Saudi Electricity Company — the largest owner of gas-fired capacity in the world — did not disclose over 7 million tonnes of CO2 in 2022 through its chosen carbon reporting method, finds a new report from Global Energy Monitor about the failure of the world’s largest oil and gas companies to properly account for their emissions.
For just five of the top companies owning oil- and gas-fired power plants, GEM found 10.7 million tonnes of hidden CO2 emissions for 2022. The social cost of this much carbon is $2 billion in climate costs per year, or $43 billion of the remaining lifetime climate cost of all hidden gas plants.
In the case of Saudi Electricity Company, these hidden carbon emissions amount to US$1.3 billion in climate costs per year and nearly $33 billion over the lifetime of these fossil fuel power plants.
This lifetime climate cost is comparable to a third of the social cost of Hurricane Katrina, half the cost of Australian wildfires from 2019, or a third of the cost of India’s deadly heat waves in 2021. GEM’s ownership tracker, in tandem with Climate TRACE’s emissions data, provides insights into the “hidden”1 emissions from gas plant assets that companies fail to include in their annual sustainability reports.
Most of the companies’ “hidden” emissions are due to certain plants falling outside a company’s selected reporting boundaries. Three of the five companies disclosed emissions only for plants they operate, despite the fact that they are beneficial owners2 of several other active power plants.
Analysis through GEM's Global Energy Ownership Tracker enables a deeper look to find “hidden” emissions on a company level. The following section describes different ways companies can hide emissions, and the final section details exactly what the “hidden” emissions are of the five companies investigated.
For an in-depth look at how companies hide emissions, see the following background on the Greenhouse Gas Protocol.
How companies hide emissions
The Greenhouse Gas Protocol (GHG Protocol) is the most common carbon emissions accounting method used by corporations. It defines which types of emissions to include in a company’s greenhouse gas (GHG) accounting and how to calculate them. While thoughtfully developed, the protocol has accounting loopholes that companies use to avoid disclosing emissions from assets that they are beneficial owners of.
The GHG accounting protocol is undergoing a revision process for a new release in 2025. The protocol staff noted that multiple carbon accountants have provided feedback that the voluntary choice of accounting approach is too ambiguous and needs to be rectified.
Categorizing emissions: The three Scopes
The GHG Protocol sets forward three classifications, called Scopes, for how to categorize a company's greenhouse gas emissions based on where emissions originate.
Scope 1: Direct emissions from sources a company owns or controls, like fuel burned in company vehicles or on-site emissions from industrial processes.
Scope 2: Indirect emissions from purchased energy, such as electricity, steam, or heating, used in a company's facilities.
Scope 3: All other indirect emissions across a company's value chain, including raw material production, transportation, waste disposal, employee commuting, and product usage by customers.
Scopes 1 and 2 are typically seen as emissions within a company's control. They are “deemed to be material to investors” under an SEC ruling in March 2024 on climate-related disclosures. Scope 3 emissions are more challenging for a company to influence and change, since they originate across a company's value chain.
Boundaries are unclear for which emissions should fall into Scope 3 versus Scopes 1 or 2. The following section describes how companies decide what falls under their controlled (Scope 1 and 2) emissions.
Defining which emissions fall under a company’s control
For calculating which emissions should be included in annual climate reports, the GHG Protocol provides companies a choice of three different approaches: the operational control approach, financial control approach, and equity share approach.
Operational control approach: Companies account for emissions from assets for which they have operational control. This includes joint ventures where the company makes management and board-level decisions.
Hidden emissions under this approach: Company A owns all or part of a power plant, but Company B operates the plant. In this case, Company A enjoys the benefits of ownership (such as profits), but does not need to include emissions released from the plant in its annual disclosure.
Financial control approach: The company accounts for emissions from operations under its financial control (as defined consistent with international financial accounting standards).
Hidden emission under this approach: Company C owns 40% of Power Plant 1 and does not have financial control over Plant 1. Company C is not required to include Plant 1 in its carbon emissions despite the fact that it receives a profit split from Plant 1’s business operations.
Equity share approach: The company accounts for all emissions from assets the company owns. The emissions attributed to the company are the total emissions of the asset multiplied by the company’s percent equity share. (e.g. A company that owns 40% of a gas plant would include 40% of the plant’s total emissions in its emissions report.)
Hidden emissions under this approach: It is hard to hide emissions under this accounting approach.
In addition to hiding emissions by selecting advantageous accounting approaches, some companies also set extra boundaries in their emissions reporting. The selection of additional boundaries is a reflection of the company's decisions and doesn’t relate to recommendations from the GHG Protocol. For example, a company may only disclose emissions from select subsidiaries or from entities that exist in certain jurisdictions.
Why do companies hide emissions?
As investors move to adopting climate risk assessments as part of their due diligence, companies are being pushed to properly disclose their risks and opportunities in the context of climate change. This can be seen in both the SEC’s March 2024 ruling on climate-related disclosure and the European Union's Corporate Sustainability Due Diligence Directive (CSDDD). A lower emissions footprint may make the company look more financially desirable.
In addition, certain jurisdictions, such as California, have begun implementing laws requiring corporations to disclose their Scope 1 and 2 emissions. Non-compliance with reporting mandates leads to financial penalties. Some jurisdictions set carbon limits and fine companies in excess of the limit.
At the same time, companies want to look ethical to their consumers. As consumers express concerns about corporate impacts on worsening climate change, it is in corporate interest to look as “green” as possible to consumer bases.
Below is an in-depth look at each company’s portfolio and a description of its incomplete emissions accounting.
World's largest owners of oil and gas power plans and the costs of their hidden emissions
Saudi Electricity Company
Saudi Electricity Company set its reporting boundary as “all its entities within the Kingdom of Saudi Arabia, where Saudi Electricity has ‘operational control’ in accordance with the Greenhouse Gas (GHG) Protocol.” Its boundaries also include the following subsidiaries: The Saudi Energy Production Company, National Grid SA, Dawiyat Telecom Company, Saudi Electricity Company for Projects Development, Dawiyat Integrated Company for Telecommunications and Information Technology, and Solutions Valley Company.
Saudi Electricity Company owns three plants — Shuqaiq 2 Independent Water and Power Project, Qurayyah CC power plant, and Rabigh 2 IPP power station — through companies excluded from Saudi Electricity’s chosen reporting boundary of the six subsidiaries specified above.
Egyptian Electricity Holding Company
Egyptian Electricity Holding does not explicitly state which emissions accounting method it uses in its annual report, but it does disclose a list of all power plants included in its emissions estimates. Of the 37 power plants owned by the company according to GEM’s Global Energy Ownership Tracker, 31 were disclosed by the company.
The six undisclosed gas plants4 are 100% owned by Egyptian Electricity Holding, and it is unclear why they were omitted from the report.
Calpine Corporation
Calpine’s Sustainability Data report suggests that they take an operational control accounting method approach.
Two5 of the twelve plants found in the Climate TRACE dataset are not under the company’s operational control and would therefore have been excluded from emissions reporting.
Chubu Electric Power Co. Inc.
Chubu Electric Power uses the equity method of emissions accounting for its consolidated subsidiaries and affiliates in the integrated annual report. The company does disclose Scope 1, 2, and certain categories of Scope 3 emissions. However, the company does not include its investments in the emissions calculations. The boundaries used for the company’s calculations include “Chubu Electric Power, Chubu Electric Power Grid, and Chubu Electric Power Miraiz; the three businesses of nuclear power generation, renewable energy and power transmission and transformation.”
JERA Co Inc, a joint venture owned 50% by Chubu Electric Power Co. Inc., is also included in Chubu’s emissions calculations, although Chubu does not clarify which scope is used to account for JERA’s emissions.
Of the 32 gas plants that are jointly or partially owned by Chubu Electric Power according to GEM’s data, 27 are included in the company’s disclosed emissions. Chubu discloses emissions for 26 of these gas plants through its 50% ownership in JERA Co Inc. Chubu does not disclose emissions for the remaining five gas plants,6 in which Chubu has 20% or less ownership. These plants are not disclosed, because they fall within subsidiaries outside the company’s chosen boundary and Chubu has less than 20% ownership in each.
Current accounting does not require reporting entities with less than 20% ownership. The assumption here is that 20% or less values are small amounts of carbon, and that excluding them reduces the time and resources companies need to put into carbon accounting. However, GEM’s Ownership Tracker solves this problem for energy and heavy industry companies.
Entergy Corporation
Entergy published both a full climate report and a separate in-depth GHG inventory. The inventory discloses the list of 29 combustion plants included in its reported emissions. GEM identified one additional combustion plant owned by Entergy, the Louisiana 1 Power Station, that is excluded from Entergy’s calculated emissions, because it exists “for the sole use of Exxon under a long-term lease agreement.” Even though Entergy’s GHG inventory claims the company does not have operational control, it has a 100% ownership stake in four of the five units of this plant and would account for these emissions if it chose a financial control accounting approach.
However, U.S. Energy Information Administration (EIA) data show that unit 5 of the Louisiana 1 Power station is owned by ExxonMobil, and that Entergy is the operator of all units in the Louisiana 1 Power Station. The EIA data are in conflict with the footnote in the Entergy GHG inventory, so GEM chose to rely on EIA data. If Entergy does operate the Louisiana 1 Power station, then the plant emissions should be attributed to itself under the accounting standards it chose. Therefore, GEM has attributed the emissions to Entergy in this article until proven otherwise.
1 Hidden emissions are not comprehensive; they only represent the emissions sources that Climate TRACE tracked in 2022. It is technically possible that each company has other “hidden” emissions not uncovered in this report.
2 A beneficial owner is an entity or person who benefits from the ability to significantly influence a company's decisions, receive profits and dividends from the business even if not the legal owner, and potentially exercise control over the direction of the company's operations. Companies should disclose assets they benefit from in their emissions disclosures.
3 These emissions were calculated using the EIA’s 2022 Carbon Dioxide Emissions at Electric Power Plants dataset.
4 Assiut Mobile power plant, Mallawi Mobile power plant, West Assiut Mobile power plant, Gerga Mobile power plant, Bani Ghalib Mobile power plant, and Samalut Mobile power plant
5 Whitby cogeneration station and Greenfield Energy Centre
6 Enecogen power station, Ras Laffan B power plant, Ras Laffan C power plant, Merwedekanaal power station, and Lage Weide 6 power station
What is the Global Energy Ownership Tracker?
The Global Energy Ownership Tracker (GEOT) provides information on the chain of ownership for various energy projects. The dataset maps each level of the chain from the direct owner up to their highest-level parent, such as corporations, investment firms, and governments.
Ownership links are reported with the percentage of ownership, including owners that have controlling interest as well as those with minority, non-controlling interests.
This asset ownership data set covers five of GEM’s trackers: coal-fired power plants, oil- and gas-fired plants, coal mines, steel plants and bioenergy, and will soon include data on oil and gas pipelines and heavy industry sectors like cement and iron ore mining.
What is Global Energy Monitor?
Global Energy Monitor (GEM) develops and shares information in support of the worldwide movement for clean energy. By studying the evolving international energy landscape and creating databases, reports, and interactive tools that enhance understanding, GEM seeks to build an open guide to the world’s energy system. Follow us at www.globalenergymonitor.org and on Twitter/X @GlobalEnergyMon.
Media Contact
Anna Mowat
Project Manager, Global Energy Ownership Tracker