Definition
The following emissions are summarized under the category of upstream transportation:
- Transportation and distribution of products purchased in the reporting year between a company's Tier 1 suppliers and its own operations in vehicles not owned or operated by the reporting company. If several carriers are involved in the delivery, the emissions of all actors are added together. Emissions for fuels are not included.
- Third-party transportation and distribution services purchased by the reporting company in the reporting year, including inbound logistics, outbound logistics and third-party transportation between the company's own facilities.
Emissions can arise from the following transportation and distribution activities along the entire value chain:
- Air transportation
- Rail transportation
- Road transportation
- Shipping
- Storage of purchased products in department stores, distribution centers and retail facilities.
Note: Emissions from the transportation and distribution of purchased products upstream of Tier 1 suppliers are recorded in Scope 3 Category 1 - Purchased goods and services.
Accounting for inbound logistics
The following methods can be used to account for inbound logistics:
- Fuel-based method: The amount of fuel consumed is multiplied by a fuel-based emission factor.
- Distance-based method: The distance is multiplied by the mass or volume of the good and the emission factor, which takes into account the average fuel consumption, the average load factor, the average mass or volume of the good and the associated emissions.
- Spend-based method: The spend of the transportation is multiplied by an spend-based emission factor.
The fuel-based method is the most accurate, followed by the distance-based method and finally the spend-based method.
The fuel-based method
The fuel-based method should be used if companies can obtain data on the fuel consumption of transport companies and, if applicable, on refrigerant losses due to the cooling of products from vehicle fleets. Optionally, companies can calculate the emissions from the return journey of the empty vehicle.
If no data on fuel consumption is available, companies can derive the fuel consumption based on the following factors:
- Spend on fuel and average price of fuel
- Distance traveled and fuel efficiency of the vehicle
- Amount spent on transportation
The fuel-based method is most appropriate if the vehicle only transports the goods purchased by the reporting company. Otherwise, emissions should be split between goods transported for the reporting company and goods transported for other companies.
Required activity data:
- Amount of fuels consumed (e.g. diesel, gasoline, kerosene, biofuels)
- Amounts spent on fuels
- Amounts of fugitive emissions (e.g. from air conditioning and refrigeration).
If applicable:
- Distance traveled
- Average fuel efficiency of the vehicle, expressed in liters of fuel consumed per ton and kilometer transported
- Cost of fuel
- Volume and/or mass of goods purchased in the vehicle
- Information on whether the products are refrigerated during transportation
- Amount spent on transportation by type (e.g. road, rail, air, ship), using market values (e.g. dollars).
Emission factors required:
- Cradle-to-gate emission factors of transportation type per unit of economic value (e.g., kg CO2 e/$).
- Convert inflation data, if applicable, to convert market values between the year of EEIO emission factors and the year of activity data.
The distance-based method
The distance-based method should be used when companies do not have access to fuel records of transportation vehicles or their shipments are smaller than a whole vehicle.
Activity data required:
Emission factors for this method are typically expressed in grams or kilograms of carbon dioxide equivalent per tonne-kilometer or TEU-kilometer. Tonne-kilometer is a unit of measurement representing one ton of goods transported over 1 kilometer. TEU-kilometer is a unit of measurement representing one twenty-foot container equivalent of goods transported over 1 kilometer.
Companies should collect data on the distance traveled by transport service providers. This data can be determined as follows:
- Mass or volume of products sold
- Actual distances provided by the transportation company (if the actual distance is not available, companies can use the shortest theoretical distance)
- Online maps or calculators
- Published port-to-port distances.
Actual distances should be used when available and each section of the transportation supply chain should be recorded separately.
Emission factors required:
- Emission factor by transport mode (e.g. rail, air, road) or vehicle type (e.g. articulated truck, container ship) expressed in units of greenhouse gases (CO2, CH4, N2O or CO2 e) per unit mass (e.g. ton) or volume (e.g. TEU) of distance traveled (e.g. kilometers).
- Common forms of emission factors are kg CO2 e/tonne/km for road transport or kg CO2 e/TEU/km for maritime transport.
The expenditure-based method
If neither the fuel-based nor the distance-based method can be used, companies should use the expenditure-based method. The expenditure can be taken from invoices or financial accounting systems.
Activity data required:
- Amount spent on transportation by type (e.g., road, rail, air, ship), using market values (e.g., dollars).
Emission factors required:
- Cradle-to-gate emission factors of transportation type per unit of economic value (e.g., kg CO2 e/$).
- Convert inflation data, if applicable, to convert market values between the year of EEIO emission factors and the year of activity data.
Data collection
Guidance on data collection for the fuel-based method:
Data sources for activity data include:
- Aggregate fuel receipts
- Purchasing records (provided by transportation service providers)
- Internal transportation management systems
- Guidance on data collection for the distance-based method:
Companies can obtain activity data from the following sources:
- Purchase orders
- Specific transportation companies or carrier operators
- Internal management systems
- Industry associations
- Online maps and calculators
Guidance on data collection for the expenditure-based method:
Data sources for activity data include:
- Internal data systems (e.g. financial accounting systems)
- Invoices
Accounting for upstream transportation in the Climate Hub
No predefined activities are stored in the Climate Hub. You can create new activities using the Add own activity button. You can find a detailed description here.
Further information can be found in the Technical Guidance for Calculating Scope 3 Emissions of the GHG Protocol in Chapter 4: Upstream Transportation and Distribution from page 49.