Financed emissions · PCAF
PCAF motor vehicle loans method for equipment finance
The PCAF Standard’s motor vehicle loan method, subchapter 5.6 of the Third Edition, sets out how a lender calculates and attributes the emissions of financed vehicles, including trucks and earthmoving equipment.
Scope of the method
PCAF defines motor vehicle loans as on-balance sheet loans and lines of credit to businesses and consumers for the finance of one or several motor vehicles. A fleet can be a single business vehicle.
PCAF does not prescribe a closed list of vehicle types. Each institution defines the types it includes and explains any exclusions. The standard’s example list is set out below.
- Passenger cars
- Motorcycles
- Light commercial trucks, such as vans
- Medium and heavy commercial trucks
- Recreational vehicles
- Buses
- Snowmobiles and all-terrain vehicles
- Boats, including outboard motors
- Yellow equipment: earthmoving vehicles for mining and construction
Attribution factor
Financed emissions are the vehicle’s annual emissions multiplied by the attribution factor: the outstanding amount divided by the total value at origination.
Value at origination is the price of the vehicle at the time of the transaction, being equity plus debt at origination. The outstanding amount is adjusted annually and falls to zero when the loan is repaid. Where the value at origination is unknown, institutions should take a conservative approach and assume 100% attribution.
| Step | Calculation |
|---|---|
| Attribution factor | $310,000 outstanding ÷ $520,000 value at origination = 59.62% |
| Financed emissions | 116.1 t CO₂-e × 59.62% = 69.2 t CO₂-e |
| Value at origination unknown | 116.1 t CO₂-e × 100% = 116.1 t CO₂-e |
Emissions covered
Institutions report the vehicle’s annual Scope 1 emissions from fuel combustion and Scope 2 emissions from electricity used by hybrid and electric vehicles. The vehicle’s own Scope 3 emissions, such as production, delivery and decommissioning, need not be covered.
Where production emissions are reported, they are included as a lump sum in the first year of financing, for new vehicles only.
Calculation options 1a to 3b
The standard sets out three options with six sub-options. The attribution factor is the same in each. The options differ in the activity data used, and each carries a data quality score.
| Option | Data used | Score |
|---|---|---|
| 1a | Primary data on the vehicle’s actual fuel consumption | 1 |
| 1b | Known make and model, its efficiency and fuel type, and primary data on actual distance travelled | 1 |
| 2a | Known make and model, with distance travelled estimated from local statistics (state or province) | 2 |
| 2b | Known make and model, with distance travelled estimated from regional statistics (large country or subcontinent) | 3 |
| 3a | Vehicle type known but not make and model, with distance from local or regional statistics | 4 |
| 3b | Average vehicle: make, model and type unknown, with distance from local or regional statistics | 5 |
Score 1 is the highest data quality and score 5 the lowest. Each option assumes the outstanding amount and value at origination are known.
Applying the method to equipment
The options are written for distance travelled. Earthmoving and materials handling equipment records operating hours rather than kilometres, so fuel records or hours and a documented fuel-use rate set the activity basis. The standard allows an alternative approach where none of its options can be used, provided the reasons are explained, and we document the approach used for each asset.
Australian emissions estimates for diesel equipment use the National Greenhouse Accounts Factors. Non-road plant and road-registered vehicles use different diesel factors.
How Assera applies the method
Asset-level financed emissions for your equipment book under this method: each financed machine, its emissions and your attribution, in a workbook that recalculates every figure.
Where a loan record does not hold the value at origination, our asset-sales database supports an estimate for the same make, model and year.
Sources
- PCAF: The Global GHG Accounting and Reporting Standard Part A: Financed Emissions, Third Edition
December 2025. Subchapter 5.6, Motor vehicle loans, Table 5.6-1 and chapter 6.1.
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