Decarbonisation Technology - May 2024 Issue

GHG emissions from imported goods

One product

All products

utilities supply and emissions intensity (such as renewable vs fossil fuel-based energy) can significantly influence the environmental impact. Even the dedicated production technologies employed, whether energy-efficient or conventional, play a critical role and can be recognised with scaled LCAs. With this granular information, decisions on actions can be made on a plant-specific basis, leading to the targeted deployment of renewable energies and utilities with lower environmental impact. Such insights empower organisations to efficiently change feedstocks based on their sustainability footprint and strategically prioritise technology projects with the greatest potential for positive environmental impact. Therefore, detailed transparency on a product level becomes a prerequisite for effective business steering. Beyond internal benefits, product-level transparency is becoming increasingly crucial for regulatory compliance. Initiatives like the Carbon Border Adjustment Mechanism (CBAM) necessitate this detailed data. Under CBAM, companies importing goods into regulated zones from regions with less stringent environmental policies may face potential cost adjustments based on the embedded carbon of their products imported into the EU. This highlights the importance of accurate product- level environmental data for both reporting and compliance within these frameworks. Additionally, the chemical industry faces mounting pressure from its customers to provide extensive product environmental reports and develop products with a lower environmental impact. For many industries, the chemicals they purchase and use are a major source of their upstream Scope 3 emissions (see Table 1 ). This Embedded or embodied carbon emissions refer to the GHG emissions generated during the production and transportation of imported goods. Although the definition differs slightly from conventional product carbon footprints, the general approach is the same. Thus, scalable LCAs can also be leveraged to derive the embedded carbon information required for CBAM based on primary data.

Averages

Actuals

Harmonised LCA approach

Discretionary choices

Figure 2 Differences between conventional LCAs and LCAs at scale

accuracy, reliability, and transparency required to achieve significant progress towards sustainability goals (see Figure 2 ). In contrast, LCAs at scale provide granular transparency on product level for each intermediate and marketed product within a company’s global portfolio across all environmental impact categories in line with prevailing industry norms and standards (TfS PCF Guideline and ISO 14040/44/67). This involves conducting detailed analyses of every stage of the production process, from raw material extraction to final product distribution to uncover hidden environmental impacts and identify areas for improvement. This level of transparency not only enhances environmental performance but also fosters accountability and drives continuous improvement throughout the value chain. For example, by having detailed information on product level, regional or cluster-specific differences for one and the same intermediate or sales product can be recognised. The same final product, depending on its production location, might utilise diverse feedstocks with contrasting footprints (such as recycled vs virgin materials). Additionally, regional variations in

Scope

Definition

Scope 1 Direct emissions from operations owned or controlled by the reporting company. Scope 2 Indirect emissions from the generation of purchased or acquired energy such as electricity, steam, heating, or cooling consumed by the reporting company. Scope 3 All other indirect emissions that occur in the value chain of the reporting company, including upstream and downstream emissions.

Table 1 Definitions of corporate emissions according to GHG Protocol