How SMEs Calculate Carbon Footprint | GHG Inventory Guide for Vietnam
How does an SME calculate its total greenhouse gas emissions (carbon footprint)?
To navigate emerging regulations like the EU's Carbon Border Adjustment Mechanism (CBAM) and participate effectively in the carbon market, the first essential step for any enterprise is to establish a comprehensive Greenhouse Gas (GHG) inventory. This process, often called calculating a corporate carbon footprint, provides the foundational data for all climate-related action.
In Vietnam, the calculation of facility-level GHG emissions is guided by Decree No. 06/2022/ND-CP26, as amended and supplemented by Decree No. 119/2025/ND-CP27, along with technical guidance in Circular No. 17/2022/TT-BTNMT28. These domestic regulations are complemented by international standards such as the GHG Protocol29 and TCVN ISO 14064-1:201830 to ensure consistency and global recognition.
The process typically includes four key steps:
Step 1: Define operational boundaries and classify emission sources
An enterprise must first define its operational boundaries to identify all activities that produce GHG emissions. These sources are then categorized into three internationally recognized "scopes" to prevent double counting and provide a clear picture of the company's climate impact:
Scope 1: Direct emissions
Direct emissions from activities owned or controlled by the enterprise, such as fuel combustion in trucks, machinery, boilers, or refrigerant leakage from air conditioners.
Scope 2: Indirect emissions
Indirect emissions from the use of purchased energy such as electricity, steam, or heat (e.g., electricity purchased from EVN).
Scope 3: Other indirect emissions
Other indirect emissions outside the direct control of the enterprise, such as emissions from suppliers, outsourced transportation, business travel, waste disposal, or the use of products after consumption.
| Criteria | Scope 1 - Direct emissions | Scope 2 - Indirect emissions from Purchased energy | Scope 3 - Other indirect emissions from Value chain |
|---|---|---|---|
| Definition | GHGs generated directly from company-controlled activities. | GHGs generated indirectly from the use of purchased energy (electricity, steam, heat, cooling). | All other indirect emissions arising throughout the value chain (upstream and downstream). |
| Location of Emissions | On-site (within company facilities). | Off-site, as a result of purchased energy. | Outside internal operations, across the entire value chain. |
| Level of Control | High - directly measurable and controllable. | Medium - depends on energy supplier choice. | Low to medium - requires cooperation and data from partners. |
| Main Emissions Sources | • On-site fuel combustion (coal, oil, natural gas) • Company-owned vehicles • Industrial processes (CO₂, N₂O, etc.) • Refrigerant leaks (HFCs) | • Purchased electricity from grid • Purchased steam, heat, or cooling | • Purchased goods and services • Upstream logistics • Business travel and commuting • Product use and disposal • Investments, franchises, leased assets |
| Measurement Method | Direct measurement or fuel-based calculation. | Two approaches: • Location-based: uses the average grid emission factor. • Market-based: uses supplier-specific factors. | Indirect estimation via: • Supply chain data • Industry emission factors • Life Cycle Assessment (LCA) |
| Transparency & Control | High – data readily available. | Medium – must disclose both calculation methods. | Low to medium – depends on supply chain transparency. |
| Typical Emission Share | ~10-15% of total company emissions. | ~10-20% depending on electricity source. | Up to 70-80% in sectors such as textiles, food, retail, electronics. |
Table 4: Comparison of Emission Scopes
Step 2: Select and collect activity data for the facility-level GHG inventory
Enterprises should compile quantitative data on emission-related activities within a reporting period (typically one year). Data sources may include fuel invoices and electricity bills, equipment operation logs and maintenance records, accounting and transportation documentations, or water and material consumption reports.
For the waste management sector, Circular 17/2022/TT-BTNMT31 specifically requires indicators such as volume of municipal solid waste, volume of wastewater, and applied treatment technologies.
Step 3: Select appropriate emission factors
Each emission source corresponds to a specific CO₂e emission factor. Companies can refer to: (1) The National Emission Factor Database, to be issued by the Ministry of Agriculture and Environment (as per the revised regulations in Decree 119/2025/ND-CP); (2) The IPCC 2006/2019 Guidelines; or (3) The GHG Protocol Emission Factor Database (if national factors are unavailable).
Step 4: Calculate facility-level greenhouse gas emissions
The standard formula applied is:
GHG Emissions (tonnes CO₂e) = Activity Data × Emission Factor
The emissions from all activities are then summed across all three scopes to determine the company's total annual carbon footprint. This final figure is essential for setting internal reduction targets, developing credible carbon credit projects, and complying with regulatory mechanisms like CBAM or Vietnam’s upcoming ETS.
To simplify the process, SMEs can use GHG calculation tools, such as GHG Protocol Calculation Tools32, or SIMAP (from the University of New Hampshire).33
References
- The Government of Vietnam. (2022). Decree No. 06/2022/NĐ-CP on mitigation of greenhouse gas emissions and protection of the ozone layer. Thư viện pháp luật. https://thuvienphapluat.vn/van-ban/EN/Tai-nguyen-Moi-truong/Decree-06-2022-ND-CP-mitigation-of-green-house-gas-emissions/503148/tieng-anh.aspx
- The Government of Vietnam. (2025).Decree on amendmdouble-countingents to certain Articles of Decree No. 06/2022/ND-CP dated January 07, 2022 of the Government on green house gas (GHG) emission mitigation and ozone layer protection. Thư viện pháp luật. https://thuvienphapluat.vn/van-ban/Tai-nguyen-Moi-truong/Decree-119-2025-ND-CP-amendments-to-certain-articles-of-Decree-06-2022-ND-CP-661711.aspx?tab=1
- Ministry of Agriculture and Environment. (2022). Circular No. 17/2022/TT‑BTNMT of the Ministry of Natural Resources and Environment, regulating technical measurement, reporting and appraisal of GHG emission mitigation and GHG inventory in the waste management sector. Thư viện pháp luật. https://thuvienphapluat.vn/van-ban/tai-nguyen-moi-truong/Thong-tu-17-2022-TT-BTNM-ky-thuat-do-dac-bao-cao-tham-dinh-giam-nhe-phat-thai-khi-nha-kinh-547764.aspx
- Greenhouse Gas Protocol. (2013). Corporate Accounting and Reporting Standard (Revised Edition). Greenhouse Gas Protocol. https://ghgprotocol.org/corporate-standard
- Vietnam Standards and Quality Institute. (2018). CVN ISO 14064-1:2018 - Greenhouse gases - Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals. Thư viện pháp luật. https://thuvienphapluat.vn/TCVN/Tai-nguyen-Moi-truong/TCVN-ISO-14064-1-2025-ISO-14064-1-2018-Khi-nha-kinh-Phan-1-loai-bo-khi-nha-kinh-921621.aspx
- Ministry of Agriculture and Environment. (2022). Circular No. 17/2022/TT‑BTNMT of the Ministry of Natural Resources and Environment, regulating technical measurement, reporting and appraisal of GHG emission mitigation and GHG inventory in the waste management sector. Thư viện pháp luật. https://thuvienphapluat.vn/van-ban/tai-nguyen-moi-truong/Thong-tu-17-2022-TT-BTNM-ky-thuat-do-dac-bao-cao-tham-dinh-giam-nhe-phat-thai-khi-nha-kinh-547764.aspx
- Greenhouse Gas Protocol. (n.d.). Calculation Tools and Guidance. Greenhouse Gas Protocol. https://ghgprotocol.org/calculation-tools-and-guidance
- SIMAP | The Sustainability Institute at the University of New Hampshire. (n.d.). Home | SIMAP. SIMAP. https://unhsimap.org/home
Exceeding ETS Emission Limits | Compliance and Penalty Handling
Learn how Vietnam handles enterprises that exceed their permitted emission levels in the ETS. Understand allowance surrender requirements and potential penalties.
Emission Factors for SMEs in Vietnam | MONRE Guidelines
Guide to selecting appropriate emission factors for SMEs in Vietnam. Learn about official Ministry of Natural Resources and Environment factors and when to use international standards.