Product Carbon Footprints: A key tool to decarbonisation

To help measure and assess carbon emissions, the GHG protocol categorises emissions into Scope 1, Scope 2, and Scope 3 (Figure 1). Scope 1 emissions are direct GHG emissions from sources owned or controlled by the reporting entity e.g. emissions from burning fossil fuels such as natural gas for heat or steam. Scope 2 emissions are indirect GHG emissions that result from the generation of purchased energy or steam e.g. the emissions from producing purchased electricity. Scope 3 emissions are all other indirect emissions that occur in the value chain of the reporting entity and are further divided into upstream and downstream emissions. Upstream Scope 3 emissions in the chemical industry usually result from the extraction and refining of raw materials and their transport, whilst downstream emissions result from the product processing, use, disposal, and end-of-life.



Figure 1. Overview of GHG protocol scopes and emissions across the value chain ¹

In an ideal world, the emissions of every activity would be measured directly at their point of release, but this is not realistic or practical. As a result, most companies and carbon accounting platforms rely on databases of emission factors to translate an activity into its associated emissions. These emission factors can be based on economic factors or increasingly are sourced from life cycle analysis assessments (LCAs) which have studied the activity and analysed the average emissions associated with it, to produce an emission factor (the average kg CO2e emitted per unit of activity). A company’s use of an activity can then be multiplied by the relevant emission factor to calculate an estimate of the total emissions associated with that activity.

Accounting for Scope 3 emissions is a significant challenge because the activities involved lie outside of your organisation (and often geographical region). As such, the visibility of processes, raw materials, and energy use is limited. Where a relevant industry LCA has been done for the product, this average can be used to estimate the associated emissions. However, frequently robust LCAs are not available and here companies resort to estimations using economic or spend-based factors. Unlike spend-based factors, industry average LCA data provides some insights into carbon ‘hotspots’ to support the development of decarbonisation action plans. However, neither methodology allows the impacts of supplier decarbonisation actions to be tracked. For this, supplier collaboration and supplier data are required, and this is where product carbon footprints come in.

Product carbon footprints

A product carbon footprint (PCF) represents the total amount of greenhouse gasses released during the lifecycle of a specific product. Generally, product carbon footprints are calculated over what is termed cradle-to-gate i.e. the emissions released to the atmosphere from the production (or extraction) and processing of raw materials to the point that it leaves the factory gate. If a supplier can provide you with a PCF, calculating your emissions associated with that purchased material should be easy. However, not all PCFs are the same.

Figure 2 taken from the GHG protocol Scope 3 Calculation Guidance shows how supplier-provided data is often based on varying levels of spend or average data with more accurate data sets often being much more complex.

Figure 2. GHG protocol illustration of data types used for different calculation methods of scope 3 emissions ² 

PCFs that rely entirely on spend-based and averaged data will represent the actual associated emissions more poorly and can less reliably inform decarbonisation strategy. PCFs calculated using only spend-based methods provide an overview of approximate total emissions but may leave you with a decarbonisation strategy of spending less.

However, PCF data which is based entirely on primary data would require visibility of actual energy use, energy source and transportation modes for every stage of every material used in the supply chain. This is rarely practical or achievable.

The hybrid methodology allows for a compromise, sufficient primary data, and an understanding of the complex supply chain to have confidence in identifying carbon hotspots and tracking the impact of actions. It's pragmatic to also incorporate some spend-based and average data where required.

Beyond the quality and accuracy of the data used to calculate PCFs, the scope and methodology used can also vary. The GHG protocol guidelines are widely accepted and help to define what activities should be included in PCF calculations. However, the categories of emissions that an entity can (or chooses to) include in its PCF calculations may vary.

Together for Sustainability Product Carbon Footprint (PCF) guidelines

Currently, there is no one standard methodology and best practice when calculating PCFs, and the scope, methodology, and data quality can vary. Until we reach the point where all companies are aligned and there is little to no variance in how PCFs are being calculated, it is not possible to reliably and accurately compare PCFs from different sources. Greater levels of granularity and accuracy can result in a PCF being higher as more contributors are accounted for more accurately.

Together for Sustainability (TfS) has produced guidelines for calculating PCFs that are tailored to the chemical industry seeking to address this issue. These guidelines seek to align how PCFs are calculated and presented and align with GHG protocol guidance and relevant ISO standards. Importantly,

TfS guidelines require the scope, methodology, and data quality to be outlined in PCF statements. This visibility is vital if trying to compare PCFs more fairly. There is still a possibility for variation in any emission reporting guidelines and comparing PCFs from different sources will always involve a level of uncertainty, but as guidelines are adopted more widely and the area continues to mature, alignment should continue to improve.

Key takeaways

PCFs are an important tool to enable targeted and effective decarbonisation

• Accounting for Scope 3 emissions is a significant challenge because the activities involved lie outside your organisation (and often geographical region).
• Supplier-specific data is needed to accurately estimate scope 3 emissions, identify carbon intensity hotspots, and track the impact of supply chain decarbonisation actions.
• The more primary and supplier-specific data used in a PCF calculation, the more accurate the number is likely to be.

PCFs are not easily comparable and the lowest is not always the best

• It is important to understand a PCF's method, scope, and data quality before assuming it accurately represents all the associated emissions.
• A cradle-to-gate PCF only accounts for upstream emissions. Any in-use benefits that reduce emissions downstream should also be considered. Formulation components can optimise a product’s manufacture, storage, transport, application, or performance, all of which can affect a final product's sustainability beyond its components' total PCF.
• Low carbon does not always mean more sustainable. More areas of environmental impact should be assessed, weighted, and compared (such as in a full LCA) to compare the sustainability profile of different materials comprehensively.

PCFs are not set numbers

• If PCFs are based on actual production data, they will always be retrospective and represent a given period (usually a calendar year or rolling average).
• PCFs provide a snapshot of the associated emissions for a given period but will change as data quality improves, manufacturing practices change, and decarbonisation actions are taken.

Source 1 & 2: https://ghgprotocol.org/sites/default/files/2023-03/Scope3_Calculation_Guidance_0%5B1%5D.pdf