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HomeMy WebLinkAboutStaff Report 2607-6573CITY OF PALO ALTO Climate Action and Sustainability Committee Friday, August 07, 2026   Agenda Item     3.Preliminary Review of the 2025 Greenhouse Gas Inventory and Overview of Scope 3 Emissions; CEQA Status - Not a Project Late Packet Report Added Climate Action and Sustainability Committee Staff Report Report Type: ACTION ITEMS Lead Department: City Clerk Meeting Date: August 7, 2026 Report #:2607-6573 TITLE Preliminary Review of the 2025 Greenhouse Gas Inventory and Overview of Scope 3 Emissions; CEQA Status - Not a Project This item will be a late packet publication on 7/30/26. 1 0 1 9 4 Climate Action and Sustainability Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Public Works Meeting Date: August 7, 2026 Report #:2606-6481 TITLE Preliminary Review of the 2025 Greenhouse Gas Inventory and Overview of Scope 3 Emissions; CEQA Status - Not a Project RECOMMENDATION This is a discussion item; no action or recommendation is requested. EXECUTIVE SUMMARY The City has made significant strides in implementing the Sustainability and Climate Action Plan (S/CAP) to meet its sustainability goals, including reducing greenhouse gas (GHG) emissions by 80% below 1990 levels and achieving carbon neutrality by 2030. Preliminary calculations show that by 2025, Palo Alto had reduced total citywide GHG emissions by 49.1% from the 1990 baseline, despite a 20.5% population increase during the same period. This is a slight emissions increase from 2024, when GHG emissions reductions were 50.2%. For municipal operations, preliminary calculations show that in 2025 the City emitted a total of 15,023 MT CO2e, a roughly 62.9% reduction from the 2005 baseline, although an equivalent comparison cannot be made due to significant changes in methodology. BACKGROUND 1 0 1 9 4 In June 2023, City Council adopted the 2022 Sustainability and Climate Action Plan (S/CAP),4 certified the Comprehensive Plan Environmental Impact Report Addendum: Update to the Sustainability and Climate Action Plan,5 and accepted the 2023-2025 S/CAP Work Plan.6 The S/CAP aligns with several goals of the 2030 Comprehensive Plan Implementation Plan, as well as the City Council Value of “Climate Leadership and Environmental Stewardship”.7 The 2025 Greenhouse Gas (GHG) Inventory calculates Palo Alto Citywide and Municipal GHG emissions for calendar year 2025. Preliminary calculations show that, due to various City-led initiatives, programs, and activities focused on sustainability and climate action, by the end of 2025 Palo Alto had reduced total citywide emissions by 49.1% from the 1990 baseline, despite a 20.5% population increase during the same period. Due to changes in methodology, it is not possible to make an equivalent comparison of the 2025 Municipal GHG Inventory with previous inventories. However, by the end of 2025, the City reduced total municipal GHG emissions by roughly 62.9% from the 2005 baseline. A full GHG Inventory analysis will be provided at a City Council meeting later this fall. ANALYSIS The City is committed to a sustainable future. The City owns, operates, and maintains a full- service utilities portfolio that provides electric, natural gas, fiber, water, refuse, and wastewater services to residents and businesses in Palo Alto. Palo Alto’s continued leadership in advancing sustainability commitments has succeeded mainly because of ongoing collaboration among community stakeholders, City departments, and the City Council. One way the City tracks its progress on achieving the goals of the Sustainability and Climate Action Plan (S/CAP) is through a comprehensive accounting of greenhouse gas (GHG) emissions in a GHG Inventory. GHG inventories calculate, quantify, and assess community-associated emissions and their sources. Generation-Based Greenhouse Gas Inventory There are two types of GHG emissions inventories: 1.Generation-based GHG inventory – This measurement method helps a community understand its level of emissions based on community energy use. It includes 1) direct consumption of energy, 2) consumption of energy via the electrical grid, and 3) 4 2022 Sustainability and Climate Action Plan; https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/2022-scap-report_final.pdf 5 Comprehensive Plan Environmental Impact Report Addendum: Update to the Sustainability and Climate Action Plan, 2023; https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas- minutes/city-council-agendas-minutes/2023/2023comprehensive-plan-environmental-impact-report-addendum- update-to-the-scap.pdf 6 2023-2025 S/CAP Workplan, 2023; https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/2023-2025-scap-work-plan_final.pdf 7 2030 Comprehensive Plan; https://www.cityofpaloalto.org/Departments/Planning-Development- Services/Housing-Policies-Projects/2030-Comprehensive-Plan 1 0 1 9 4 emissions from the treatment/decomposition of waste. This is the industry-accepted methodology for quantifying community GHG emissions, with emissions reported by emission source category.8 2.Consumption-based GHG inventory – This measurement method helps a community understand its level of emissions based on consumption. It offers an alternative, more holistic approach to quantifying emissions from a community’s activities and the consumption of goods and services (including food, clothing, electronic equipment, etc.) 8 There are two reporting frameworks commonly used by cities: the U.S. Community Protocol and the Global Protocol for Communities (GPC). Palo Alto uses the GPC framework. 1 0 1 9 4 by city residents, with emissions reported by consumption category. It includes emissions associated with production, transportation, and disposal of products and services consumed by a community over a given period. Like most cities, Palo Alto completes a generation-based GHG inventory. In 2014, the World Resources Institute, C40 Cities Climate Leadership Group (C40), and ICLEI – Local Governments for Sustainability (ICLEI) partnered to create a global standard protocol for generation-based GHG inventories.11 The Global Protocol for Community-Scale GHG Emissions Inventories (GPC) provides a robust framework for accounting and reporting city-wide GHG emissions for a generation-based inventory. The GPC Protocol is the official protocol specified by the Global Covenant of Mayors and defines what emissions must be reported and how. For generation-based GHG inventories, GHG emissions from community activities are classified into three main sectors: •Stationary Energy (e.g., building electricity consumption, fugitive natural gas emissions) •Transportation (e.g., on-road passenger vehicles, off-road equipment) •Waste (e.g., solid waste disposal, wastewater treatment and discharge) Activities within a city can generate GHG emissions both inside and outside the city boundary. The GPC groups emissions into three categories based on where they occur: Scope 1: GHG emissions from sources located within the city boundary, such as stationary fuel consumption. Scope 2: GHG emissions occurring due to the use of grid-supplied electricity, heat, steam, and/or cooling within the city boundary. Scope 3: All other GHG emissions that occur outside the city boundary because of activities taking place within the city boundary. Figure 1. shows the sources and boundaries of GHG emissions for a generation-based inventory. 11 Formerly the International Council for Local Environmental Initiatives, renamed in 2003 to ICLEI – Local Governments for Sustainability. 1 0 1 9 4 Figure 1. Sources and Boundaries of GHG emissions for a Generation Based Inventory. Palo Alto’s first generation-based citywide inventory was completed for 2005 and then extrapolated for 1990 (the baseline year). Beginning in 2010, new citywide GHG inventories were completed annually, enabling Palo Alto to track progress over time. Palo Alto’s 2025 Citywide Greenhouse Gas Emissions Inventory The 2025 Palo Alto Citywide GHG inventory follows the calculation and reporting standards outlined in the GPC BASIC reporting level.13 This inventory follows the city-inducted framework in the GPC protocol, which totals GHG emissions attributable to activities taking place within the geographic boundary of the city.14 Preliminary calculations show that in 2025, Palo Alto emitted an estimated 406,607 metric tons (MT) of carbon dioxide equivalent (CO2e) from the residential, commercial, industrial, transportation, waste, water, and municipal sectors. Compared with the 1990 base-year emissions, these emissions represent a 49.1% decrease in total community emissions, despite a 20.5% population increase during the same period. Emissions in 2025 equated to 6.0 MT CO2e per capita. The California Air Resource Board’s 2017 Scoping Plan Update recommends a goal for local governments of 6 MT CO2e per capita by 13 GPC Executive Summary; https://ghgprotocol.org/sites/default/files/2022-12/GPC_Executive_Summary_1.pdf 14 GPC Protocol; https://ghgprotocol.org/sites/default/files/standards/GHGP_GPC_0.pdf 1 0 1 9 4 2030 and 2 MT CO2e per capita by 2050.17 To achieve an 80% reduction in GHG emissions, Citywide GHG Emissions need to be 160,000 MT CO2e. Figure 2: 2025 Palo Alto Citywide Greenhouse Gas Emissions by Sector 2e), are attributed to Transportation and Mobile Sources. The main driver of these emissions is fuel combustion from internal combustion engine (ICE) vehicles, specifically passenger vehicles (72% of all transportation emissions), commercial vehicles (17% of all transportation emissions), and buses (2% of all transportation emissions). Since electricity in the City is carbon-neutral, there are no GHG emissions attributed to passenger, commercial, or bus electric vehicles (EVs). Off-road vehicles and equipment account for 8% of all Transportation and Mobile Sources GHG emissions, while Aviation Fuel accounts for 1%. Additionally, since Caltrain fully electrified the line serving Palo Alto in 2025 and now powers it with 100% renewable electricity, there are no GHG emissions associated with commuter rail. 17 California Air Resources Board 2022 Scoping Plan Appendix D Local Actions, November 2022; https://ww2.arb.ca.gov/sites/default/files/2022-11/2022-sp-appendix-d-local-actions.pdf 1 0 1 9 4 The second major contributor to GHG emissions is stationary combustion and the leakage of natural gas (methane). Together, these account for 33% (134,123 MT CO2e) of communitywide GHG emissions. About 43% of total Natural Gas (Methane) GHG emissions are attributed to residential natural gas combustion, 48% is attributed to commercial natural gas combustion, and 6% is attributed to industrial natural gas combustion. Natural gas leakage from distribution infrastructure occurs upstream of individual gas meters and is associated with community-wide gas use. Therefore, it is included in the inventory. Natural gas leakage accounts for 3% of total Natural Gas (Methane) GHG emissions. Figure 3: Palo Alto Citywide Greenhouse Gas Emissions by Sector, 1990 and 2019-2025 1 0 1 9 4 incorporates more recent vehicle registration data from the Department of Motor Vehicles. This update reflects accuracy improvements rather than an actual increase in per-mile GHG emissions. Another factor to note is that vehicle miles traveled (VMT) data for 2025 are not available; however, VMT data will be available for 2026. City staff and external experts calculated a preliminary estimate of 2025 VMT by scaling 2023 per capita VMT (the most recent year VMT data is available) based on 2025 population for passenger vehicles and service population for commercial vehicles and buses. This estimate reflects demographic growth and may not capture actual VMT trends. Table 1: Palo Alto Residential Registered Electric Vehicles (EVs) Residential Registered Vehicles 2018 2019 2020 2021 2022 2023 2024 2025 2,762 3,253 3,550 4,142 5,062 6,475 7,929 11,599 1,038 1,194 1,301 1,357 1,434 1,544 1,744 1,844 3,800 4,447 4,851 5,499 6,496 8,019 9,673 13,443 57,340 55,911 50,004 50,192 49,963 50,000*50,000*52,170* 6.7%8%9.7%10.7%13%16%19.3%26.9% 24%43%52%55% 2e in 2024 due to diesel combustion, are reported as zero in 2025. Off-road diesel emissions increased by 5%, while off- road gasoline decreased by 2%, and aviation fuel emissions increased by 4% compared to 2024. 1 0 1 9 4 Natural Gas (Methane) combustion emissions increased by 2.2% in 2025 compared to 2024, driven by an 8.1% increase in commercial natural gas emissions. Residential natural gas GHG emissions decreased by 1.5% and industrial natural gas emissions decreased by 11.6% compared to 2024. These fluctuations reflect variability in natural gas consumption driven by weather conditions, energy efficiency improvements, occupant behavior, and community growth. Overall, Natural Gas (Methane) emissions were 31.9% below 1990 levels. Figure 4 shows historical trends in residential natural gas (methane) GHG emissions. Figure 4. Palo Alto Residential Natural Gas (Methane) Greenhouse Gas Emissions Table 2: Progress in Electrifying Gas Appliances & All Electric Homes through City Programs City Electrification Program 2019 2020 2021 2022 2023 2024 2025 1 0 1 9 4 Operation (LGO) Protocol,19 which aligns with the Global Protocol for Community-Scale GHG Emissions Inventories (GPC) local government operations protocol.20 Buildings and other facilities: Electricity use, natural gas combustion, water-energy consumption Streetlights and Traffic Signals: Electricity use City vehicle and equipment fleet: On- and off-road mobile combustion and electricity use from electric vehicles (EVs) Wastewater facilities (e.g., wastewater treatment and discharge): Indirect nitrous oxide emissions, process nitrous oxide emissions, electricity use, natural gas combustion Indirect emissions: Employee commuting, landfilled solid waste generation 2e from municipal operations, a 3% increase over 2024. GHG emissions from Palo Alto’s municipal operations are from five main sectors: Buildings and Other Facilities, Streetlights and Traffic Signals, Wastewater Facilities, City Vehicles and Equipment, and Indirect Emissions. Since the methodology has changed significantly for certain sectors since the first Municipal GHG Inventory was conducted in 2005, it is no longer possible to do an equivalent comparison with previous Municipal GHG inventories. However, the methodologies for Buildings and Other Facilities, Streetlights and Traffic Signals, and City Vehicles and Equipment are sufficiently similar to allow rough comparisons across these sectors. By the end of 2025, the City reduced total municipal GHG emissions by roughly 62.9% from the 2005 baseline. 19 LGO Protocol Rulebook. Available at: https://icleiusa.org/resources/local-government-operations-lgo-protocol/ 20 GPC Inventories for local government operations. Appendix B. Available at: https://ghgprotocol.org/sites/default/files/standards/GPC_Full_MASTER_RW_v7.pdf 1 0 1 9 4 nitrate. Elevated ammonia concentrations in the discharge are expected to continue until all four aeration basins are renovated and the system stabilizes. Once the system is fully optimized, N₂O emissions should decrease significantly. Based on the current schedule, startup is anticipated in 2027, material improvement is expected in 2028, and the full benefit should be realized around 2030. Table 3: Electric Vehicles in City of Palo Alto Fleet Palo Alto Fleet Electric Vehicles (EVs) (# of vehicles)2021 2022 2023 2024 2025 1 0 1 9 4 distribution, and disposal of the goods and services consumed. A consumption-based emissions inventory can lead to insights about where local consumption gives rise to emissions outside a city’s borders and suggests additional opportunities for reducing emissions. 23 In particular, this framework needs to address how to account for the embodied emissions in the food, goods, and services the community purchases that are not covered by generation-based GHG inventories. 24 For example, if a community consumes one million tons of cement each year, and producing and transporting each ton of cement releases 1 ton of CO2, the community’s consumption-based emissions inventory would include 1 million tons of CO2 associated with cement consumption, regardless of whether that cement was produced inside or outside the community’s jurisdictional boundaries. 25 23 Executive Department State of California. (2019). Executive Order B-55-18 to Achieve Carbon Neutrality. https://www.ca.gov/archive/gov39/wp-content/uploads/2018/09/9.10.18-Executive-Order.pdf. 24 Stockholm Environment Institute Consumption Based Emissions Inventory Guidebook. https://sustainableconsumption.usdn.org/climate/cbei-guidebook/overview 25 Stockholm Environment Institute Consumption Based Emissions Inventory Guidebook. https://sustainableconsumption.usdn.org/climate/cbei-guidebook/overview 1 0 1 9 4 income households. In addition, most emissions associated with different goods and services can occur at different life-cycle phases. For instance, for food, most emissions are associated with production, whereas for appliances, most of the emissions result from use. These distinctions can be important when considering and prioritizing policy interventions. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: