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Chemicals sector gets new Scope 3 reporting guidelines

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A network of global chemical companies including Henkel, Merck, BASF and Bayer called  Together for Sustainability (TfS), has launched a new guideline to understand Scope 3 emissions in the chemical sector.

  • New chemicals Scope 3 emissions guidelines will support understanding the complex emissions analysis of purchased goods.
  • The Guideline can be used by both corporations and suppliers to identify, track and reduce Scope 3 upstream emissions. 
  • The Guideline will be applicable across industries; it will be open source and useful for other industries using chemical materials

TfS has published its open-source PCF Guideline, a new global guidance for calculating Product Carbon Footprints (PCFs) in the chemical industry and beyond.

Understanding chemical emissions is critical to a range of supply chains

Calculating Scope 3 emissions is particularly challenging in the chemicals industry, due to the complexity of chemical production. It involves thousands of processes, products and specific technologies. Yet given its integral role within many supply chains, a standardised approach to quantifying emissions is a necessity for many industries.

The $4.6 trillion chemical industry is integral to sectors ranging from aerospace to automotive and is responsible for a high level of global emissions, 77% of which are in Scope 3 (i.e. from supply chains).

Without a standardised way of understanding chemicals related emissions, the complexity of the supply chain can be hard to assess. An agreement on how to measure carbon footprints from the many different types of chemical products across a range of complex supply chains enables acceleration of progress in climate action.

Why the TfS is publishing guidelines now

The new Guideline is being published at a critical time as companies face increasing pressure to reduce emissions in line with the Paris Agreement goals, set corporate sustainability targets and meet growing customer demands for transparency.

Bertrand Conquéret, TfS President, President of Global Supply Chain & Chief Procurement Officer at Henkel, said: “As the TfS Guideline is available as open-source data, TfS aims to drive change beyond the chemical industry, providing the foundation for other industries to work on carbon reductions.” This echoes the widening understanding that true decarbonisation is going to require collaboration and cross-sectoral solutions.

Prof. Dr. Peter Saling, Director Sustainability methods at BASF and lead of the TfS Guideline Work Package added, “It is a first-of-its-kind resource for the industry, drawing on commonly used international standards and guidelines – such as ISO, the GHG Protocol and the Pathfinder Framework (PACT powered by WBCSD) – while offering the specificity needed for the chemical industry.”

Why does a PCF for chemicals matter?

Prior to this, chemical industry has lacked a common approach to calculating its Product Carbon Footprints. The availability of PCF data is limited, and calculations are often not directly comparable. The new PCF bridges this gap, offering a harmonised way to generate and share information on the emissions arising from chemical supply chains.

According to the TfS, PCF calculations provide the best product-level emissions transparency for the identification, tracking and reduction of Scope 3 GHG emissions. Furthermore, they enable companies and suppliers to work on the reduction of their emissions, which ultimately will improve the industry’s overall carbon footprint.

New PCF addresses complexity of chemicals supply chain

The new PCF (product carbon footprint) Guideline is an exhaustive guide that offers a harmonised approach for the chemical industry and its supply chain to use for chemicals from citric acid to chlorine.

It provides specific calculation instructions for emissions from “cradle-to-gate” for chemical materials. At the same time, it harmonises PCF calculation approaches across the industry and is applicable to the vast majority of chemical products.

In the future, this will allow consumers and the wider market to directly compare and assess the climate impact of products.

For example, citric acid is one of many components found in household cleaners. However, estimating the PCF for citric acid has many challenges, from comparing biobased materials to calculating allocation schemes and varying uses of electricity.

The PCF Guideline offers clear instructions on calculating Greenhouse Gas (GHG) emissions for specific chemicals production, e.g. citric acid production. It specifies, for example, how to assess the use of grid electricity or renewable energy.

The detailed new guideline provides producers of chemical materials (in this case citric acid) and their suppliers with a step-by-step assessment approach addressing important aspects of the chemicals industry.

While created initially to meet the needs of chemical corporations and their suppliers, the TfS Guideline can be used as a calculation guideline and drop-in solution in any other global industry using chemical products. To ensure a harmonised, standardised and widespread use, TfS has therefore decided to publish the Guideline as open source.

Background to the new chemicals PCF

TfS members drew upon expertise in GHG accounting, as well as the chemical supply chain, and the new guideline is the culmination of a workstream dedicated to finding a solution to the Scope 3 problem, implementing meaningful PCF information. The Guideline has been published as open source with the ambition that it may be used in other industries too.

TfS worked alongside global NGOs, corporate sustainability experts, chemical industry experts and organisations such as the World Economic Forum (WEF), and the World Business Council for Sustainable Development (WBCSD) to ensure global best practice for emissions accounting.

Given the urgent need for a harmonised PCF calculation approach within the chemical industry, the first edition of the PCF Guideline focuses exclusively on prescribing the specifications for supplier PCF calculations. Four additional chapters including reporting principles and guidance on Scope 3.1 calculation on corporate level will be published in November 2022.

Thomas Udesen, CPO Bayer and TfS Steering Committee member, said:“The new Guideline will be invaluable downstream to the customer-facing point of the chemicals sector; it means producers of goods containing chemicals and ultimately end-users can make better and more sustainable choices.

“By creating a chemical industry-specific guideline, TfS is empowering suppliers and corporations to easily produce quality carbon footprint data for the first time. With the ability to effectively calculate PCFs and more accurately measure Scope 3 emissions, the sector will be able to achieve tremendous climate ambitions whilst reducing exposure to climate risk.”

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