Understanding Carbon Emission Calculations: Why Are Companies Using CO2e Instead of CO2?

Many people think that carbon emissions are just CO2, but that's not correct. When companies prepare ESG reports, they use CO2e. What’s the difference between the two?

In simple terms

CO2: Just carbon dioxide, with a global warming potential value of 1 (baseline value)

CO2e: Carbon dioxide equivalent, which converts all greenhouse gases into the effect of CO2, including:

• Methane (GWP≈25, 25 times more powerful than CO2)
• Nitrous oxide
• Hydrofluorocarbons
• Perfluorocarbons
• Sulfur hexafluoride

Why do companies use CO2e?

Because these gases have different warming capabilities. Methane has a warming effect 25 times greater than CO2 over a 100-year period, and nitrous oxide is even more exaggerated. If you only look at CO2, you cannot see the true climate impact.

Using CO2e as a unified metric allows companies to:

• Identify the largest sources of emissions
• Targeted emission reduction (such as optimizing cold chain or waste management)
• Benchmark against other companies
• Comply with international standards such as the GHG Protocol

Practical Examples

Assuming your factory emits 100 tons of methane = 2500 tons of CO2e (100×25) This explains more issues than directly reporting 100 tons of numbers – it indicates that you need to prioritize addressing the methane problem, not CO2.

Bottom Line

CO2e is not just a term; it transforms ESG reporting from “How much do I emit?” to “What is my real impact on the climate?” This is more useful for investors, regulators, and companies' own emission reduction plans.