Measuring Scope 3 emissions made possible

Covestro earlier this year announced its target to become operationally climate neutral – meaning reducing direct emissions from its own operations (Scope 1) as well as indirect emissions from purchased energy (Scope 2) to net zero by 2035. About 80 percent of the company’s emissions, however, come from other sources of indirect emissions, so called upstream and downstream processes – meaning for example from supply chains, from transport of materials or from the processing of raw materials the company uses in its production.

Covestro is in good company here: This ratio reflects the overall situation for the chemical industry, which is responsible for about 7 percent of global Greenhouse Gas Emissions (GHG), nearly 80 percent of which are in Scope 3.  

Obviously an issue that needed urgent tackling.  

“Scope 3 emissions are indeed a tough nut to crack,” admits Lynette Chung, Chief Sustainability Officer at Covestro. “Let me describe the two most tricky points we have to face. We talk about up- and downstream emissions, means totally different stakeholders, process and production steps involved across all our Business Entities – and this increases the complexity massively. Secondly, there is either no proper data available and, even if there is data, no harmonized way to report or calculate carbon footprints and Corporate Scope 3 emissions for the thousands of different products, materials, production process and involved suppliers. That means that we up to now couldn’t reliably track Scope 3 emissions.”

A new gold standard for Scope 3 emission assessment?

Covestro therefore set out to work on a solution for this challenge. A big step forward has been made with the just published “Product Carbon Footprint” (PCF) guideline by the global chemical sector initiative “Together for Sustainability” (TfS), of which Covestro is one of six founding members. Developing the guideline took three years, which were mostly spend with assessing the status quo, developing an approach for collecting and sharing data and coming to a mutual understanding of the best methods to calculate emissions – plus making it audit-ready, ISO-compliant and accepted by the Greenhouse Gas Protocol. It was also tested by over 50 companies before its release and therefore is published in a ready-to-implement state.

The new TfS Guideline for Product Carbon Footprint [PCF] provides specific calculation instructions for emissions from “cradle-to-gate” for chemical materials. It harmonizes PCF calculation approaches across the industry and is applicable to the vast majority of chemical products. This bridges a gap and is much anticipated: “Product carbon footprint as a sourcing criterion will become as important as cost and availability,” says Dr. Thomas Roemer, Global Head of Procurement at Covestro, who sponsors the Covestro efforts in the workstream. “The PCF Guideline offers clear and standardized instructions on calculating Greenhouse Gas (GHG) emissions for specific chemicals production, e.g. in multi-output-processes and when using raw materials with biogenic content. As the guideline will be open-source it also won’t be limited to the TfS members or the chemical industry either – but can be useful to any industry using chemical materials. A huge benefit that will hopefully ensure standards, transparency and help us at Covestro to even better work towards becoming climate neutral and fully circular.”

One outcome of the use of this guideline by Covestro could be that due to the widely accepted transparency and validity of the method, OEMs could choose a product based on its true carbon footprint – with the aim of Covestro being that the company’s products will be the most attractive to that end on the market. And Covestro’s own procurement can in turn choose volumes of raw materials equally based on their carbon footprint as well.

“A standardized approach is a very important and big step for the chemical industry and Covestro. It makes me confident that we are taking another big step toward climate neutrality here, not least because this is a global initiative by the chemical sector,” says Lynette Chung.

At the same time, this marks an important step in the process of announcing Covestro’s Scope 3 emission targets in 2023. Which can be tracked and traced reliably with the help of the PCF guideline.