The process for estimating CO₂ emissions from fuel combustion using the Tier 1 Reference or Sectoral approaches or the Tier 2 or 3 methods can be divided into the following steps:

a. The first step of the IPCC Reference Approach is to estimate apparent consumption of fuels within the country. This step requires a balance of primary fuels produced, plus imports, minus exports, minus international bunkers and the net changes in stocks. In this way carbon is brought into the country from energy production and imports (adjusted for stock changes) and moved out of the country through exports and international bunkers.

In order to avoid double counting it is important to distinguish between primary fuels, which are fuels found in nature such as coal, crude oil and natural gas, and secondary fuels or fuel products, such as gasoline and lubricants, which are derived from primary fuels. Note that “apparent consumption” of secondary fuels can result in negative numbers when a net export or stock of a particular fuel type increases for the country. “Apparent consumption” of secondary fuels should be added to the “apparent consumption” of primary fuels.

The production of secondary fuels, through refining processes, should be ignored in the calculations because the carbon in these fuels has already been included in the supply of primary fuels from which they were derived.