Why CEA businesses should track carbon KPIs

Keeping tabs on metrics like cost per pound or area can help businesses gain valuable insight into operational efficiencies and allow them to easily compare their results against industry benchmarks and peers.

As legislators and utility providers make decarbonization a priority in both policy and energy production, CEA businesses should also turn to carbon KPI tracking as they aim to reduce their carbon footprint. For example, Maryland’s energy efficiency programs “are now going to be required to meet carbon (reduction) goals in addition to those for energy reduction,” says Frank Molander, C&I market development lead at ICF, an RII member organization.

This means utilities will be determining carbon-related target KPIs for utility-funded programs. So, how can indoor farms and greenhouses be a part of meeting these new carbon KPIs?

Beyond regulatory compliance, tracking carbon KPIs can help CEA operators reduce costs and increase environmental stewardship. Here, we explore some key carbon KPIs CEA operators can track, along with methods and resources. What are carbon KPIs, and why are they crucial for CEA?

Carbon KPIs are metrics that help businesses measure their greenhouse gas emissions. Scope 1 emissions are those that are a direct result of the operation’s activities, including any onsite fuel combustion (e.g. a natural gas boiler/combined heat and power (CHP) unit, CO₂ supplementation systems and fugitive emissions from leaked refrigerants).

Scope 2 emissions are indirect emissions from energy purchased, like electricity. Scope 3 emissions are indirect emissions derived by the supply chain, including the transportation of goods, packaging, retail and consumer waste and more. They are generally harder to track and measure, but they’re important for local food production, where transportation distances can impact carbon savings.

There are several other carbon-related KPIs growers can leverage to understand their operation’s footprint. Vegetable growers can track energy consumption per kilogram of produce to link efficiency directly to production. Lower energy use per kilogram of produce means reduced carbon emissions per unit produced.

Tracking CO₂ emissions from on-site fuel combustion (e.g. from boilers or generators) captures direct emissions under Scope 1 and provides insight into how operational choices like heating methods impact carbon output. Knowing this metric can help operations justify upgrading to efficient and less carbon-intensive heat pumps rather than natural gas heaters (depending on the cleanliness of the grid).

Growers can also measure CO₂ emissions avoided by using on-site renewable energy instead of grid electricity. CEA businesses that adopt renewable energy can significantly reduce their carbon footprint, particularly in regions where grid power is generated from fossil fuels.

Key tools and methodologies for tracking carbon in CEA

There are many guides to help CEA businesses measure their carbon footprint and identify ways to reduce it. In addition to contacting utility companies to understand their operation’s carbon footprint, CEA growers also can turn to the U.S. EPA’s Emissions & Generation Resource Integrated Database and GHG Emission Factors Hub to get an understanding of the environmental characteristics of different electricity production methods.

Understanding how a particular grid creates its energy is crucial to determining a CEA facility’s carbon footprint. With some research, growers can take into account when those carbon savings would actually be coming into effect based on when the utility is switching to those more carbon-intensive energy sources (e.g. gas-fired or coal-fired plants).

Renewable energy sources like solar photovoltaics and wind turbines may not be constantly operating at full efficiency, and there are several regional differences that can impact their efficacy. These factors further complicate carbon offset estimates, making collaborating with utility and carbon experts key to getting an accurate understanding of a project’s value.

Beyond the carbon intensity of utility-generated electricity, Andre Trudell, an engineering manager at CLEAResult, an RII member organization, also turns to guidance from the Intergovernmental Panel on Climate Change. In its 2019 refinement of its 2006 guidelines, the organization provides information on how to quantify emissions relating to energy, industrial processes, agriculture and waste.

Submetering for deeper understanding

For a more granular view of their operation’s energy usage and carbon intensity, indoor farmers and greenhouse producers can turn to submetering to determine what energy is being used where. Energy meters can also be attached to individual pieces of equipment to understand how specific systems draw energy.

Submetering costs can range from a few hundred to several thousand dollars, depending on the complexity of the system and the size of the operation. When retrofitting submeters into an existing facility, install meters in alignment with the facility’s growing cycle to avoid disruptions. Vertical farms can be more adaptable to submetering, as they typically are newer builds that can incorporate more advanced technology early in the design phase.

Proper metering can unlock energy and carbon savings, and certain utilities may offer incentives for projects that aim to reduce energy use or convert to less carbon-intensive systems. These programs may help offset system upgrade costs. Additionally, that production data can pay for itself by helping CEA operators identify potential system efficiencies.

“We never leave it as you’re saving X therms or X kilowatt hours or CO₂ equivalents. We always do a detailed review of billing information, understand exactly how [customers are] being billed for that specific energy and then as a result how many dollars they would save,” Trudell says.

For effective submetering, an advanced controls system — which can collect the data needed to create detailed energy reports as well as enable growers to stage equipment usage based on grid data, such as pricing and carbon intensity — is needed. These can be particularly effective when participating in demand response (DR) programs, Molander notes.

The future of carbon KPIs in CEA

As more utilities and policymakers turn to CEA to hit decarbonization goals, carbon tracking will become more integrated into CEA business models. Already, 27 countries and the European Union have implemented carbon taxes to incentivize decarbonization and make carbon-intensive processes less affordable.

Carbon reporting is the critical first step that CEA businesses should take, with a focus on Scope 1 and 2 emissions. Eventually, as indoor farmers and greenhouse operators get a better handle on their supply chains, this reporting should expand to include Scope 3 emissions, focusing on the benefits of localized food production and transportation efficiencies.

“It’s probably a blend of regulations and economics that will drive the future of carbon KPIs,” Molander predicts.

To download the Resource Innovation Institute's Guide to Environmental Accounting & Reporting for Controlled Environment Agriculture (CEA) Operations, visit bit.ly/cea-footprint. 

This article appeared in the January/February 2025 issue of Produce Grower magazine under the headline "Carbon reporting."

Carmen Azzaretti is the engineering & operations manager for the Resource Innovation Institute.