Scope 3 Category 11 — Minimum boundary vs. life-cycle emission factors

Greenhouse Gas Protocol
1

Hello everyone,

We would appreciate your views on how the software applies Scope 3 Category 11 — Use of Sold Products, particularly for products that directly consume fuel or electricity during use.

Let us take the example of a company that manufactures and sells diesel-powered trains. The GHG Protocol Technical Guidance states that the calculation should use:

“Life cycle emission factors for fuels”
“Life cycle emission factors for electricity”

However, we have noticed that, for diesel consumption under Category 11, the software only includes the combustion emissions — Tank-to-Wheel — and excludes the Well-to-Tank emissions associated with fuel extraction, production, refining and transport.

We have observed a similar treatment for electricity: the software includes the emissions associated with electricity generation but excludes the upstream component and transmission and distribution losses.

We understand that the minimum boundary of Category 11 refers to the Scope 1 and Scope 2 emissions of the end user. This could support the approach applied by the software:

  • diesel: combustion or Tank-to-Wheel emissions only;
  • electricity: the end user’s Scope 2 emissions;
  • excluding WTT, upstream electricity emissions and T&D losses.

Nevertheless, the calculation guidance (GHGP) specifically refers to life-cycle emission factors, which could indicate that the upstream components should also be included.

Our questions are therefore:

  1. Is applying only the minimum boundary —Scope 1 and Scope 2 emissions of the end user— fully aligned with the GHG Protocol for Category 11?
  2. Should the software instead apply full life-cycle emission factors, including WTT emissions for fuels and upstream electricity emissions?
  3. What approach should consultants recommend to companies: the minimum boundary, the broader life-cycle approach, or a choice between both provided that the methodology is transparently disclosed?

We would be very interested to know how other consultants are handling this issue, particularly where the choice could have a significant impact on the reported emissions from sold products.

2

Hi Carlos,

Thanks for raising this and indeed a valuable question. Apologies for the delay in getting back to you but trust this answer will help for future referene.

Responing in line to the questions

  1. Is the minimum boundary aligned to the GHGP cat. 11?

    1. Yes, the Scope 3 Standard (table 5.4) defines the min. boundary as “The direct use-phase emissions of sold products over their expected lifetime (i.e., the scope 1 and scope 2 emissions of end users that occur from the use of: products that directly consume energy (fuels or electricity) during use; fuels and feedstocks; and GHGs and products that contain or form GHGs that are emitted during use)” The WTT and T&D would fall outside this minimum boundary. Our view is that the “life cycle emissions factors” are general across all categories but does not override the category specific boundary (table 5.4)

  2. Should the software apply full lifecycle emissions?

    1. By default we don’t. An example to explain our rationale:
      For fuel sellers there’s a double-counting risk. A fuel distributor already reports the cradle-to-gate emissions of the fuel it buys in Category 1, and a refiner reports refining in Scope 1. Adding WTT to Category 11 would count those emissions twice in the same inventory. For example, on 10 million litres of diesel, WTT would add roughly 20–25% on top of the combustion emissions, and most of that is already reported elsewhere.

      For manufacturers of energy-using products (boilers, vehicles, appliances), that overlap doesn’t exist. Including upstream energy emissions is a legitimate optional extension, but it isn’t required.

  3. What should consultants recommend?

    • We recommend the minimum boundary as the default. It’s compliant, comparable and avoids double counting.
    • Where upstream energy is significant and not captured elsewhere, a broader approach can be justified if it is:
      • applied consistently across products and years;
      • shown separately, so the minimum-boundary figure stays visible;
      • clearly disclosed in the methodology.
    • Avoid mixing approaches, such as life-cycle factors for fuels but generation-only factors for electricity.
    • If the approach changes, recalculate the base year.

    It’s also worth watching the ongoing GHG Protocol Scope 3 revision, which may bring more clarity on this. Naturally we will also be keeping a close eye on it. I’d be interested to hear how others are handling it too.

3

Thanks Paul for the detailed response. I agree that the minimum boundary provides a defensible basis for the software’s default approach. A few observations may help clarify the remaining question.

1. On the minimum boundary

I agree that Table 5.4 of the Corporate Value Chain (Scope 3) Accounting and Reporting Standard supports using the end user’s Scope 1 and Scope 2 emissions as the minimum boundary.

However, the reference to “life cycle emission factors” on p. 116 of the calculation guidance appears specifically within the method for products that directly consume fuel or electricity during use. It therefore seems more specific than a general recommendation across categories. Is there an official clarification reconciling that wording with the minimum boundary?

2. On life-cycle factors and double counting

The fuel-seller example is explicitly addressed on p. 118, where the guidance specifies combustion-only emissions and explains the risk of double counting upstream emissions within the reporting company’s inventory.

However, this is a separate method from the one for energy-consuming products, such as the diesel trains in the original question. The distinction seems relevant: the guidance requests life-cycle factors for energy-consuming products on p. 116, but combustion-only factors for fuels and feedstocks sold on p. 118.

Also, emissions appearing in another company’s Scope 1 would not, by itself, constitute double counting within the reporting company’s inventory. The relevant concern is whether the same emissions are included more than once within that company’s own inventory. would it?

3. On recommendations to consultants

Keeping the minimum-boundary result visible and reporting any upstream extension separately seems a sensible practical approach, with consistent application and transparent disclosure.

I would nevertheless distinguish between a defensible methodological recommendation and an explicitly confirmed GHG Protocol interpretation of the wording on p. 116.

One small qualification on base-year recalculation: this would be required where the methodological change has a significant impact, in accordance with the company’s established recalculation policy, rather than automatically following every methodological change.

Overall, I think we largely agree on the practical approach. The remaining question is how to interpret the specific request for life-cycle emission factors for manufacturers of energy-consuming products. Has anyone obtained clarification from GHG Protocol on this point?

Many thanks, Paul, for sharing your perspective. Let’s keep in touch!

*For clarity, the references to pp. 116 and 118 below are to the printed page numbers in the GHG Protocol’s Technical Guidance for Calculating Scope 3 Emissions, Chapter 11, “Use of Sold Products”. In the standalone Chapter 11 PDF, these correspond to PDF pages 4 and 6, respectively.
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