We are happy to announce that the SDA tool V8 was made publicly available starting on February 27th 2017. We strongly recommend companies use this new version (date of revision: 02/27/2017) instead of V7 because it uses the most up-to-date IEA ETP data (2016). Note that targets modeled using previous versions of the SDA tool can only be submitted to the SBTi for an official validation within six months of the revision date (see SBTi Criteria C9 on Method Validity).
The back-end data has been locked as it contains proprietary information from the International Energy Agency ETP 2016 2DS.
The user needs to enable Macros to use the tool.
If the Excel of the user is in a different language that is not English, the Excel might not recognize some parameters in the tool and it might not work. The recommendation is to use a version in English.
In addition, the sector pathway for Chemical and petrochemical companies in the SDA tool needs critical refinements. The Excel version of the SDA tool should not be used to estimate Scope 1 and 2 targets for companies in this sector.
We are in the process of developing a new science-based target setting tool
The new tool will be more comprehensive, and will incorporate a wider range of science-based target setting approaches, including the Sectoral Decarbonization Approach (SDA). Our intention is that the new science-based target setting tool will provide an improved user experience, and facilitate science-based target setting by a wider range of companies.
If you would like to participate in the beta-testing of the new tool, please let us know [email protected]and we will contact you with further details once the tool is available.
Download more information about the Sectoral Decarbonization Approach
How does the sectoral decarbonization approach work?
The Sectoral Decarbonization Approach (SDA) allocates the 2°C carbon budget to different sectors. This method takes into account inherent differences among sectors, such as mitigation potential and how fast each sector can grow relative to economic and population growth.
Using the detailed sector-scenarios from the International Energy Agency’s 2°C Scenario (IEA 2DS) model available in the Energy Technology Perspectives (ETP), it is possible to estimate the 2°C-compatible carbon intensity for any detailed-sector scenario by dividing the total direct emissions of the sector in any given year by the total activity of the sector in the same year. This yields a sector intensity pathway. Within each sector, companies can derive their science-based emission reduction targets based on their relative contribution to the total sector activity and their carbon intensity relative to the sector’s intensity in the base year.
Why do the decarbonisation pathways show an increase in early years (peak and decline)?
Less aggressive targets until around the year 2020 are due to the peak and decline emissions trajectory used in the IPCC’s 5th Assessment Report. This peak in emission reflects the projected timeline for when emissions reductions technologies will become widely available and cost-effective.
From the four different emission scenarios assessed by the IPCC 5th Assessment Report: Working Group III, the one that holds the best chances of limiting global warming to less than 2ºC is the “Representative Concentration Pathway (RCP 2.6)” (IPCC, 2014b). This concentration pathway represents a peak-and decline model that reaches a maximum level of radiative forcings of 3.1 watts per cubic meter (W/m2) by midcentury and then declines to about 2.6 W/m2 by the end of the century. This scenario would stabilize concentrations of GHG emissions in the atmosphere at about 450 parts per million (ppm) by 2100. The IEA’s 2DS scenario describes an energy and industrial system consistent with an emissions trajectory that, according to climate science, has a good chance of limiting global warming to 2ºC. The correspondence between the RCP 2.6 and 2DS scenarios has been assessed and validated (Schaeffer & Van Vuuren, 2012).
Therefore, although the SDA decarbonization pathways show a peak and decline figure as in the IEA´s 2DS, the model is based on the widely-accepted globally agreed upon target of limiting global warming to less than 2ºC. The latter shouldn’t be interpreted by companies as the allowance to start decarbonization strategies in late stages. On the contrary, investing in deep decarbonization in early stages can avoid paying extra costs and making the company more profitable earlier in time. It could also avoid lock-in for several technologies.
WHAT ARE THE ASSUMPTIONS IN THE SDA?
Please refer to section 2.4 ‘Assumptions in the method’ of the Sectoral Decarbonization Approach (p.34) for a detailed description of assumptions made in the SDA Approach.
What are the main assumptions of the energy technology perspectives from the IEA?
The IEA developed a two degree low-carbon scenario (2DS) in its 2014 Energy Technology Perspectives (ETP) report that is consistent with the representative concentration pathway (RCP 2.6) scenario of the IPCC AR5. The scenario was created using the ETP-TIMES model (IEA 2014). It was used to determine the least-cost technology mix needed to meet the final demand for the industry, transport, and buildings sectors. Please refer to Appendix V. ‘Energy Technology Perspectives (ETP) - 2 Degree Scenario (2DS) of the Sectoral Decarbonization Approach for a detailed description on the scenario’s assumptions.
What is the probability of staying below 2°C global warming when applying the SDA?
The SDA method uses the ETP 2DS scenario from the IEA which gives at least a 50% probability of keeping the average global temperature rise below 2°C in 2100.
However, the recommendation is that companies check on a regular basis the validity of their projections, and the assumptions made in the method. For more information on the revision of the method to section 2.3 ‘Periodic revision of method and target adjustment’ of the Sectoral Decarbonization Approach.
How does the methodology take into account structural changes such as mergers or acquisitions?
The SDA methodology takes into account structural changes such as mergers, acquisitions and divestments for homogeneous sectors by changing the carbon intensity in the base year used for the target. For example, Company A and Company B, decide to merge in 2014. Both companies pertain to the cement sector and have comparable production (ton cement) in the base year 2010. However, Company A had a more carbon efficient activity in 2010 compared to Company B. When merging, the new carbon intensity in 2010 will be somewhere between both intensities. This means that Company A by merging with Company B became less carbon efficient in 2010, while Company B became more carbon efficient. According to the SDA methodology all companies in the sector will converge with the sector´s carbon intensity in 2050. Consequently, when both companies decided to merge, their carbon intensity pathway changed as well as their annual percentage reduction (slope change in the decarbonization pathway).
Carbon intensity in 2010 (tCO2/t cement)
Carbon intensity in 2015 (tCO2/t cement)
Annual percentage reduction
Does the SDA take into account regional differences?
HOW DOES THE SDA RECOGNIsE ACTION TAKEN BY COMPANIES BEFORE THE BASE YEAR?
Please refer to the box ‘HOW DOES THE SDA METHOD RECOGNISE EARLY ACTIONS BEFORE THE BASE YEAR?’ within section 2.3 Periodic revision of method and target adjustment’ of the Sectoral Decarbonization Approach.
WHAT ROLE DOES CARBON CAPTURE AND STORAGE (CCS) PLAY IN THE SDA/IEA SCENARIOS?
IEA notes that “achieving the ETP 2014 2°C scenario (2DS) does not depend on the introduction of breakthrough technologies. All technology options introduced in ETP 2014 are already commercially available or at a stage of development that makes commercial-scale deployment possible within the scenario period. Costs for any of these technologies are expected to fall over time, making a low-carbon future economically feasible” (IEA 2014). CCS is considered in the IEA ETP 2014 for different sectors as possible ways to achieve additional emission reductions, for example: Cement, Iron and Steel, Chemicals and Petrochemicals. For more information, please refer to Appendix I ‘Insights into sectoral 2°C decarbonization pathways’ of the Sectoral Decarbonization Approach.
At this time there is not enough information to create robust targets for the following sectors: agriculture, forestry and other land use (AFOLU) and oil and gas production. The authors hope to include these in the future when enough information becomes available. Please see FAQ below for more information on the expansion and refinement of the SDA methodology.
WHAT ARE HOMOGENEOUS AND HETEROGENEOUS SECTORS? HOW ARE THE SECTORS IN THE SDA CLASSIFIED?
Homogeneous sectors are those that can be described using a single physical indicator (e.g. tons of cement produced for the cement sector, tons of aluminum produced for the aluminum sector). In the SDA they are: power generation, iron and steel, cement, aluminum, pulp and paper, aviation passenger transport, light-duty road passenger transport, heavy-duty road passenger transport, rail passenger transport, and service buildings. The SDA is most robust for these sectors.
Heterogeneous sectors are those that can’t be described using a single physical indicator. For example, the chemical sector is heterogeneous because it produces a diverse array of chemicals that each have unique characteristics and traits and are difficult to compare to one another. In the SDA they are: chemicals and petrochemicals, other industry, other transport.
I work for a company that operates in a sector not covered by the SDA. Are there plans to expand the SDA to cover additional sectors?
Yes, the Science Based Targets is working towards covering additional sectors in the SDA as well as to develop more nuanced trajectories for some of the sectors currently covered. The Science Based Targets Initiative invites interested stakeholders to contribute to the development of new sector 2-degree pathways. Please refer to the Sector Development Framework
for more information. It provides stakeholders with guidelines for contributing to the expansion and refinement of the Sectoral Decarbonization Approach.
In addition, please note that even if the SDA does not cover your sector, you may be able to use other methodologies to set science-based targets for your company. Please refer to our Science-based Target Setting Manual
I am interested in developing a new science-based target method for my sector. How can I engage with the SBT initiative?
We highly encourage stakeholders to engage with the initiative and collaborate with us to develop new science-based target setting methods and/or new pathways for the Sectoral Decarbonization Approach. If you are interested in contributing to the development of new/refined sector pathways for the SDA, please refer to the Sector Development Framework
for additional information. If you are interested in the development of other science-based target setting methods, please contact us at [email protected]
Scope 1, 2 and 3
How are Scope 1 targets for homogenous sectors estimated ?
Please refer to section 188.8.131.52. ‘Homogeneous sectors’ of the Sectoral Decarbonization Approach for information on how Scope 1 targets for homogeneous sectors are estimated.
How are Scope 1 targets for heterogeneous sectors estimated ?
Please refer to section 184.108.40.206. ‘Heterogeneous sectors’ of the Sectoral Decarbonization Approach for information on how Scope 1 targets for heterogenous sectors are estimated.