electricity pathway
Official dataset applicable to grid/system and period
At least per period
Yes, where PCS recognises the source as default
(EF_{FUEL,i})
Emission factor for fuel (i)
tCO₂e/fuel unit
Fuel pathway
Official factors or authoritative references
When updated or annually
Yes, if authoritative published factors are used
(EF^{THERM}_{t})
Emission factor for purchased thermal energy
tCO₂e/energy unit
Thermal pathway
Supplier factor or authoritative source
When updated or per period
Limited; only with conservative justification
Conversion factors
Energy content/unit conversions where required
Various
Where non-energy units used
Authoritative sources; documented assumptions
When applied/updated
Limited; only if authoritative and conservative
Annex B - Worked Example
B.1 Example purpose and limitations
This worked example is illustrative and demonstrates calculation logic. Project proponents shall use project-specific monitored data, the correct baseline normalization approach, and applicable emission factors.
B.2 Example scenario and inputs
Assume an industrial facility implements a motor system upgrade that reduces electricity consumption for a process line. Output varies, so normalization is applied using tonnes of product.
Baseline electricity intensity is established from a representative baseline period. The monitoring period is one year.
Table B-1. Example inputs for monitoring period
Output 
250,000 tonnes
Monitored production
Baseline electricity intensity
0.80 MWh/tonne
Derived from baseline period
Project electricity consumption 
175,000 MWh
Metered
Electricity emission factor 
0.600 tCO₂e/MWh
Example only
Fuel baseline and project
Not applicable
Electricity-only case
Leakage 
0 tCO₂e
None identified
B.3 Baseline electricity consumption and baseline emissions
B.4 Project emissions
B.5 Net emission reductions
No credits are issued for any period in which the result is zero or negative.
Annex C - Monitoring Data Sheet
C.1 Monitoring log requirements
The project proponent shall maintain a monitoring log that allows independent reproduction of monitoring period totals and linkage to raw records. The monitoring log shall be maintained for each monitoring period and retained with supporting evidence.
Table C-1. Monitoring data sheet (minimum fields)
Monitoring period ID
Unique identifier
Text
Yes
Period start date/time
Start of monitoring period
YYYY-MM-DD hh:mm
Yes
Period end date/time
End of monitoring period
YYYY-MM-DD hh:mm
Yes
Facility and boundary description
Defined unit(s) included
Text
Yes
Measure(s) in operation
Measures included in period
Text
Yes
Electricity meter ID(s)
Meter identifiers
Text
Conditional
Electricity consumption
Period total electricity
MWh
Conditional
Fuel type(s)
Fuels used in boundary
Text
Conditional
Fuel consumption 
Period total fuel use
Unit as metered
Conditional
Purchased thermal energy
Thermal energy type
Text
Conditional
Thermal energy consumption 
Period total thermal energy
Energy unit
Conditional
Output/service variable definition
Definition of
Text
Conditional
Output/service
Period total output/service
Facility unit
Conditional
Baseline approach
Historical / benchmark
Text
Yes
Baseline intensity value(s)
Intensity applied
Unit
Yes
Baseline energy consumption values
, ,
Units
Yes
Emission factor source/version
Electricity/fuel/thermal EF source
Text
Yes
Calculated baseline emissions
Period baseline emissions
tCO₂e
Yes
Calculated project emissions 
Period project emissions
tCO₂e
Yes
Leakage identified
Yes/No
Text
Yes
Leakage description and ref.
Description and evidence
Text
Conditional
Calculated leakage
Period leakage emissions
tCO₂e
Conditional
Calculated reductions 
Period net reductions
tCO₂e
Yes
Data gaps present
Yes/No
Text
Yes
Gap treatment description
Method and conservative treatment
Text
Conditional
Calibration certificate refs
References
Text
Yes
Prepared by / date
Responsible person and date
Text / YYYY-MM-DD
Yes
Internal review by / date
Reviewer and date
Text / YYYY-MM-DD
Yes
Definitions and Acronyms
D.1 Definitions
For the purposes of this methodology, the following definitions apply.
Activity driver means a measurable variable that explains energy use in the affected boundary, including output, throughput, operating hours, product mix, or other variables used for normalization or baseline adjustment.
Additionality means the demonstration that the project activity results in emission reductions that would not have occurred in the absence of the project and the incentive from carbon crediting.
Baseline emissions (BE_t) means the GHG emissions that would occur in monitoring period t in the absence of the project activity, associated with the energy consumption that would have occurred to deliver the same defined output or service.
Baseline energy consumption means the quantity of energy that would have been consumed in the baseline scenario during monitoring period t to deliver the monitored output or service in period t, determined using the baseline approach and normalization where required.
Baseline energy intensity means baseline energy use per unit of defined output or service, derived from a representative baseline period or an applicable benchmark, expressed in units such as MWh per tonne, GJ per unit output, or other appropriate units.
Baseline period means the historical time period selected to establish representative baseline energy performance, using complete and auditable data.
Baseline scenario means the most plausible energy consumption and associated emissions that would occur in the absence of the project activity while delivering the same defined output or service, determined in accordance with Chapter 5.
Benchmark baseline means a baseline approach in which baseline energy intensity is based on an applicable benchmark, reference performance standard, or sectoral best practice level, justified for the facility context and applied conservatively.
Boundary means the defined process unit(s), system(s), and energy flows included for quantification under this methodology, including the energy streams and activity drivers required for normalization.
Calibration means the procedure of verifying and adjusting a meter or measurement device against a reference standard to ensure that accuracy requirements are met.
Data gap means a period for which required monitoring data are missing, corrupted, or otherwise unavailable for quantification.
Emission factor means the emissions per unit of energy consumed, expressed in tCO₂e per unit energy or per unit fuel quantity, applicable to the energy source and monitoring period.
Energy consumption means the quantity of energy used within the project boundary during a monitoring period, including purchased electricity, fuels combusted on-site, and purchased thermal energy, expressed in consistent energy units.
Energy efficiency measure means a technology change, equipment replacement, retrofit, process modification, operational optimization, or system improvement implemented to reduce energy consumption for a defined industrial output or service.
Energy performance means the relationship between energy consumption and the defined output or service, expressed as absolute energy use for a fixed output/service or as energy intensity where normalization is required.
Historical performance baseline means a baseline approach in which baseline energy intensity is derived from measured energy consumption and activity driver data from a representative baseline period and applied to monitored output or service during monitoring.
Industrial facility means a site where industrial production, processing, manufacturing, or similar operations occur and where energy is consumed to deliver defined products or services.
Leakage (LE_t) means an increase in GHG emissions occurring outside the project boundary that is attributable to the project activity and is measurable, attributable, and material under this methodology.
Material change means a change in production capacity, process configuration, product mix, raw material quality, operating schedule, boundary definition, metering configuration, energy supply arrangement, or other conditions that may affect baseline comparability, monitoring, or quantification under this methodology.
Monitoring period means the time interval for which monitored data are aggregated and emission reductions are quantified and verified for issuance purposes.
Normalization means the procedure used to adjust energy consumption to account for changes in activity drivers such that energy performance is compared on a like-for-like basis between baseline and project scenarios.
Output or service variable (Q_t) means the measurable quantity of industrial output, throughput, or service delivered during monitoring period t that is used for normalization where energy consumption depends materially on activity level.
Project emissions (PE_t) means GHG emissions occurring within the project boundary in monitoring period t that are attributable to the project scenario and relevant to the quantification of net emission reductions under this methodology.
Representative operation means operating conditions that reflect normal production and energy use patterns, excluding abnormal events that would materially bias baseline or project energy performance.
Rebound effect means an increase in energy use resulting from behavioural or operational responses to efficiency improvements, including increased utilisation of equipment or increased production, where such increases occur within the boundary and are reflected in monitored energy consumption.
Validation and verification means independent assessment activities performed to confirm eligibility, methodological correctness, data integrity, and quantified emission reductions for registration and issuance under PCS.
D.2 Acronyms
Table D-1. Acronyms
BE
Baseline Emissions
EF
Emission Factor
ER
Emission Reductions
GHG
Greenhouse Gas
LE
Leakage Emissions
MWh
Megawatt-hour
PE
Project Emissions
PCS
Planetary Carbon Standard
PCC
Planetary Carbon Credit
QA/QC
Quality Assurance / Quality Control
VVB
Validation and Verification Body
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