Scope 3 Category 9 Overview: Transportation and Distribution
SCOPE 3 CATEGORY 9
Emissions are largely concerned with indirect emissions resulting from a company's transportation and distribution activities, which are outsourced or contracted to a third party. It is an important area in carbon accounting since it captures emissions from the delivery of raw materials to production sites, manufacturers to retailers, and even end consumers if logistics are handled by third parties.
Category 9 includes all indirect GHG emissions associated with the transportation and distribution of a company's products that are not owned or controlled by the company.
This category is essential for businesses with long supply chains because it includes emissions from activities that are not owned or controlled by them but are critical to their operations. These emissions can be significant, especially for businesses that rely largely on third-party service providers for product distribution and logistics.
Category 9: Transportation and Distribution
This category is subdivided into two parts:
- Upstream Transportation and Distribution: Emissions from the transportation of goods to the reporting company from suppliers.
- Downstream Transportation and Distribution: Emissions from the transportation of goods from the reporting company to the end consumer, including returns and end-of-life transportation.
Emission Calculation
The calculation and reporting of these emissions require a thorough understanding of logistics and supply chain operations. Companies typically need data on fuel consumption, transportation distances, load factors, and the types of vehicles used. Emissions factors applied are generally based on the type of fuel used and the mode of transportation (road, rail, air, or sea).
Example
- A consumer electronics company that manufactures devices in China but sells globally would need to account for the emissions associated with shipping these products to various international markets under Scope 3 Category 9. This would include emissions from the ships, aircraft, and trucks that transport the products from the factory to the consumers, assuming these services are outsourced.
Accurately accounting for Scope 3 Category 9 emissions is essential for companies aiming to understand their full carbon footprint and identify opportunities for reducing emissions in their supply chain. It also plays a crucial role in the development of comprehensive GHG inventories that reflect the total impact of a company's activities.
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