PCS CN 002 Grid Emission Factors_v1.0

Document Control

Document identification

• Document code: PCS-CN-002

• Title: Grid Emission Factors

• Applies to: Methodologies that use grid electricity displacement and require PCS grid emission factors

• Purpose: Clarifies selection, application, and documentation expectations for PCS grid emission factors across monitoring periods

Version history and change log

Table DC-1. Revision history

Version	Date	Status	Summary of changes	Issued by	Approved by
v1.0	TBD	Draft	Release for public consultation	PCS	TBD

Governance note on versioning and archiving

Only the latest approved version of this Clarification Note shall be used. Superseded versions shall be archived and retained for traceability and audit purposes, consistent with PCS governance rules.

Chapter 1 - Purpose

This Clarification Note establishes additional, internationally consistent options to determine Grid Emission Factors (GEFs) for renewable energy and grid-connected mitigation projects under the Planetary Carbon Standard (PCS).

It integrates:

• methodological depth similar to leading legacy mechanisms,

• open-source global data references (UNFCCC, IPCC, IFI, IEA), and

• PCS-specific digital integrity requirements including on-chain GEF source hashing, traceability, and QA/QC controls.

This Clarification Note remains applicable until replaced by an updated consolidated PCS Methodology for Renewable Energy (PCS-RE-001) or a future PCS Methodology Toolbox.

Chapter 2 - Applicability

This guidance applies to:

• All renewable energy grid-connected projects (solar, wind, hydro, geothermal, biomass, waste-to-energy);

• All grid-displacement or grid-supply project activities under PCS methodologies;

• All retrofit, capacity expansion, and fossil-to-renewable switching projects;

• Projects using combined margin (CM), operating margin (OM), build margin (BM), or any hybrid grid-factor approach.

This Clarification Note supersedes any GEF guidance included in older PCS methodologies prior to 2025.

Chapter 3 - Hierarchy for Selecting Grid Emission Factors

PCS establishes the following hierarchy of acceptable GEF sources, in descending order of preference:

Tier 1 - Host-Party Issued or Authorized Factors

a. Host Party DNA / Ministry-issued grid emission factor, provided it:

• is publicly accessible;

• is no older than 3 years;

• specifies the calculation methodology (OM/BM/CM);

• is consistent with IPCC 2006 Guidelines.

b. Host Party Article 6 GEF Standardized Baseline, if officially approved through national or bilateral Article 6 frameworks.

GEF must be cryptographically hashed and stored on-chain as the official reference.

Tier 2 - UNFCCC Approved or Harmonized Factors

a. UNFCCC “Tool to calculate the emission factor for an electricity system” (CDM Tool 07, latest version) — if applicable and data are available.

b. UNFCCC Standardized Baseline (SB) for the Host Party or region. Where available, this is accepted as the authoritative grid factor.

Tier 3 - International Financial Institutions (IFI) Harmonized Grid Factors

Acceptable if Tier 1 or Tier 2 are not available. Examples include:

• World Bank

• Asian Development Bank

• African Development Bank

• EBRD harmonized CM factors

IFI factors must be:

• from recognized IFI publications,

• within a 3-year validity window,

• documented with data sources and calculation approach.

Tier 4 - International Energy Agency (IEA) National Grid Factors

Permitted only when Tiers 1–3 are unavailable.

IEA data must be:

• national-level CO₂/kWh factors;

• based on the latest available IEA Electricity Information;

• not older than 3 reporting years;

• used without adjustments unless transparently justified.

Tier 5 - Calculated Project-Specific Grid Factors

Used only when none of Tiers 1–4 are available. PPs may calculate the grid factor based on project-specific utility data, provided that:

• the grid utility provides primary fuel, dispatch, and generation data;

• raw data are auditable;

• calculation follows UNFCCC Tool 07 equations.

This requires VVB enhanced scrutiny and Registry risk flagging.

Chapter 4 - Data Validity and Time Boundaries

• GEF values older than 3 years from their publication date shall not be used.

• If the Host Party has updated GEF values, the most recent dataset must be used.

• If no new GEF exists and the last version is older than 3 years, the project must move to the next tier in the hierarchy.

• GEF values must be fixed at validation and remain stable throughout that monitoring period.

Chapter 5 - Documentation Requirements

Project Proponents must provide:

a. a complete citation of the GEF source;

b. version number, publication date, validity year;

c. detailed calculation sheets (for Tier 5);

d. raw data references (primary or secondary);

e. Host Party or institutional authorization (if applicable); and

f. a GEF Source Hash generated by the PCS Registry.

PCS requires all GEF documents to be uploaded in PDF or machine-readable format.

Chapter 6 - Blockchain Record Requirements (PCS Digital Integrity Rules)

To ensure traceability and immutability, the following must be recorded on-chain:

1. GEF Source Hash - cryptographic fingerprint of the dataset or document.

2. GEF Tier Classification - Tier 1 to Tier 5 label.

3. Effective Year and Validity Period - encoded in project metadata.

4. VVB Verification Hash - linking the GEF verification step in the VR.

5. Smart-Contract Enforcement - PCS registry blocks issuance if:

   • GEF hash is missing or invalid

   • source is older than 3 years

   • Tier hierarchy is not followed.

This ensures no project can bypass GEF selection rules.

Chapter 7 - QA/QC Requirements

• VVBs must cross-check GEF source validity, date, and tier compliance.

• All numerical factors must match uploaded documents exactly, verified via hash comparison.

• Any inconsistencies must be resolved before verification acceptance.

• PCS Secretariat conducts annual audits on GEF data integrity across all projects.

Chapter 8 - Prohibited Practices

1. Use of proxy grid factors from third-party reports (unless IEA or IFI).

2. Use of adjusted or manipulated GEF values not clearly documented.

3. Use of manufacturer default factors or project-internal assumptions.

4. Use of regional grid factors when national factors are available (unless justified).

5. Any GEF older than 3 years.

Chapter 9 - Applicability in Issuance and Verification

• GEF values used in validation must match the values recorded in verification.

• GEF metadata must be referenced in the Monitoring Report and Verification Report.

• Issuance smart-contracts tie the GEF source and version to the serial numbers of issued PCCs.

• If the GEF changes in future vintages, PCS treats each monitoring period independently.

Chapter 10 - Integration Into PCS Methodologies

For now, this Clarification Note applies as an overriding rule across all RE methodologies. Later, the content will be incorporated into the following PCS methodology documents:

• PCS-RE-001 Renewable Electricity Generation

• PCS-TOOL-03 Grid Emission Factor Calculation Tool

• PCS Guidance on Baseline and Monitoring for Grid Projects

Annex 1 – PCS Grid Emission Factor Selection Flow

1

Start

Begin GEF selection process.

2

Is there a Host Party DNA-issued GEF ≤ 3 years old?

Yes → Tier 1 No → Next Step

3

Is an UNFCCC Standardized Baseline or CDM Tool 07 dataset available?

Yes → Tier 2 No → Next Step

4

Is an IFI Harmonized GEF available (≤ 3 years old)?

Yes → Tier 3 No → Next Step

5

Are IEA national grid factors available (≤ 3 years old)?

Yes → Tier 4 No → Next Step

6

Can project-specific utility data support a calculation?

Yes → Tier 5 No → Not eligible

7

Final

None of the above conditions satisfied → Project is NOT eligible for GEF-based issuance under PCS

8

End

Complete