Definition
This category includes emissions related to the production of fuels and energy purchased and consumed by the reporting company in the reporting year that are not included in Scope 1 or Scope 2. Category 3 excludes emissions from the combustion of fuels or electricity consumed by the reporting company as they are already included in Scope 1 or Scope 2.
This category includes emissions from the following four activities:
| Activity | Description | Applicability |
| Upstream emissions from purchased fuels | Extraction, production and transportation of fuels consumed by the reporting company. Examples include the mining of coal, the refining of petrol, the transmission and distribution of natural gas, the production of biofuels, etc. | End consumers of fuels |
| Upstream emissions from purchased energy | Extraction, production and transportation of fuels used to generate electricity, steam, heat and cooling consumed by the reporting company. Examples include the mining of coal, the refining of fuels, the extraction of natural gas, etc. | End consumers of electricity, steam, heating, and cooling |
| Losses during transmission and distribution | Generation (upstream activities and combustion) of electricity, steam, heat and cooling consumed in a transportation and distribution system - reported by the end user. | End consumers of electricity, steam, heating, and cooling |
| Generation of purchased electricity sold to end consumers | Generation (upstream activities and combustion) of electricity, steam, heat and cooling purchased by the reporting entity and sold to final consumers - reported by utilities or energy retailers. Note: This activity is particularly relevant for utilities that purchase wholesale electricity supplied by independent power producers for resale to their customers. |
Utilities, and energy retailers |
Accounting for upstream emissions from purchased fuels
The following two approaches can be used for the calculation:
- Supplier-specific method: Collecting data from fuel suppliers on the upstream emissions (extraction, production and transportation) of the fuel consumed by the reporting company.
- Average data method: Estimation of emissions using secondary emission factors (e.g. industry average) for upstream emissions per unit of consumption.
Accounting for losses on transfer and distribution
The following two approaches can be used for the calculation:
- Supplier-specific method: collecting data from electricity suppliers on the loss rates in the grids where the reporting company consumes electricity.
- Average data method: Estimation of emissions using average transmission and distribution losses (e.g. national, regional or global averages, depending on data availability).
Accounting for the generation of purchased electricity that is sold to end consumers
The following two approaches can be used for the calculation:
- Supplier-specific method: collection of emissions data from electricity generators.
- Average data method: Estimation of emissions based on the average emission rates of the grid.
Required activity data
Companies should collect data on the quantities and types of fuels consumed:
To calculate emissions from this activity, companies should use life cycle emission factors that exclude emissions from combustion, as emissions from combustion are included in scope 1 (in the case of fossil fuels) or in a separate memorandum item (in the case of direct CO2 emissions from biomass or biofuel combustion). When using the supplier-specific method, companies should provide fuel supplier-specific emission factors for the extraction, production and transportation of fuels per unit of fuel consumed (e.g. kg CO2 e/kWh), broken down by fuel type and country/region. When using the average data method, companies should use average emission factors for upstream emissions per unit of consumption (e.g. kg CO2 e/kWh).
Calculation of upstream emissions from purchased electricity:
- Total quantities of electricity, steam, heat and cooling purchased and consumed per unit of consumption (e.g. MWh), broken down by supplier, grid region or country.
- Grid region, country or regional emission factors for the extraction, production and transportation of fuels per unit of consumption (e.g. kg CO2 e/kWh) of electricity, steam, heat or cooling generated.
Companies should ensure that the emission factors used to calculate upstream emissions from purchased electricity do not include emissions from incineration, as emissions from incineration for electricity generation are included in Scope 2.
Data acquisition
Companies can obtain the data as follows:
- Reference to their Scope 1 GHG inventory, including quantities, sources and types of fuels consumed
- Collecting data from their fuel procurement departments
- If necessary, collecting data from fuel suppliers
- Reference to life cycle databases.
Companies should break down the total amount of electricity, steam, heat or cooling purchased by characteristics such as supplier, grid region or country. The energy consumption data should then be multiplied by representative emission factors (e.g. supplier or grid region) to calculate the emissions.
Data sources for activity data include:
- Reference to their Scope 2 GHG inventories, including amount and sources of electricity, steam, heating and cooling
- Consumption and the grid mix in which the electricity was consumed
- National statistics published by government agencies
- Energy management departments of government agencies
- Energy suppliers or producers, if necessary.
Data sources for emission factors include:
- Emission factors developed by suppliers for the life cycle of fuels
- Life cycle databases - excluding emissions from combustion of fuels for electricity generation and from transmission and distribution (T&D) losses
Accounting for upstream chains in the Climate Hub
The upstream chains for the predefined activities in Scope 1 and Scope 2 are already stored in the Climate Hub. They are calculated automatically when you enter a consumption value in Scope 1 or 2.
Further information can be found in the Technical Guidance for Calculating Scope 3 Emissions of the GHG Protocol in Chapter 3: Fuel- and Energy-related Activities not included in Scope 1 or Scope 2 from page 38.