Guide: How to calculate emissions using spend-based emission factors from EXIOBASE

The spend-based method calculates emissions by multiplying the amount spent on a product or service by an appropriate emission factor for that product category. Emission factors for this process are derived from large-scale economic models called environmentally-extended input-output (EEIO) tables. These link economic activity across industries and regions to environmental impacts, including greenhouse gas emissions.

Major carbon accounting frameworks such as the Greenhouse Gas (GHG) Protocol and the Partnership for Carbon Accounting Financials (PCAF) permit the use of the spend-based method for a first high-level “screening” estimate of a company’s scope 3 (procurement) emissions or from investments in companies. However, it is not suitable for scope 1 or scope 2 estimates and should also be avoided for scope 3 high-impact categories e.g. business travel or freight.

Below we will walk you through how to make calculations using emission factors from one of the most well-known and widely used EEIOs, EXIOBASE. To learn more about the spend-based method in general, check out our introductory blog article. 

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Step 1: Collect spend data

The first step is gathering relevant and reliable spend data.

Identify relevant spend categories

• Focus on purchased goods and services (scope 3.1) and capital goods (scope 3.2).
• Be aware of double-counting risks. Common pitfalls include:
  
  • Fuel and electricity: These belong in scopes 1 and 2 — you should exclude them from spend-based calculations.
  • Transport / Travel: These are best calculated using activity data (e.g. distance traveled) and belong in other scope 3 categories.
  • Salaries, wages, and payroll taxes: These are transfer payments that do not themselves result in emissions — they should be excluded.

Recommended data sources

• Accounting systems (e.g. SAP, Oracle, Xero)
• Invoices and receipts
• Financial reports or ERP exports
• Procurement or purchase order records

Choose a data structuring method

There are two high-level approaches to organizing your spend data for mapping to EXIOBASE sectors:

Option 1: Nominal/general ledger approach

• Spend is categorized under ledger codes.
• Each code is mapped to an industry sector in EXIOBASE (e.g. "Office supplies" → "Paper manufacturing").

Option 2: Purchase ledger (supplier) approach

• Spend is analyzed by supplier.
• Each supplier is mapped to a corresponding industry sector (e.g. "Office Supplies R Us" → “Wholesale of office supplies”).

You may find that one ledger code or supplier relates to more than one industry sector. In this case you could:

1. choose the industry that best represents the majority of spend
2. split the expenditure up and map it to more than one industry

You may wish to try the first option and see if one industry dominates (e.g. is > 80% of spend) and if not then split the expenditure up.‍

Tip: The approaches can be combined, using ledger codes for indirect purchases (e.g. via wholesalers / retailers) and supplier mapping for direct procurement (direct from the manufacturer).

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Step 2: Convert purchaser price to basic price

If you buy directly from the manufacturer, the basic price might be usable provided that 1) there are no particular commodity taxes or subsidies on production and 2) any charges for transport from the manufacturer are excluded.  

In all other cases you will need to use purchaser prices, which are basic prices adjusted for trade, transport, and tax margins. As these adjustments vary by region and industry, it’s easiest to use the ones built into the Climatiq Procurement endpoint that are based on the EXIOBASE tables. Technical users and subject experts might estimate these themselves using the underlying EXIOBASE tables.

Note that spend-based emission factors are always exclusive of (deductible) VAT unless they are specifically designed for households e.g. New Zealand’s NZHES consumption-based factors.

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Step 3: Adjust for inflation

Spend-based emission factors are based on prices from a specific year. If your expenditure is in current prices (e.g. 2025), but your emission factor dataset is from 2022, there's a mismatch. If prices have increased in that timeframe, then emissions are likely to be overstated if no inflation adjustment is made. Inflation also varies significantly by sector, so using sector-specific inflation rates is preferable.

How:

• Use Consumer Price Index (CPI) or Producer Price Index (PPI) or other measures of inflation to deflate expenditure: 

Real Expenditure = Nominal Expenditure × (Price Index_base year / Price Index_current year)

• Use region and industry / sector-specific price indices where available.

Tools:

• World bank (HCPI) (global)
• Eurostat (HICP) (EU)
• Industry specific Producer Price Index
  
  • UK: Producer Price Inflation (PPI) ‍

‍Tips:

The greater the time gap, the greater the need to adjust for inflation. If the difference is only a year then usually no adjustment is made, especially as inflation data for the most recent year may not be available.

Climatiq’s Procurement endpoint adjusts for inflation for you using industry-specific data where available.

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Step 4: Convert currencies 

EXIOBASE emission factors are in euros, so if your spend is in another currency, you will need to convert to euros. 

How:

• Multiply the spend by the exchange rate of the base currency you're converting to: 

Spend (base) * exchange rate (euros per base unit) = spend (euro) 

Tools:

• Refer to Eurostat for exchange rates to euros.

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Step 5: Map spend to EXIOBASE 

EXIOBASE divides the economy into 163 product groups and 200 industry sectors. To apply the correct emission factors, your expenses must be matched to EXIOBASE sectors.

How:

1. Start with your spend category or ledger code

Example: "Office supplies" or ledger code "6020: IT Equipment"

2. Map the spend category or NACE description to an EXIOBASE code

You can use keyword searches or lookup tables

Example: "IT Equipment" → EXIOBASE

• “Electrical machinery and apparatus n.e.c.”
• “Office machinery and computers”

3. Choose the closest matching EXIOBASE category or divide spend between them

If you already have NACE codes (Statistical Classification of Economic Activities in the European Community) then you can use these and use a lookup table to match these to the relevant EXIOBASE products.

Tools:

• Climatiq’s NACE → EXIOBASE table
• Eurostat NACE search tool
• National statistical offices
• Concordance tables (e.g. COICOP to NACE)
• Pre-mapped lists: EXIOBASE and third-party tools sometimes offer pre-made mappings between NACE codes and EXIOBASE sectors
• Autopilot: Climatiq Autopilot matches text input (for example from invoices) to fitting emission factors, including those from EXIOBASE

Fallback strategy: If no direct match exists, assign the nearest parent NACE category and apply the average emission factor for that sector.

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Step 6: Apply regional factors

To get accurate emissions estimates, you should ideally use an emission factor for the region your product came from. To decide which region is most fitting, apply a “region of last value added” logic, meaning you use an emission factor for the region where the final stage of manufacturing took place.

a) Known supplier region

Use case:

If you know the supplier is from a specific country/region (e.g. Germany). 

Action:

• Use that region’s emission factor from EXIOBASE for the matched product category.

b) Unknown supplier region

Use case:

If you don’t know where a product was made or service was provided.

Action:

• Use market-average emission factors for the region in which you bought it (e.g. EU average or national average). Bear in mind that this will result in inaccuracy; use method A wherever possible.

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Step 7: Perform calculations

To calculate emissions from spend, you must multiply the spend amount by the identified emission factor for that product. The formula follows the same format as all emissions calculations.

How: 

Emissions = Spend Amount * Emission Factor

Where the spend amount is adjusted for inflation and converted to euros where applicable.

Step 8: Reassign Trade and Transport Margins (TTM)

When to do this: If you followed step 2b and separated the trade and transport margins.

What to do:

• Multiply the extracted TTM values (e.g. € spent on transport) by the corresponding sectoral emission factor from EXIOBASE.

Example: €100 margin for distribution by truck in France → multiply by French "Road transport" emission factor.

Example: €100 margin for wholesale purchase → multiply by the relevant "Wholesale"  emission factor.

Why:

• This approach ensures the emissions from trade and logistics are allocated separately, rather than being buried in product-level factors.

Example sectors:

• Wholesale and retail trade
• Road, sea, air, and rail transport

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Note: EXIOBASE plans to provide emission factors already adjusted for inflation (step 3) and in purchaser prices (step 2). For more information on what is to come in future versions of EXIOBASE, read our interview with one of its lead developers, Richard Wood. 

You can get access to the most recent EXIOBASE data (both versions 3.8 and 3.10, plus older versions) through Climatiq in multiple ways. To search for EXIOBASE emission factors, you can use the Data Explorer, Autopilot, and the Excel add-in. Both the Excel add-in and our Procurement API allow for automated EXIOBASE calculations, meaning all inflation correction, currency conversions, and TTM adjustments will be handled for you automatically. Note that EXIOBASE 3.10 requires an additional license to access the emission factors—get in touch with our sales team for access.