As economies around the globe are steering towards energy transition, emissions reporting is becoming the new norm and a challenge for many companies. However, complying with environmental regulations can also prove beneficial from a cost perspective, given that a company has a deep understanding of its value and supply chain.
So, what is emissions reporting? Emissions reporting refers to measuring and disclosing the greenhouse gas emissions your company is responsible for. Scope 3 emissions, along with Scope 1 and Scope 2, represent the three broad categories that companies must track and report.
Understanding Scope 1 Emissions
The easiest way to define Scope 1 emissions is as “direct emissions”. Whether you are a carrier specializing in road transport, rail, shipping, or aviation, Scope 1 emissions refer to directly created emissions. What does that mean for a truck company? Owned assets emit emissions when burning fuel to operate. The vehicles used to carry client cargo are a typical example. The diesel or gas that those vehicles (predominantly) burn to move emits CO2 emissions that the company directly causes.
Scope 1 emissions don’t end there. Let’s assume that a truck company has a warehouse in Los Angeles, where cargo is loaded in trucks using forklifts. Even those forklifts need energy to operate, and that energy causes emissions, which are included in the Scope 1 emissions for the trucking company.
Now, let’s hypothesize that the trucking company is moving cargo from Los Angeles to Las Vegas. The trucking company directly causes the fuel burned during that transportation. Therefore, CO2 emissions will be tied to the Scope 1 emissions for the company.
But what if the company does not own the trucks?
Understanding Scope 2 Emissions
In general, Scope 2 emissions are tied to purchased energy, or more commonly, electricity use. They are described as “indirect emissions from the energy you buy”. For a company, that would entail electricity for offices, depots, or warehouses.
However, apart from the abovementioned, Scope 2 emissions could include the energy consumption of leased assets. It all depends on the type of lease. Let’s assume that per the lease contract, the operational control of the leased assets (for example, an office) resides with the lessee. If the company has operational control and directly pays for the energy consumed, the emissions tied to that energy consumption fall under the umbrella of Scope 2 emissions.
However, if, based on the lease contract, the lessor pays the energy bill, that means the lessee has no direct control, and the emissions are considered Scope 3 emissions.
Understanding Scope 3 Emissions in Transportation
Indirect emissions usually fall under the category of Scope 3, and for many companies, they might incur significant costs. In general, there are 15 different categories of Scope 3, not all applicable to every company. We will focus here on transportation.
Earlier, we mentioned that the fuel burnt to carry cargo with company-owned trucks translates to CO2 emissions that fall under the umbrella of Scope 1 emissions for the company. What if a company outsources the transport of goods to a carrier? Emissions emitted for the transport of goods are counted as Scope 3 emissions for the first company and as Scope 1 emissions for the carrier.
Now, let’s imagine a scenario where the carrier does not provide services for the total length of the transport and needs to outsource part of it to another carrier. Those emissions become Scope 3 emissions for the first carrier and naturally Scope 1 emissions for the second carrier.
In our earlier example with the trucking company shipping goods from Los Angeles to Las Vegas, we will hypothesize that part of the cargo needs to be delivered to Phoenix. Assuming our company does not provide services from Las Vegas to Phoenix, another trucking company will need to make the delivery. Scope 1 emissions of the second carrier are considered Scope 3 emissions of the first carrier.
Challenge, Opportunity, or both?
Scope 3 emissions in the transportation industry are a complex matter. Undoubtedly, it constitutes a significant challenge for many companies. However, successful businesses turn challenges into opportunities. By collecting granular, primary data for their emissions reporting, instead of relying on averages or outdated assumptions, companies move beyond compliance and gain the ability to optimize their logistics networks. This enables them to uncover cost and emission reduction opportunities that would otherwise remain hidden, while ensuring their reporting withstands scrutiny and translates into strategic action. In doing so, they position themselves as leaders in the industry, moving ahead of competitors by turning compliance into a source of competitive advantage.
Turning Scope 3 Complexity into Strategic Clarity
The transportation industry's approach to Scope 3 emissions is at a crossroads. Companies can choose to treat emissions reporting as a compliance burden, relying on industry averages and generic calculations that offer little insight beyond meeting regulatory requirements. Or they can recognize that the same data needed for accurate reporting contains the intelligence to transform their entire logistics operation.
The difference lies in the methodology. When companies move beyond spend-based calculations and industry averages to capture actual shipment performance data, they unlock visibility that extends far beyond emissions reporting. This granular, primary data reveals carrier performance variations, identifies consolidation opportunities, and exposes inefficiencies that impact both environmental and financial performance.
Consider the ripple effects: accurate emissions data enables precise carbon credit purchasing, eliminating the overbuying that results from inflated calculations. Real carrier performance metrics strengthen contract negotiations. Route-level emissions intelligence identifies modal shift opportunities that reduce both costs and environmental impact simultaneously.
The companies that will lead in this new landscape are those that view Scope 3 emissions measurement not as an isolated compliance task, but as the foundation for supply chain optimization. They understand that the most accurate emissions data comes from the same operational intelligence that drives logistics excellence, and they're building competitive advantages accordingly.
This transformation requires more than good intentions; it demands the right technology infrastructure. Advanced solutions like VesselBot's Supply Chain Sustainability Platform enable companies to automatically collect primary data across their entire transportation network, transforming complex multimodal emissions data into actionable optimization insights that drive both environmental and financial performance.
The question isn't whether your company will measure Scope 3 emissions. The question is whether you'll use that measurement to drive strategic value, or simply check a regulatory box.