Examples of Scope 3 carbon emissions from different Supply Chain sectors

by VesselBot’s Marketing Team

July 7, 2023
Examples of Scope 3 carbon emissions from different Supply Chain sectors

Scope 3 emissions are indirect emissions from sources not owned or controlled by the reporting organization but resulting from the organization's activities. Scope 3 emissions include transportation of goods, employee commuting, business travel, purchased goods and services, waste generated from operations, and the use of sold products.

The most significant Scope 3 emissions come from purchased goods and services. One of the most important categories is upstream and downstream transportation. Other significant sources include the distribution of goods and end-of-life product management.

Scope 3 emissions account for an average of 75% of companies' greenhouse gas emissions. Below we will see some examples to understand Scope 3 emissions better.

Scope 3 transportation emissions Vessels

An example from the Commercial Shipping Industry

Scope 3 Carbon emissions from the shipping industry can be exemplified by the fuel used by cargo ships. As the world's demand for goods increases, the amount of cargo shipped worldwide also increases, resulting in an increase in fuel consumption, thus, more CO2 in the environment. Burning fossil fuels, such as oil and gas, produces greenhouse gases, such as carbon dioxide, which negatively impact the environment. Some initiatives have been implemented to reduce Scope 3 carbon emissions from the supply chain shipping industry. For instance, many shipping companies are investing in more fuel-efficient ships, which can help reduce fuel consumption or retrofit their engines to consume/blend biofuel with their fossil fuel to reduce their environmental footprint. Carrier Companies increasingly use renewable energy sources like wind and solar to power their vessels.

Shippers have been increasing their pressure on Carriers in several ways to reduce their emissions.

Some shippers are participating in carbon offsetting initiatives involving investing in projects that reduce greenhouse gas emissions. These initiatives, while encouraging, are not enough to reduce the emission of greenhouse gases from the shipping industry.

Another way Shipper companies reduce their scope 3 emissions is by utilizing accurate transportation emissions data to select the best Carrier Schedule or the lowest emitting vessel or Carrier when booking freight.

Companies can also use accurate data to include specific clauses in their contracts requiring Carriers to reduce their emissions by x% based on their emissions intensities per Trade Lane.

To tackle the problem of emissions reduction, governments, and industry leaders must continue to invest in research and development to find better ways to reduce fossil fuel usage. Additionally, it is becoming increasingly critical that companies stop using non-accurate average emission conversion factors found in various Protocols and start using accurate data to measure their Scope 3 emissions as it represents, in most cases, the most significant part of their total company emissions. Companies cannot make data-driven decisions to reduce their emissions footprint without accurate emissions data. By investing in research and development, utilizing renewable energy sources, and encouraging carbon offsetting initiatives, the world can reduce the negative impact of shipping on the environment.

Scope 3 transportation emissions Trucks

Supply Chain Transportation emissions from the Trucks fleet

One example of Scope 3 Transportation carbon emissions is the emissions emitted from trucks that move products worldwide to carry raw materials or finished goods between two points. For example, a company that delivers products to customers may use a third-party fleet of diesel trucks that move the products from the company's warehouse to the customer. In this case, the emissions from the trucks would be considered Scope 3 carbon emissions. These emissions can come from various sources, such as the fuel used by the Truck, the exhaust from the engine, and other parts of the Truck itself (ex., Refrigerator trucks). As the Truck moves around, it emits carbon dioxide, a greenhouse gas contributing to climate change. Trucks may also release other pollutants, such as nitrogen oxides and particulate matter. The impact of these emissions on the environment can be significant. Carbon dioxide is a major contributor to global warming, and the release of other pollutants can cause different health issues, including asthma, bronchitis, and other respiratory problems.

Like Sea Transportation, initiatives are happening on both ends of the value chain toward a more decarbonized Truck transportation.

On one side, Truck Carrier companies may use various strategies to reduce their emissions to attract more customers. For example, they invest in more fuel-efficient vehicles, use alternative fuels such as biodiesel or electric, and implement preventative maintenance on their vehicles. Also, training drivers to more efficient driving -by avoiding rapid acceleration and deceleration -and using the most direct routes to their destinations can significantly reduce carbon emissions. Through these strategies, truck owners can attract more Shippers that are Carbon sensitive companies and try to reduce their scope three carbon emissions and thereby help to protect the environment.

On the other side, Shippers can utilize accurate data from their Transportation and their Truck Carriers, allowing them to benchmark the performance of each Carrier per Trade Lane and rank each Carrier based on their emissions intensity and efficiency. These data can enable them to make better decisions on Carrier Selection, Network Selection, etc.

Scope 3 transportation emissions Aviation

An example from the commercial aviation sector

Commercial airlines produce significant carbon emissions that directly impact the environment. Carbon emissions from commercial airplanes substantially contribute to global warming and climate change. The aviation industry accounts for approximately 2-3% of global carbon emissions, which is expected to increase as air travel continues to rise. In 2013 the International Civil Aviation Organization (ICAO) set a goal to reduce carbon emissions from commercial airplanes. To achieve this goal, the ICAO developed a Carbon Offsetting and Reduction Scheme (CORSIA), which requires airlines to purchase and use carbon offsets when they exceed their emissions allowance. Airlines can reduce their carbon emissions from commercial airplanes by using more efficient engines. The latest generation of engines, such as the Rolls-Royce Trent XWB-84, are designed to be more fuel efficient and produce fewer emissions. Airlines can also reduce emissions by flying more direct routes and using advanced air traffic control systems to minimize delays. Another way airlines can reduce their carbon emissions from commercial airplanes is by utilizing sustainable aviation fuels (SAF). SAF is a renewable fuel from plant-based sources such as algae, waste oil, and wood chips. SAF has a lower carbon footprint than fossil fuels and can reduce carbon emissions by up to 80%. Airlines can also reduce their emissions by using lighter materials in their aircraft and reducing the weight of their onboard cargo. Reducing carbon emissions from commercial airplanes is essential in reducing global carbon emissions and combatting climate change. By utilizing more efficient engines, flying more direct routes, and using sustainable aviation fuels, airlines can reduce carbon emissions and help protect the environment.

How can Business products affect the environment in the supply chain

How can Business products affect the environment?

Scope 3 Carbon emissions that come from business products can be seen in a variety of ways. For example, a company that produces air conditions buys products from other suppliers (upstream) and then sells the products, thus moving them with vessels or trucks (downstream), needs to make sure that the suppliers they use have the lowest emissions per kg compared to other suppliers. Moreover, the chosen suppliers must estimate emissions in the most accurate way and not just use averages, as these are nowhere close to reality. By being aware of its emission sources, a company can implement strategies to reduce carbon emissions and become more environmentally friendly.

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