What scope 3 is
The GHG Protocol defines scope 3 as all indirect emissions that occur in the value chain of the company, upstream and downstream, and are not included in scope 2. For example: making what you buy, transporting it or using what you sell1.
The 2011 Scope 3 Standard requires companies to account for all scope 3 emissions within the minimum boundary of each category and to disclose and justify any exclusion. An activity expected to weigh significantly in the total should not be excluded either1. For the picture of all three scopes, see carbon footprint.
The same emission can be scope 3 for several companies at once. That is why scope 3 helps each company manage its chain, but it is not added across companies to get a regional total1.
The 15 scope 3 categories
| Category | Direction | What it includes |
|---|---|---|
| 1. Purchased goods and services | Upstream | Extraction, production and transport of what you buy in the year, cradle to gate |
| 2. Capital goods | Upstream | Extraction, production and transport of the machinery, buildings and other capital goods you buy |
| 3. Fuel and energy related activities not in scope 1 or 2 | Upstream | Producing and transporting the fuels and energy you consume, plus transmission and distribution losses |
| 4. Upstream transportation and distribution | Upstream | The freight you hire, inbound and outbound, in vehicles you do not own |
| 5. Waste generated in operations | Upstream | Third party disposal and treatment of the waste from your operations, including recycling |
| 6. Business travel | Upstream | Work trips by your staff in vehicles you do not own |
| 7. Employee commuting | Upstream | Your staff travel between home and work |
| 8. Upstream leased assets | Upstream | Operating the assets you lease that are not in your scopes 1 and 2 |
| 9. Downstream transportation and distribution | Downstream | Transporting, storing and retailing what you sell, when you do not pay for it |
| 10. Processing of sold products | Downstream | What other companies emit processing your intermediate products |
| 11. Use of sold products | Downstream | What the use of your products emits over their lifetime |
| 12. End of life treatment of sold products | Downstream | Disposal and treatment of your products once they are discarded |
| 13. Downstream leased assets | Downstream | Operating the assets you own and lease to others |
| 14. Franchises | Downstream | Operating franchises, reported by the franchisor |
| 15. Investments | Downstream | Operating investments in equity, debt and project finance |
Recycling touches three categories: 1 if you buy material with recycled content, 5 if you send the waste from your operations for recycling and 12 if you sell products that are recycled at the end of their life2.
Category 5: waste generated in operations
Category 5 includes emissions from third party disposal and treatment of the solid waste and wastewater your operations generate in the reporting year. If you treat your waste in facilities you own or control, that goes in your scopes 1 and 22.
It includes all future emissions from the waste generated in the year, such as the methane a landfill will keep emitting. These are the treatments it covers2:
- Landfill disposal, with or without landfill gas used to generate electricity
- Recovery for recycling
- Incineration, with or without energy recovery
- Composting
- Wastewater treatment
Including the transport of waste in third party vehicles is optional. If you include it, it is calculated with the category 4 methods2.
The recycled content method
The same company can buy recycled material and sell recyclable products. If it counted recycling emissions on both sides, it would count them twice. To avoid that, the GHG Protocol recommends the recycled content method: the emissions of the recycling process are allocated to whoever uses the recycled material2.
| Case | Category | What you count |
|---|---|---|
| You buy material with recycled content | 1 (purchased goods and services) or 2 (capital goods) | The recycling emissions, already built into the cradle to gate factor of the material |
| You send waste from your operations for recycling | 5 (waste generated in operations) | Only material recovery, if it is not already in the factor of the recycled material |
| You sell products that are recycled at the end of their life | 12 (end of life treatment of sold products) | The same: material recovery, if it is not already in the factor of the recycled material |
With scrap: you report it in category 5, as waste you sent for recycling. The emissions of preparing and melting it sit with whoever uses the recycled material, that is, the mill, and they reach the buyers of that steel inside its cradle to gate factor.
The GHG Protocol allows other methods, such as the closed loop approximation, when the recycled material has the same properties as the virgin one and returns to the same chain. When it is unclear which method applies or the chain is complex, it recommends the recycled content method to avoid double counting or miscounting2.
What data you need for category 5
The GHG Protocol technical guidance offers three methods. If the company treating your waste gives you its emissions, use the first; if you know which type of waste goes to which treatment, the second; if not, the third2.
| Method | Data you collect | Calculation |
|---|---|---|
| Supplier specific | The scope 1 and 2 emissions of the company treating your waste, allocated to your waste | The sum of the emissions allocated by each provider |
| Waste type specific | Tonnes (or cubic meters) of each waste type and the treatment of each one | Tonnes of each type × factor for that type and that treatment |
| Average data | Total tonnes of waste and the share that goes to each treatment | Tonnes × share of each treatment × average factor of that treatment |
Activity data can come from the invoices of whoever collects your waste, who often charges by treatment method, or from your internal systems. Factors can come from life cycle databases, national inventories, industry associations or the 2006 IPCC Guidelines2. In practice:
- 01
Separate by type
Steel, stainless, copper, aluminum, cardboard, general waste: each type with its treatment.
- 02
Weigh and document
Real tonnes of each type, with the weight document from whoever receives them.
- 03
Record the destination
Recycling, landfill or incineration, with the document that proves it.
- 04
Apply the factor
One per type and per treatment, with its source and year.
- 05
Explain what you leave out
If you exclude any waste, say which one and why1.
How to report recycling without overcounting
- Category 5 only holds what treating your waste emits. Counted this way, sending waste to recycling or to incineration with energy recovery shows up close to zero in your inventory2.
- No negative or avoided emissions in categories 5 and 12. The GHG Protocol asks companies not to report them there1.
- What is avoided goes separately. You can report, separately, recycling emissions compared with the emissions of producing the equivalent virgin material. It is often a negative figure, and it is never mixed into the scope 3 inventory2.
- With evidence. Companies that report avoided emissions should provide data showing the material was collected, recycled and used, and explain the methodology, data sources, system boundary, time period and assumptions2.
How to build that separate figure, with what evidence and what not to claim with it, is in avoided emissions.
What the Bluegreen certificate gives your report
If you sell your scrap through Bluegreen, each lot has a certificate with a folio that anyone can verify online, without an account. It serves two different places in your report:
In your inventory, category 5
The weight of the lot and its destination, recycling at a steel mill, as activity data for your waste. The certificate only counts the weight that arrived: the lower of the origin and destination net weights.
Separately, as avoided emissions
The net CO₂e of the lot: what recycling avoids minus what each haul emitted, using the kilometers from the Carta Porte and 100 g CO₂e per tonne-kilometer from the GLEC Framework for road freight in North America3. It is not subtracted from your inventory.
Yard operations (cutting, baling, cranes) are not measured per lot and are not subtracted; the certificate says so. The current factor set is preliminary, and certificates with preliminary factors are not presented as verified. Bluegreen follows the GHG Protocol and holds no ISO certification. See the methodology and the recycling certificate.
Frequently asked questions
What is scope 3?
All the indirect emissions in your company value chain that are not in scope 2, upstream and downstream, such as making what you buy or using what you sell1.
What are the 15 scope 3 categories?
Upstream: purchased goods and services, capital goods, fuel and energy related activities, transportation and distribution, waste generated in operations, business travel, employee commuting and leased assets. Downstream: transportation and distribution, processing, use and end of life treatment of sold products, leased assets, franchises and investments1.
Which category does the scrap I send for recycling go in?
Category 5, waste generated in operations, which includes recovery for recycling2.
Are the recycling emissions of my scrap mine?
Not under the recycled content method. They are allocated to whoever uses the recycled material; you only count material recovery, if it is not already in the factor of the recycled material2.
Can I subtract the CO₂ that recycling avoids from scope 3?
No. Emissions avoided by recycling are not included in or deducted from scope 3: they are reported separately from scopes 1, 2 and 32.
Do I have to include the transport of my waste?
It is optional in category 5. If you include it, it is calculated with the category 4 methods2.
What if I treat my waste at my own plant?
Then it is not scope 3: treatment in facilities you own or control goes in your scopes 1 and 22.
Sources
Every figure on this page comes from a third party publication. Names and logos belong to their owners and only identify the source; they do not imply endorsement.
- GHG Protocol (WRI and WBCSD)Corporate Value Chain (Scope 3) Accounting and Reporting Standard (tablas 5.1, 5.3 y 5.4, recuadro 5.6, capítulo 6 y sección 9.5) (2011)Open the publication
- GHG Protocol (WRI and WBCSD)Technical Guidance for Calculating Scope 3 Emissions, version 1.0, category 5 (2013)Open the publication
- Smart Freight Centre (GLEC)Global Logistics Emissions Council Framework v3.0, tabla 6: North American road emission intensity values (2023)Open the publication
