Scopes of GHG Emissions
Facts about GHG scopes of emission:
- While Scope 1 and 2 emissions are mandatory to report, scope 3 emissions aren’t.
- Scope 3 emissions usually have the largest emissions of any scope.
- The Greenhouse Gas Protocol Initiative was launched in 1998 and published its Corporate Standard in 2001.
- Around 99% of Apple’s carbon emissions are scope 3 emissions.
- GHG emissions not covered by the Kyoto Protocol, such as CFCs, NOx, etc. are not counted as scope 1 emissions but may be reported separately.
Scopes of GHG Emissions
The GHG protocol published its Corporate Standard in 2001, classifying emissions into three scopes. Each scope deals with different aspects of the production and consumption process. The different scopes have been defined and categorized in a specific way in order to avoid double counting.
Scope 1 emissions are direct emissions; they consider the emissions from sources under the ownership or control of the company. This can be divided into four categories: stationary, mobile, fugitive and process emissions. Stationary emissions come from the stationary combustion of fuel such as those from boilers, heaters and furnaces. Mobile emissions come from all vehicles a company owns that burn fuel. Fugitive emissions stem from gas leaks from air conditioning units and refrigerators, while process emissions derive from industrial processes.
Scope 2 emissions are indirect emissions caused by the generation of purchased energy. For instance, during the consumption of purchased heat, cooling, electricity or steam in powering a company’s factory, scope 2 emissions are emitted. Scope 2 emissions are physically released at the place where they are generated. These, along with scope 1 emissions, deal with resources that a company owns.
Scope 3 emissions, however, deal with resources that are not owned or controlled by the respective company, but occur due to the consequences of the company’s operations. Scope 3 emissions are also indirect; they are released from upstream and downstream activities throughout the value chain. The most polluting upstream activities include travel, employee commuting, waste disposal, transportation and distribution. Downstream activities include the running of franchises, the usage of sold products and their end-of-life treatment. Unlike scope 1 and 2 emissions, companies can choose not to report their scope 3 emissions.
There has been criticism regarding the optionality of reporting scope 3 emissions, as these emissions are usually the largest. For example, scope 3 emissions in 2019 accounted for about
88% of emissions from oil and gas and 75% of emissions from the electric utility sector. Not reporting this information may lead to investors making misinformed investment and voting decisions.
Overall, the categorization of emissions into these scopes allows companies to better focus their efforts on reducing their carbon footprint on their path to becoming carbon-neutral.
