What is CO2e and how is it calculated?

Quick Answer: CO2e (carbon dioxide equivalent) is a standard unit used to measure and compare the climate impact of different greenhouse gases by converting them into the equivalent amount of carbon dioxide that would cause the same level of warming over a 100-year period. It allows all greenhouse gas emissions, from methane to nitrous oxide, to be expressed as a single, comparable figure. CO2e is the unit used in carbon footprints, emissions reports, and targets including those aligned with the GHG Protocol and Science Based Targets initiative (SBTi).

What does CO2e mean?

CO2e stands for carbon dioxide equivalent. It is the standard unit for measuring greenhouse gas emissions across carbon accounting, climate reporting, and net zero target-setting.

The reason a single unit is needed is that greenhouse gases vary significantly in how much warming they cause. Carbon dioxide (CO2) is the most common, but methane (CH4), nitrous oxide (N2O), and several industrial gases also contribute to climate change, each with a different warming effect. CO2e converts all of these into a single number, making it possible to add them together and compare them meaningfully.

When a company reports a carbon footprint of, say, 500 tonnes CO2e, that figure includes all the greenhouse gases the business emitted, each converted into its carbon dioxide equivalent.

How is CO2e calculated?

Each greenhouse gas has a Global Warming Potential (GWP) value. GWP measures how much heat a gas traps in the atmosphere relative to CO2 over a set time period, typically 100 years (referred to as GWP100).

CO2 has a GWP of 1 by definition. Methane has a GWP of approximately 28-30, meaning one tonne of methane causes roughly 28-30 times more warming than one tonne of CO2 over 100 years. Nitrous oxide has a GWP of around 265-273. Some industrial gases, such as sulphur hexafluoride (SF6), have GWPs in the thousands.

To convert any gas into CO2e, multiply the quantity of that gas by its GWP:

CO2e = quantity of gas (tonnes) x GWP

So 1 tonne of methane equals approximately 28-30 tonnes CO2e. GWP values are periodically updated by the Intergovernmental Panel on Climate Change (IPCC). The current standard reference is the IPCC Sixth Assessment Report (AR6), published in 2021, though many reporting frameworks still reference values from the Fifth Assessment Report (AR5).

Which greenhouse gases are included in CO2e?

The GHG Protocol, the most widely used international standard for carbon accounting, covers seven greenhouse gases under its reporting framework:

• Carbon dioxide (CO2): primarily from burning fossil fuels and land-use change
• Methane (CH4): from agriculture, waste, and natural gas leaks
• Nitrous oxide (N2O): from fertilisers, agriculture, and combustion
• Hydrofluorocarbons (HFCs): used in refrigeration and air conditioning
• Perfluorocarbons (PFCs): used in semiconductor manufacturing
• Sulphur hexafluoride (SF6): used in electrical equipment
• Nitrogen trifluoride (NF3): used in electronics manufacturing

For most businesses, CO2, CH4, and N2O account for the vast majority of their emissions. HFCs are relevant for companies with significant refrigeration or air conditioning equipment.

Why does CO2e matter for carbon reporting?

CO2e is not just a technical unit. It is the foundation of almost every carbon-related commitment, regulation, and disclosure framework a business is likely to encounter.

Net zero targets are expressed in CO2e. When a company commits to reaching net zero, it means reducing all greenhouse gas emissions, measured in CO2e, to as close to zero as possible, with any residual emissions balanced by verified removals.

SBTi-aligned targets require companies to set emissions reduction goals across Scope 1, 2, and 3, all measured in CO2e. Without understanding what CO2e means and how it is calculated, it is difficult to set or track a credible target.

Compliance frameworks including SECR (Streamlined Energy and Carbon Reporting), PPN 006, and B Corp all require emissions to be reported in CO2e. Procurement teams and supply chain partners increasingly request CO2e figures as part of supplier assessments and tender responses.

Investor and stakeholder disclosures use CO2e as the common language. Whether a business is responding to a customer questionnaire or publishing a sustainability report, CO2e is the unit those audiences expect.

Why does CO2e sometimes cause confusion?

The most common source of confusion is the difference between CO2 and CO2e. CO2 refers specifically to carbon dioxide. CO2e refers to all greenhouse gases expressed in carbon dioxide equivalent terms. A carbon footprint that only reports CO2 is incomplete; it excludes the warming impact of methane, nitrous oxide, and other gases.

A second source of confusion is the time horizon used for GWP values. The standard is 100 years (GWP100), but some reporting frameworks reference a 20-year time horizon (GWP20), which gives methane a much higher value (around 80-85 rather than 28-30). This distinction matters when comparing figures across different reports or datasets, because the same physical quantity of methane will produce a different CO2e number depending on which GWP value is applied.

Finally, the IPCC periodically revises GWP values as climate science improves. Businesses comparing footprints across multiple years should check whether the same GWP values were used in each period, otherwise year-on-year comparisons may not be like-for-like.

What does CO2e mean in practice for businesses measuring their footprint?

For a business going through carbon accounting for the first time, CO2e is the unit that ties everything together. Every emission source, from electricity consumption to business travel to supplier activity, gets converted into CO2e so it can be added to a single total.

That total is the company's carbon footprint, typically expressed in tonnes CO2e (tCO2e) or kilograms CO2e (kgCO2e) for smaller figures. It covers Scope 1 emissions (direct emissions from owned or controlled sources), Scope 2 emissions (indirect emissions from purchased energy), and Scope 3 emissions (all other indirect emissions across the value chain).

Seedling calculates footprints in CO2e across all three scopes, aligned with the GHG Protocol, so the output is directly usable for stakeholder reporting, compliance submissions, and target-setting without requiring additional conversion or interpretation.

Understanding CO2e also helps when interpreting emissions factors, the values used to convert activity data (such as kilometres driven or kilowatt-hours of electricity used) into emissions. Emissions factors are published in CO2e, and using the right factor for the right gas mix is what separates a credible footprint from a rough estimate.

As reporting expectations rise and more businesses set formal targets, CO2e will only become more central to how companies communicate their climate performance. Getting clear on what it means and how it is calculated is the starting point for doing that credibly.