Category 10: Processing of sold products
This category includes emissions from intermediate products that are sold by the reporting company to other third parties e.g manufacturers for further processing before they are sold to the final consumer. These intermediate products require further processing, transformation, or inclusion in other products before use by the end consumer. This category involves all processing steps through to the production of the final finished product.
A reporting company’s scope 3 emissions from processing of sold intermediate products include scope 1 and scope 2 emissions of downstream value chain partners (e.g., manufacturers).
Emissions from this category can be calculated using either the site-specific method or the average-data method.
The site-specific method involves determining the amount of fuel and electricity consumed, and waste generated from processing of sold intermediate items and applying the appropriate emission factors.
The average-data method involves estimating emissions for processing of these items using average secondary data.
The decision tree below can act as a guide to determine which method to use.
Method 2: Site-specific
To calculate emissions using this method, companies should use either relevant activity data (e.g. fuel use, electricity use, refrigerant use, and waste) and emission factors for each downstream process or GHG emissions data for each downstream process calculated by downstream value chain partners.
In a case where the downstream processes involve other intermediate items not provided by the company, emissions should be allocated between these different products.
The activity data needed includes:
- Types and quantities of intermediate goods sold by the reporting company.
- Either site-specific GHG emissions data provided by downstream value chain partners or site-specific activity data from downstream processes. This includes:
- The quantities of energy (both fuel and electricity) consumed in processes.
- The mass of waste generated in the processes.
- Where applicable, the activity data related to non-combustion emissions i.e. industrial process or fugitive emissions.
This data can be obtained from internal IT systems, utility bills, purchase receipts and meter readings.
If site-specific data is collected, the emission factors to be obtained include:
- Emission factors for fuels and electricity.
- Emission factors for waste outputs.
- Emissions factors related to non-combustion emissions (if applicable).
This data can either be obtained from:
- The GHG Protocol website
- Industry associations
- Company or manufacturer developed emission factors
The formula for calculating emissions using the site-specific method is as described below:
Method 3: Average-data
When it’s not possible to collect data from downstream value chain partners, the average-data method should be used. This method involves collecting data on the type of downstream processes involved in transforming or processing sold intermediate products into final products, and applying relevant industry average emission factors to determine the emissions.
Similar to the site-specific method, if several intermediate goods (including those sold by the company) are used to produce a final product, emissions should be allocated to all these goods.
For each type of intermediate product sold, companies should collect data on the processes involved in transforming or processing these products into a usable state, and the information needed for allocating emissions e.g. mass, economic value, etc. This data can be sourced from purchasing records, internal data systems, or industry-average data from associations or databases.
Companies should also collect average emission factors for processing stages required to transform the sold intermediate product into a final product, expressed in units of emissions per unit of product e.g. kg CO2/kg of final product. Emission factors can be sourced from life cycle databases, the GHG Protocol website, companies or manufacturers, or industry associations.
The following formula should be used to calculate emissions using the average-data method.
An example of how emissions from processing of sold products using this method is shown below.
