Deadline to submit GHG Inventory to CETESB ends on October 31

The Greenhouse Gas (“GHG”) Emissions Inventory is a structured and accounting-based survey of both general and individual GHG emissions, as well as of environmental impacts and other aspects related to climate change.

In compliance with applicable regulations, projects licensed in the State of São Paulo must annually report their respective emissions for the period from January to December of the preceding year.

The inventory must be submitted by October 31, in accordance with the activities listed in Board Decision No. 83/A of the Environmental Company of the State of São Paulo (“CETESB”), issued in October 2024.

Board Decision No. 083/2024/A issued by CETESB establishes the criteria for preparing the emissions inventory.

Annex 1 to the decision provides for the criteria to be observed when submitting the calculation memorandum.

Annex 2, in turn, specifies the voluntary reporting of removals, credits, and purchase options.

The following activities are required to submit the GHG emissions inventory to CETESB:

• Aluminum production;
• Cement production;
• Coke oven activities;
• Metal mineral sintering facilities;
• Pig iron or steel production facilities with a capacity exceeding 22,000 tons/year;
• Ferrous metal foundries with a production capacity exceeding 7,500 tons/year;
• Glass production facilities, including those intended for the production of glass fibers, with a production capacity exceeding 7,500 tons/year;
• Petrochemical industry;
• Oil refineries;
• Ammonia production;
• Adipic acid production;
• Black carbon production;
• Ethylene production;
• Silicon carbide production;
• Calcium carbide production;
• Caustic soda production;
• Methanol production;
• Dichloroethane (“EDC”) production;
• Vinyl chloride (“VCM”) production;
• Ethylene oxide production;
• Acrylonitrile production;
• Phosphoric acid production;
• Nitric acid production;
• Thermoelectric power plants fueled by fossil sources;
• Pulp and paper industry using lime kilns;
• Lime production;
• Airports with annual passenger traffic of 5 million or more;
• Landfills receiving an annual average of 400 tons/day or more of municipal solid waste;
• Other facilities that emit, under Scope 1, more than 20,000 tons/year of CO₂ equivalent.

The submission of emissions inventories must be carried out electronically, including the presentation of calculation memoranda that allow for data importation and handling, in accordance with the criteria provided for in Annex 1.

The results must be presented in tons of gas and tons of CO₂ equivalent, segmented by scope and emission source category.

According to the provisions of CETESB Board Decision No. 083/2024/A, the GHG emissions to be reported must be classified under Scopes 1, 2 or 3, as detailed below.

SCOPE 1

Scope 1 includes direct GHG emissions from sources that are owned or controlled by the project:

• Stationary combustion: Emissions resulting from the burning of fuel in fixed power generation equipment – whether mechanical, thermal, or electrical – such as engines, boilers, furnaces, and other similar devices.
• Mobile combustion: Emissions resulting from general transportation activities (operational fleet), including motor vehicles, ships, forklifts, aircraft, and similar equipment.
• Fugitive emissions: GHG releases into the atmosphere associated with the storage, production, processing, transmission, or use of gases. Examples include fire extinguishers (CO₂); substations (SF₆); refrigeration and air conditioning equipment (HFC or PFC); natural gas pipelines (CH₄); open-pit and underground mines (CH₄); and controlled gas releases during oil and natural gas production operations.
• Industrial processes: Emissions resulting from chemical or physical transformations, excluding combustion, such as calcination processes, catalytic cracking in petrochemical operations, among others.
• Agricultural: Non-mechanical emissions from agricultural or livestock activities, including – but not limited to – the application of fertilizers, soil management, rice cultivation, and enteric fermentation.
• Land use change: Emissions associated with the conversion between different land use categories, including – but not limited to – deforestation and crop substitution.
• Solid waste and liquid effluents: Emissions resulting from the treatment of solid waste and liquid effluents, including incineration of residues, waste management, landfill decomposition, composting, effluent treatment, among others.

SCOPE 2

With respect to Scope 2, indirect GHG emissions arising from the acquisition of electric and/or thermal energy consumed by the project can be reported using the location-based approach, which quantifies indirect electricity emissions based on the average emission factors of the Brazilian electrical grid.

SCOPE 3

Lastly, declarations under Scope 3 are voluntary. These are indirect GHG emissions resulting from activities carried out beyond the organizational boundaries, but arising from the reporting organization’s operations. This includes, but is not limited to, emissions resulting from the transportation of purchased materials or goods, the destination of sold products, and the extraction of raw materials used in the production process.

In addition, it is important to emphasize that the calculation of emissions must follow recognized methodologies and guidelines, such as the Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories, ABNT NBR ISO 14064-1 – Greenhouse Gases, and the Brazilian GHG Protocol Program.

Greenhouse gases such as carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), sulfur hexafluoride (SF₆), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and nitrogen trifluoride (NF₃) must be included in the emissions inventory.

The emissions to be reported in the inventory must include gross emissions; that is, any reductions from potential removals or the acquisition of carbon or similar credits must be disregarded.

On a voluntary basis, entrepreneurs may declare additional information regarding actions taken to mitigate or offset emissions at the site where their activities are carried out, in compliance with the criteria established in Annex 2.

Detailed information on the application of calculation methodologies can be found on the CETESB website, under the “Climate Change” tab.

Demarest’s Environmental and ESG teams are available to provide any additional clarifications as may be necessary.