Offset Calculations
A sample of C3 Program participation calculations for one quarter of participation are detailed below. Please see How to Participate for documentation requirements and an outline of the participation process.
Establishing Baseline Ratios
To determine offsets generated, we start by calculating company-specific baseline cement to concrete ratios for each calendar quarter, based on participant cement usage in tons and concrete production in cubic yards for the past three years. All data is converted to pounds before starting Program calculations. The tables below show a sample participant’s historical data for Quarter 1 after conversion:
| Cement Used (lbs) | |||
|---|---|---|---|
| Past Year 1, Q1 | Past Year 2, Q1 | Past Year 3, Q1 | Average |
| 15,505,000 | 16,170,000 | 15,750,000 | 15,808,333 |
| Concrete Manufactured (lbs) | |||
|---|---|---|---|
| Past Year 1, Q1 | Past Year 2, Q1 | Past Year 3, Q1 | Average |
| 103,250,000 | 109,550,000 | 107,800,000 | 106,866,667 |
The baseline cement to concrete ratio for Quarter 1 is calculated using the 3-year averages of cement used and concrete manufactured.
| Baseline Ratio | = | Cement Used (lbs) | = | 15,808,333 lbs | = | 0.1479 |
| Concrete Manufactured (lbs) | 106,866,667 lbs |
Baseline Emissions
Next, we calculate baseline emissions, or the emissions that would have occurred for the current Quarter 1 prior to enrolling in C3 (business-as-usual). To do this, we use the current quarter's cubic yards of concrete manufactured (converted to pounds) and the corresponding baseline cement to concrete ratio.
| Current Concrete Manufactured (lbs) | Baseline Cement to Concrete Ratio |
|---|---|
| Current Year, Q1 | |
| 112,525,000 | 0.1479 |
The baseline emissions for the current quarter are calculated by multiplying the Quarter 1 baseline cement to concrete ratio by the Program’s stated emissions factor of 0.81 mt of CO2, giving the effective baseline GHG emissions per cubic yard of concrete. This baseline is then multiplied by the current quarter’s amount of concrete manufactured, yielding the GHG emissions that would have been emitted were the participant operating under business-as-usual. This result is converted to metric tons (divided by 2,204.6), yielding the baseline emissions for the current Quarter 1.
| Baseline Emissions | = | 112,525,000 (0.1479×0.81) | = | 6,115 mt |
| 2,204.6 |
Actual Emissions
Actual emissions for the current Quarter 1 are calculated using the current quarter’s cement usage and concrete manufactured. The table below shows the cement used and the concrete manufactured (converted to pounds) as well as the cement to concrete ratio for the current Quarter 1.
| Current Cement Used (lbs) | Current Concrete Manufactured (lbs) | Current Cement to Concrete Ratio |
|---|---|---|
| Current Year, Q1 | ||
| 12,600,000 | 112,525,000 | 0.1120 |
The actual emissions for the current Quarter 1 are calculated similarly to the baseline emissions, but use the current quarter’s cement to concrete ratio.
| Actual Emissions | = | 112,525,000 (0.1120×0.81) | = | 4,630 mt |
| 2,204.6 |
Calculating Offsets Generated and Incentive Payments
Offsets are generated by a participant when the current quarter’s actual emissions are less than the baseline emissions for that quarter, that is, when emissions are avoided as a result of participating in the Program. Avoided emissions translate into offsets at a one-to-one rate (i.e. one offset is equal to one metric ton of avoided GHG emissions). These offsets are then purchased from the participant by The Climate Trust at $4 per offset.
| Avoided Emissions | = | 6,115 – 4,630 | = | 1,485 mt |
| Avoided Emissions (mt) or Offsets | 1,485 |
| Price per Offset | $4 |
| Participant's Incentive Payment | $5,940 |
Ground Granulated Blast Furnace Slag (GGBFS) Use
In order for the raw byproduct of blast furnace steel production, GGBFS (or slag), to be used as an SCM, it must be processed using several energy-intensive steps. This process results in emissions that otherwise would not occur under business-as-usual, emitting 0.021 mt of CO2 for every metric ton of slag used in concrete production. These emissions must be accounted for when calculating offsets generated by a participant.
To account for these emissions, both a baseline and a current slag to concrete ratio are calculated and multiplied by 0.021 mt of CO2 to determine GHG emissions due to slag used per cubic yard of concrete. These emissions are then added to the baseline and actual GHG emissions due to cement used per cubic yard of concrete before being multiplied by the current amount of concrete manufactured.
For example: Assuming that the above sample participant did not use slag during the last three years, then the baseline emissions calculated above would remain the same (6,115 mt). If we also assume that the participant used 3,208,333 lbs of slag as a portland cement substitute during the current Quarter 1, then the actual emissions for the current quarter would be 4,661 mt.
| Avoided Emissions | = | 6,115 – 4,661 | = | 1,454 mt |
| Avoided Emissions (mt) or Offsets | 1,454 |
| Price per Offset | $4 |
| Participant's Incentive Payment | $5,816 |
