# Green Energy Glossary

We are presenting you with the most important terms from the Green Energy, climate and sustainability world. Some words are confusing but they come across in conversations quite often - please check our glossary below.


# Air Quality Index (AQI)

An Air Quality Index (AQI) indicates how contaminated the air of a specific area or country is or how polluted it is expected to be. Countries have their own AQIs that match other air quality requirements.

# Air pollution

Air pollution is the contamination of the environment by physical, chemical, or biological mediums that change the characteristics of the atmosphere. For example, burning fossil fuels.

# Atmosphere / Air

The atmosphere is the layer of gases that envelopes a planet. The atmosphere of Earth consists of nitrogen, oxygen, argon, carbon dioxide, and trace gases.

# Biofuel

Biofuels are fuels derived from biological sources. These include new and used vegetable oils, animal fats, and other forms of waste. Biofuels can replace traditional fossil fuels.

# Biomass / Biogas

Biomass is the biodegradable part of waste, products, and residues from different industries such as agriculture, forestry and aquaculture. Biomass can be converted into electricity, burned to create heat, or processed into biofuels.

# Carbon Border Adjustment Mechanism (CBAM)

The Carbon Border Adjustment Mechanism (CBAM) is a system that places a carbon price on imports of products from countries with less ambitious national policies around climate change. It is currently being legislated as part of the European Green Deal and is expected to take effect in 2026.

# Carbon accounting

Carbon accounting refers to the systematic methodologies, measurement, and monitoring used to evaluate and quantify how much carbon dioxide equivalent (CO₂e) a company emits.

# Carbon dioxide (CO₂)

Carbon dioxide (or CO₂) is a colourless, odourless gas consisting of one part carbon and two parts oxygen. CO₂ is a natural component of our planet's atmosphere and is one of the most common greenhouse gases. Humanity releases more carbon dioxide –primarily through burning fossil fuels like coal and oil– into the atmosphere than current biological processes can remove, the amount and concentration of carbon dioxide in the atmosphere and ocean increases yearly.

# Carbon dioxide equivalent (CO₂e)

Carbon dioxide equivalent (CO₂e) is a single unit metric used to harmonise emissions from many different greenhouse gases based on their Global Warming Potential (GWP). In greenhouse gas accounting, CO₂e is more accurate than CO₂ alone because it covers the GWPs of all greenhouse gases that capture heat and warm our planet's atmosphere.

Carbon emissions Carbon emissions – or greenhouse gas emissions– release carbon into the atmosphere.

# Carbon footprint

A carbon footprint is the total amount of carbon dioxide released into the atmosphere due to the activities of an individual, project, organisation, or nation-state.

# Clean Development Mechanism (CDM)

The Clean Development Mechanism (CDM) is a UN initiative that allows emission reduction projects in developing countries to earn certified emission reduction (CER) credits.

# Climate change

Climate change refers to the shifts in temperature and weather patterns over an extended period. Some of these shifts may be natural, although, human activities have been the main driver of climate change – primarily through burning fossil fuels such as coal, oil, and gas, which adds greenhouse gases to the atmosphere and oceans above what a natural cycle can cope with. This, in turn, causes shifts and accelerated changes in the local and global climates. As emissions continue to rise, our planet is now 1.1°C warmer than it was in the late 1800s on average.

# Compensation

Compensation is a means to balance the greenhouse gases emitted by a country, an industrial sector, a company, or an individual by investing in projects that remove greenhouse gases from the atmosphere. Some greenhouse gas emissions are impossible to avoid, and compensation through carbon credits helps to achieve climate neutrality and net-zero objectives.

# Corporate Carbon Footprint

Corporate Carbon Footprint (CCF) represents a reporting company's direct and indirect carbon dioxide equivalent emissions within a defined time period (usually a single year).


# Direct emissions

Direct (greenhouse gas) emissions are produced from sources owned, produced, and controlled by a company. The difference between direct and indirect emissions is that indirect (greenhouse gas) emissions are a consequence of the activities of the reporting organisation but are controlled or produced by another company, for instance, a cloud storage provider or a taxi ride.

# EU Taxonomy

The EU Taxonomy Regulation establishes six environmental objectives, directly related to sustainability principles:

  1. Climate change mitigation
  2. Climate change adaptation
  3. The sustainable use and protection of water and marine resources
  4. The transition to a circular economy
  5. Pollution prevention and control
  6. The protection and restoration of biodiversity and ecosystems

# Emissions

Emissions are defined as all of the gases and substances released into the atmosphere. Since the industrialisation era, human activities have significantly altered the chemical composition of our atmosphere through the release of substances and greenhouse gases.

# Fossil fuels

Fossil fuels are materials formed naturally in the Earth's crust from the remains of dead plants and animals. They are extracted and used chiefly for fueling purposes. Over 80% of the CO₂ generated by humans comes from burning fossil fuels. Their extraction, combustion and consequent emissions-to-air negatively affect the carbon cycle, which in balanced states allows for climate stability and a functioning biosphere. Fossil fuels include but are not limited to petroleum, coal, and natural gas.


# Global Warming Potential (GWP)

All greenhouse gases have different chemical compositions and properties, leading to different strengths and timescales contributing to the greenhouse effect. The Global Warming Potential (GWP) index is used to measure the relative warming effects of these gases, using CO₂ as the baseline. To calculate the relative impact of these gases, the Global Warming Potential (GWP) index is used, using CO₂ as the baseline and harmonising all gases as carbon dioxide equivalents.

# Greenhouse gases (GHG)

Greenhouse gases (GHGs) are gases in the atmosphere that contribute to the greenhouse effect and warm the planet.

  • Carbon dioxide
  • Ozone
  • Methane
  • Nitrous oxide The above are the significant gases driving the atmospheric temperature increase. According to the IPCC report, an estimated 59 billion tonnes of GHG were emitted in 2019, with a large part being carbon dioxide.

# Greenhouse effect

The greenhouse effect occurs when greenhouse gases accumulate in the Earth's atmosphere. Greenhouse gases trap the sun's heat as it reflects from the Earth's surface. This process warms the planet and leads to rising global temperatures. Without the natural greenhouse effect, the global mean temperature would be -18°C and therefore uninhabitable for humans.

# Hydrogen

Hydrogen is the most plentiful element that exists in the universe. Both the sun and the stars are composed mainly of hydrogen. It can be used as a source of energy. Its quantities are - it is a very light gas that is colourless, odourless, and tasteless. In Europe, it makes up less than 2% of our current energy consumption and is mostly used for the development of complex chemical products.

# Methane

Methane is a primary constituent of natural gas, is a greenhouse gas, and its presence in the atmosphere affects our climate system and the Earth's temperature. Although CO₂ has a longer-lasting effect on our climate, methane has a much higher Global Warming Potential (GWP) than carbon dioxide.

# Nitrous oxide

Nitrous oxide, also known as laughing gas, contributes to the greenhouse effect. In addition to natural sources, agriculture and fertilisers produce nitrous oxide. Around 40% of the total N₂O emissions globally come from human activities. The IPCC has calculated that nitrous oxide comprises about 6% of all greenhouse gas emissions, and its emissions rose 30% in the past forty years.

# Ozone (O₃)

Ozone (O₃) is a pale blue gas composed of three oxygen atoms that is present in different layers of our atmosphere. Usually, O₃ is not emitted into the air directly but is developed at ground level through a chemical reaction. Ozone layer depletion does not cause global warming, but it can be damaging to human health. It is one of the planetary boundaries defined by the Stockholm Resilience Center.


# Paris Climate Agreement

The Paris Climate Agreement aims to limit global warming to "well below 2°C, and preferably below 1.5°C." It is an international treaty adopted by 196 nations at COP21 in Paris in 2015 and came into force a year later in 2016. The Paris Climate Agreement covers climate change mitigation, adaptation, and finance.

# Scope 1 emissions

Scope 1 emissions are direct emissions from company-owned and controlled resources. Examples can be on-site combustion, organisation-owned fossil-fuel power plants, etc.

# Scope 2 emissions

Scope 2 emissions are indirect emissions from the generation of purchased energy from a utility provider. They include emissions released into the atmosphere from the consumption of electricity, steam, heat, and cooling purchased from a third party.

# Scope 3 emissions

Scope 3 emissions, also known as value chain emissions, are all indirect emissions that occur in the reporting company's upstream and downstream supply chain. As defined by the GHG Protocol, Scope 3 emissions are separated into 15 different categories, including business travel, waste disposal, and purchased goods and services.

# Sustainable Finance Disclosure Regulation (SFDR)

The Sustainable Finance Disclosure Regulation (SFDR) is a European regulation that came into effect in March 2021. Its aim was to increase the transparency on sustainability among financial institutions and market participants. It applies to financial institutions such as banks, insurers, and asset managers operating in the European Union and has three main goals:

  1. To improve disclosures so asset owners and retail clients can understand and compare financial products' sustainability characteristics.
  2. To ensure a level playing field within the European Union
  3. To prevent greenwashing.


# Voluntary Emission Reductions (VER)

Voluntary Emission Reductions (VER) are emission reductions made voluntarily and not mandated by any regulation or legislation. They usually originate from the will of an organisation to take proactive climate action.


# Zero carbon

Zero carbon is when a product or service produces no carbon emissions. For example, renewables like wind and solar are referred to as zero carbon, as they do not emit carbon when producing electricity.