What are spend-based emissions factors (EFs)?

Spend based methods are most often used for Scope 3 emissions, particularly purchased goods and services, business travel and professional services.

In simple terms:

You take a financial value such as dollars spent on flights, accommodation, legal services or IT
You multiply that spend by an emissions factor that represents average emissions per dollar spent in that sector
The result is an estimate of emissions associated with that purchase

For a comparison of spend- and activity based emissions factors, please read this article.

What is the EEIO methodology?

Most spend based emissions factors are calculated using an Environmentally Extended Input Output methodology, often shortened to EEIO.

EEIO is a well established economic modelling approach used by governments, academics and emissions factor providers.

At a high level, EEIO works as follows:

Input output tables show how money flows between sectors of the economy
Environmental data shows total emissions produced by each sector
The two datasets are combined to calculate emissions per unit of economic output
These emissions intensities are expressed as emissions per dollar spent

The model captures both:

Direct emissions from a sector itself
Indirect emissions from its supply chain

This makes EEIO particularly useful for Scope 3 estimation where supply chain data is hard to obtain.

What does EEIO capture in practice?

When you use a spend based emissions factor calculated using EEIO:

You are estimating average emissions across an entire economic sector
The factor includes upstream activities such as energy use, materials and transport
It does not represent the performance of a specific supplier
It reflects economy wide averages for a given year

EEIO is designed for completeness rather than precision at an individual supplier level.

Where do EEIO based spend factors come from?

EEIO models are built using data from:

National statistical agencies
Government input output tables
National greenhouse gas inventories
Energy and emissions accounts
Academic and policy modelling

Because these datasets are produced at a national level, they require extensive review and validation before release.

Why is there a lag in releasing EEIO spend based emissions factors?

The lag exists because of how EEIO data is created and published. Key reasons include:

Economic input output tables are released with a delay of one to two years
Emissions inventories are finalised after reporting years close
Financial and environmental datasets must be reconciled
Historical data is often revised for accuracy before final publication

As a result, EEIO based spend factors typically use data that is one to three years old. This timing is normal and consistent across all major EEIO models globally.

Do you adjust emissions factors for inflation?

To read about our approach to inflation, read this article.

Why do EEIO based spend factors change over time?

Spend based emissions factors can change between releases because:

National emissions totals are updated or revised
Economic structures change across sectors
Sector classifications are refined
Modelling assumptions improve
Errors or misstatements in earlier datasets are corrected

These changes reflect improvements in data quality rather than changes in your underlying activity. TO learn more about why emissions factors change, read this article.

Learn more about pricing approaches used in EEIO spend factors

EEIO spend based emissions factors can be calculated using different pricing conventions. These affect how emissions per dollar are expressed and compared.

For more detail, see our related article. Differences between basic price and purchaser price emissions factors

This explains how taxes, margins and transport costs are treated and why pricing choice matters.

Trace emissions factor sources

Read more about Trace's database here.