Definition
This category includes emissions generated in the reporting year from the transportation and distribution of products sold, provided that these take place in vehicles or facilities that are neither owned nor controlled by the reporting company. It is important to note that only transportation of sold goods for which the reporting company makes no payments is included in category 9. However, if transportation costs are covered by the company, they fall under category 3.4 Upstream transportation. In addition, category 3.9 Downstream transportation also includes emissions from retail and storage. Additionally, companies can include emissions from customers traveling to and from retail stores.
If the reporting company sells an intermediate product, it should report the emissions from the transportation and distribution of this intermediate product between the reporting company's point of sale and either the end consumer (if the end use of the intermediate product is known) or the business customers (if the end use of the intermediate product is unknown).
Emissions can result from the following transportation and distribution activities throughout the value chain:
- Air transportation
- Rail transportation
- Road transportation
- Shipping
- Storage of purchased products in department stores, distribution centers and retail facilities.
Accounting for downstream transportation
The same methods can be used to calculate emissions from downstream transportation as for upstream transportation:
- 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 a 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:
- Expenditure 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.
Activity data required for the fuel-based method:
- 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 tonne per kilometer transported
- Cost of fuel
- Volume and/or mass of goods purchased in the vehicle
- Information on whether the products are refrigerated during transportation
Emission factors required for the fuel-based method:
- Cradle-to-gate emission factors of the transportation mode per unit of economic value (e.g. kg CO2 e/$).
- If applicable, inflation data to convert market values between the year of EEIO emission factors and the year of activity data.
The distance-based method
The distance-based method should be used when companies do not have access to fuel records of the transportation vehicles or their shipments are smaller than a whole vehicle.
If the actual distances are not known, they can be estimated using a combination of the following factors:
- Distance reported by the transportation company
- Government, academic or industry publications
- Online maps and calculators
- Published port-to-port distances.
Distance-based method emission factors required:
- Emission factor by mode (e.g., rail, air, road) or vehicle type (e.g., tractor-trailer, container ship) expressed in units of greenhouse gases (CO2, CH4, N2O, or CO2 e) per unit mass (e.g., ton) or volume (e.g., TEU) of distance (e.g., kilometers) traveled.
The spend-based method
If neither the fuel-based nor the distance-based method can be used, companies should use the spend-based method to derive fuel consumption:
- Spend on fuel from invoices or financial accounting systems
- Distance traveled and fuel efficiency of the vehicle
- Amount spent on transportation services. Share of fuel costs in total costs and average price of fuel
Activity data required by the expenditure-based method:
- Amount spent on transportation by type (e.g., road, rail, air, ship), using market values (e.g., dollars).
Required emission factors of the expenditure-based method:
- Cradle-to-gate emission factors of transportation mode per unit of economic value (e.g., kg CO2 e/$).
- If applicable, inflation data to convert market values between the year of EEIO emission factors and the year of activity data.
Accounting for outbound logistics 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 9: Downstream Transportation and Distribution from page 102.