A significant part of our work is analysing our client’s emissions and developing carbon footprints. With more and more attention being put on value chain emissions, embodied emissions are fast becoming a focal point.
However, there is much confusion about what embodied emissions are and how to measure them, so we thought it would be a good idea to publish our clients’ most frequently asked questions and our answers.
What are embodied emissions?
Embodied emissions are all greenhouse gas emissions that are released as part of making a product or service ready for your consumption or use.
Imagine buying a car. Let’s take two key components of a vehicle, metals and plastics. The raw minerals have to be mined and processed to form the metal and transported to the factory where the car is produced. Similarly, plastic is made from oil, which has to be extracted, refined, processed into plastic and transported to the factory for assembly.
The car is made from these and other components and shipped to distribution centres, from where it is transported to the point of sale. All along the way, greenhouse gas emissions are being produced, from extracting materials, manufacturing, assembly, transport and retail. This means that products and services you buy come with an associated carbon footprint. The more greenhouse gases that are released to produce the good or service, and get it to you, the more embodied emissions it contains.
Is there a difference between embodied and embedded emissions?
Typically, these two terms are used interchangeably.
What is the difference between operational and embodied emissions?
Operational emissions are released when you are using a product or a service. If you use a natural gas boiler to heat water, burning the gas causes the release of greenhouse gas emissions. If you drive a car with an internal combustion engine, greenhouse gases are similarly released. If you operate a building, you consume electricity, which in most cases causes the release of emissions at the power plants that produce the electricity.
This contrasts with embodied emissions, which are released before you even start using or consuming a product or service. If you construct a building, greenhouse gases were emitted during the production and shipping of materials such as cement, steel and glass. When you buy those products, you also ‘buy’ the associated greenhouse gas emissions (which in the absence of any carbon price means no one has to pay for these emissions).
In most cases, organisations focus on operational emissions when developing a greenhouse gas inventory, but climate action leaders also factor in embodied emissions in goods and services they buy.
Who in the supply chain accounts for emissions – our suppliers or their suppliers, or us?
Scope 3, or supply chain emissions are, by definition, the direct emissions of another organisation, which means that your scope 3 emissions are someone else’s scope 1 and scope 2 emissions.
If everyone in your supply chain accounted for (and balanced) their scope 1 and scope 2 emissions, you wouldn’t need to address your scope 3 emissions. However, it will be a while yet before everyone accounts for their greenhouse gase emissions, so many leading organisations are electing to take responsibility for their most significant scope 3 emissions themselves, rather than wait for this to occur.
If it happens that both you and your upstream suppliers are accounting for emissions, then both you and your suppliers can work on reducing these emissions, with each of you having different abatement levers available.
There are many advantages of developing a supply chain greenhouse gas inventory because you will better understand your overall emissions profile, including from upstream and downstream activities. Understanding your scope 3 emissions can help you plan for potential carbon price regulations and guide your procurement decisions and product design. It also allows you to communicate to your stakeholders the potential impacts of these emissions and your planned actions to reduce your greenhouse gas emissions and risks.
If both our suppliers and our company account for emissions, isn’t this double counting?
Double counting is an inherent part of scope 3 accounting. For instance, if a steel producer accounts for natural gas consumption under their scope 1 and for electricity consumption under their scope 2 – you would also account for the same emissions attributable to you, but under your scope 3. If the steel producer offsets emissions relating to their product, your scope 3 emissions from using their product will be zero.
The only thing you must be mindful of when it comes to double-counting is that you don’t double-count the same emission between companies within the same scope. The GHG Protocol carefully defines scopes 1 and 2 to ensure that two or more companies will not account for emissions in the same scope. I recommend you follow the rules of the GHG Protocol to ensure you are not double-counting the same emission or emission reduction.
How can I measure embodied emissions?
There are many ways to calculate embodied emissions, with trade-offs between accuracy and ease of calculation.
In an ideal world, everyone accounts for their emissions, and so accounting for your embodied emissions of your scope 3 sources would be an easy exercise. Imagine you are using environmentally friendly paper for printing your organisation’s magazine. If your paper supplier has determined the carbon footprint of their product, you could easily account for the embedded emissions in that paper.
However, you may be procuring tens of thousands of individual products and services. Only a fraction of those suppliers will be able to provide you with information about the embedded emissions in their products and services. And engaging with each individual supplier or looking up supplier-specific greenhouse gas information will be too time-consuming and costly, so you need to find a way to estimate embedded emissions.
Going back to the example of paper. If you don’t know the embedded emissions of your paper, you will need to apply more generic emission factors that translate from your activity data to associated carbon emissions. When it comes to activity data, you can use the weight of the paper, or you can just use its cost. Using the weight of the paper may give you more accurate results in terms of carbon emissions, but it is a bit harder to calculate the weight of the paper, as opposed to just using the expenditure.
What I’ve illustrated here with paper is the same for other products and services you buy. Several software solutions and publicly available data sources exist that translate from activity data or expenditure to associated emissions. Some of these translations may apply global data or data from another region or country that has done this analysis. If you are looking to become carbon neutral in Australia, you can use emission factors provided by Climate Active.
When you start out with accounting for embedded emissions, your data collection processes and your methods may not be very sophisticated. However, it’s important that you start somewhere. You can then work on making your carbon footprint calculation processes more rigorous each time you update your scope 3 carbon footprint. Initially, you may start accounting for embedded emissions relying on relatively low-accuracy data such as expenditure. However, over time, you can improve data quality, perhaps focusing on your biggest sources of emissions and your tier 1 suppliers.
Why do I have to account for professional services that I buy?
When you buy the services of a company, your supplier is most likely running an office and might travel to your place of business, all of which causes greenhouse emissions. By accounting for these emission sources, you are taking responsibility for these emissions. You can work on a plan to reduce these emissions, such as by reducing travel and switching to virtual meetings or by engaging your suppliers to encourage them to procure renewable energy, use energy-efficient vehicles or become carbon neutral certified, potentially under a program such as Climate Active.
If your professional service providers are certified carbon neutral, then their input into your organisation is carbon neutral, meaning that your carbon footprint reduces.
Given that most of the professional services firms we engage are local, does this improve the associated carbon footprint?
You would only be able to demonstrate emissions reduction if you work with your professional service providers to obtain their individual carbon footprint. Assuming that this is probably not the case and that you are most likely translating from expenditure to emissions, you won’t be able to reflect the fact that they are local in your emissions inventory at this time.
Why do I have to account for the food that I buy?
Food accounts for around a quarter of all supply chain emissions globally. Most emissions from food come from deforestation and agriculture. Freight and food manufacturing cause fewer emissions by comparison.
So, given that food production causes so many emissions, it’s considered good practice to include this in your greenhouse gas inventory.
What products and services have the most embodied emissions?
Eight supply chains account for more than half of all global greenhouse gas emissions. Food is one of the most carbon-intensive products. Construction has the next-biggest carbon footprint, at 10% of global emissions, followed by fashion, fast-moving consumer goods (FMCG), electronics, automotive production, professional services, and freight.
Raw material inputs from land use and heavy industries (including agriculture in the food supply chain, cement in construction, plastics in FMCG, and metals in automotive production) drive the majority of emissions.
What construction materials contain the most embedded emissions? Which should I focus on in my data collection?
Our clients often enquire about the carbon impact of their capital works projects. Emissions are determined both by the energy requirements of the operations of a new asset (operational emissions) and the embedded emissions of construction inputs, such as steel or cement.
Due to the carbon-intensive material manufacturing processes and the use of fossil fuels before your construction materials even arrive at your building site, embodied emissions can make up a large part of the carbon footprint of an asset. And once a facility is built, nothing more can be done about embedded emissions.
Given that building new assets requires many different materials, our clients ask what input materials they should put the greatest emphasis on in terms of data collection and reduction efforts.
The most significant embodied emissions come from aluminium, cement, plastic, steel, paint and glass, so you should focus your data collection efforts on these input materials in the first instance, balanced with assessing quantities of these materials in your project. So if you are only using a little bit of aluminium, for example, it may not be relevant to focus on this material over others such as steel and concrete.
Where can you get help?
100% Renewables are experts in helping organisations develop their carbon footprint and emissions reduction strategies. If you need help with your Climate Action Strategy, please contact Barbara or Patrick.
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