Understanding what carbon intensity is and why it matters is critical for companies navigating emissions regulations, energy strategy, and sustainability commitments.
Carbon intensity refers to the amount of greenhouse gas emissions generated per unit of activity or output—whether producing a kilowatt-hour of electricity, manufacturing a metric ton of steel, or heating a square foot of building space.
Companies operating in compliance carbon markets, where they’re bound by regulations to either reduce greenhouse gas emissions or buy allowances for them from others, need to know their overall carbon intensity so they can calculate how best to meet targets for reducing it.
Companies operating in voluntary carbon markets aren’t under the same obligation. Still, they need to know their carbon intensity to gauge the effectiveness of any elective actions they take to meet self-imposed sustainability goals for competitive or other reasons.
In both cases, companies can address their carbon footprint in two complementary ways: (1) directly reducing carbon intensity by switching to lower-carbon intensity fuels or improving operational efficiency, and (2) offsetting residual emissions through market mechanisms such as carbon credits.
This distinction is important: while fuel switching and efficiency improvements reduce emissions at the source, carbon credits compensate for emissions by supporting reductions or removals outside a company’s operations, helping organizations address emissions that cannot yet be eliminated.
Here’s a rundown of what carbon intensity is, how it’s measured, and the steps companies can take within a broader decarbonization strategy to reduce it.
What is Carbon Intensity?
Carbon intensity is typically expressed as tons of carbon dioxide equivalent (CO₂e) per unit of energy, output, or activity, depending on the sector. It is described differently across industries:
- For fuels, carbon intensity is expressed as grams of CO2e per megajoule (gCO₂e/MJ).
- For electricity or power generation, it is expressed as grams of carbon dioxide equivalent per kilowatt hour (gCO2e/kWh).
- In transportation, it is measured in emissions per unit of travel.
- For manufactured goods, it is measured in emissions per metric ton of product.
- In building and property management, carbon intensity is measured in emissions per square foot, for energy efficiency and sustainability.
How Carbon Intensity is Measured
Several models exist for estimating carbon intensity. One of the most widely used is the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, developed by Argonne National Laboratory.
The GREET model is used to estimate lifecycle carbon intensity for specific energy and fuel pathways, accounting for emissions from production, processing, transport, and use.
Similarly, to calculate the carbon intensity of an agricultural activity such as farming, a lifecycle analysis would take into account such factors as fertilizer rates, fuel use, tillage practices, regional energy mix, land-use impact, and co-product treatment. The resulting carbon intensity score would show a farm’s total emissions per bushel or megajoule.
Companies that make steel, cement, or chemicals calculate carbon intensity by measuring the emissions from the processes they use to manufacture those products as well as the emissions of the fuel source for the heat and power that drive those processes.
Low Carbon-Intensity Fuels That Reduce Carbon Intensity
Companies that use fuel in their production processes can switch to lower carbon intensity fuels to reduce their product’s carbon intensity. The carbon intensity of some fuels can be significantly lower than others, so it’s important to know the differences:
- Renewable natural gas. Renewable natural gas (RNG) is a lower-carbon alternative to fossil-based natural gas. RNG has a significantly lower carbon intensity than traditional natural gas because it’s produced by capturing and purifying methane emitted by decomposing organic waste from landfills, wastewater treatment plants, or livestock farms.
RNG is also attractive because it can be dropped into the existing natural gas infrastructure that plays a significant role in U.S. power generation. As RNG integrates into existing infrastructure, it can be an effective emissions-reducing tool for hard-to-abate thermal applications.
- Remediated mine gas. Remediated mine gas (RMG) is gas captured from active or abandoned mines and upgraded into a pipeline-injected, ultra-low-carbon fuel. RMG is mainly comprised of methane that would otherwise be released into the atmosphere, which mines in countries like the U.S. are required to vent for safety reasons. Capturing vented methane mitigates its high global warming potential and produces a fuel that can achieve very low—and in some cases net-negative—lifecycle carbon intensity under certain modeling assumptions such as the R&D GREET Model.
Like RNG, RMG is a drop-in fuel that can be injected into common carrier pipelines, making it a good option for companies seeking low-carbon fuels that don’t require equipment replacement or retrofits.
- Carbon capture and sequestration-enabled natural gas. CCS-enabled natural gas is a fossil-based fuel that during production and processing, captures CO₂ at the gas processing facilities and permanently stores it underground. CCS-enabled natural gas has the same energy content and delivery pathways as conventional natural gas, but delivers measurable reductions in lifecycle greenhouse gas emissions depending on capture rates and system design.
It is also a drop-in fuel for existing infrastructure, with growing availability as projects scale.
Using Market Mechanisms to Address Emissions
In addition to reducing carbon intensity at the source, companies can use market mechanisms to address emissions that cannot otherwise be eliminated.
Market mechanisms are certified, tradeable instruments that represent specific environmental attributes tied to energy use or emissions. Common examples include renewable energy certificates (RECs), renewable thermal certificates (RTCs), and carbon credits, each serving a distinct purpose.
RECs and RTCs are used to track and substantiate renewable energy use. RECs represent the environmental attributes of renewable electricity generation, while RTCs do the same for renewable thermal energy (e.g., renewable natural gas or biogenic heat). By purchasing and retiring these certificates, companies can demonstrate that a portion of their energy consumption is sourced from renewable energy, thereby lowering the reported emissions associated with that energy use.
In contrast, carbon credits represent verified reductions or removals of greenhouse gas emissions that occur outside of a company’s direct operations. Purchasing carbon credits allows companies to offset their own emissions by supporting projects that reduce or remove emissions elsewhere, such as reforestation or methane capture.
In summary, RECs and RTCs are used to track and claim renewable energy consumption, while carbon credits are used to compensate for emissions. Together, these instruments provide complementary pathways for managing overall carbon impact.
How Anew Can Help
Lowering carbon intensity can be daunting, especially for companies with operations that are especially fuel intensive or have multiple emissions streams.
Anew Climate designed its Anew CI technology platform for organizations that need help modeling and analyzing the carbon intensity of specific facilities, production processes, or supply pathways—distinct from traditional corporate carbon foot measurements.
The Anew CI platform produces detailed carbon intensity calculations, real-time compliance-ready outputs, and predictive insights to show the impact of the use of low carbon fuels. The platform, which is powered by machine learning and AI-driven analytics and supported by Anew’s team of technical and regulatory experts, also enables users to model carbon intensity under multiple lifecycle assessment frameworks.
By consolidating lifecycle assessment data into a single system, the Anew CI platform enables fuel producers, corporations, and obligated parties to better quantify, manage, and maximize the value of low-carbon strategies. The platform integrates Anew’s tools, models, and expertise with proprietary technology and datasets from P6 Technologies, acquired in December 2025.