Understanding Scope-Based Greenhouse Gas Emissions

Introduction

Carbon neutrality refers to the process of minimizing greenhouse gas emissions and their sources from human activities, while removing already emitted greenhouse gases through methods such as forest absorption or carbon capture utilization and storage (CCUS).

This balancing act aims to achieve a net-zero greenhouse gas emission state. But what exactly are greenhouse gases?

Types of Greenhouse Gases

Greenhouse gases (GHGs) consist of seven different compounds: CO₂ (carbon dioxide), CH₄ (methane), N₂O (nitrous oxide), HFCs (hydrofluorocarbons), PFCs (perfluorocarbons), SF₆ (sulfur hexafluoride), and NF₃ (nitrogen trifluoride).

Six of these greenhouse gases (excluding CO₂) are converted to CO₂ equivalents using their Global Warming Potential (GWP) values.

CO₂ equivalent (CO₂e or CO₂eq) is a standard unit for measuring carbon footprints, expressing the impact of different greenhouse gases in terms of the amount of CO₂ that would create the same warming effect.

The CO₂ equivalent values for greenhouse gases, derived from the IPCC Fifth Assessment Report (AR5), are as follows:

Name	GWP value (100-year time horizon)	GHG Emissions
CO₂	1	1 kgCO₂e
CH₄	28	28 kgCO₂e
N₂O	265	265 kgCO₂e
HFCs	4~12,400	4~12,400 kgCO₂e
PFCs	6,630~17,400	6,630~17,400 kgCO₂e
SF₆	23,500	23,500 kgCO₂e
NF₃	16,100	16,100 kgCO₂e

Understanding Scope Emissions (GHG Protocol)

The Greenhouse Gas Protocol Corporate Standard classifies a company’s GHG emissions into three primary ‘scopes’:

Scope 1: Direct GHG Emissions

These are emissions from sources owned or controlled by the company. According to the GHG Protocol, According to the GHG Protocol, they can be classified into four main categories:

Scope 2: Indirect GHG Emissions

These emissions result from the consumption of purchased electricity and steam. For electricity, calculations can be performed using two different methods:

	Market-Based Method	Location-Based Method
Definition	Quantitative assessment based on GHG emissions from specific power plants from which the company contractually purchases electricity (reflecting emissions from intentionally chosen power sources—PPA, REC, etc.)	Quantitative assessment based on average energy production emission factors for a geographic location (region, sub-national, or national boundaries), reflecting the average emission intensity of the grid at the time of energy consumption
Allocation Method	Emission factors derived from GHG emissions specified in contractual instruments that meet Scope 2 quality criteria	Emission factors representing average GHG emissions from energy production within a specific geographic area and defined period
Application	Applicable to operations in markets providing differentiated electricity choices or supplier-specific data	Applicable to all grids
Allocation Pathway	Contract information and billing flow	Underlying energy flows in the grid

Scope 3: Other Indirect GHG Emissions

These emissions occur from resources not directly owned or controlled by the organization, such as supply chain activities, transportation, and product use/disposal.

Recent ESG regulations (Corporate Sustainability Reporting Directive, Corporate Sustainability Due Diligence Directive, and Eco-design for Sustainable Products Regulation) are mandating the disclosure of Scope 3 emissions in ESG reports.

Scope 3 emissions are divided into upstream and downstream categories, comprising a total of 15 distinct categories.

Our research team has recently published the paper (iScience, 2025) that consider not only Scope 1 and 2 but also several categories of Scope 3 in life cycle assessment results, which I recommend reviewing for those interested.

What are Scope 4 and 5 Emissions?

Scope 4: Avoided Emissions

Scope 4 emissions refer to greenhouse gas emissions that are prevented or avoided through the use of a company’s products or services.

Based on current industry understanding, Scope 4 represents positive environmental impacts that would not be captured in traditional greenhouse gas accounting frameworks.

According to the World Resources Institute, which introduced this concept in 2013, Scope 4 emissions are defined as “emission reductions that occur outside of a product’s life cycle or value chain but as a direct result of using that product.”

These avoided emissions fall outside the traditional boundaries of Scopes 1, 2, and 3, focusing instead on the positive climate contributions that companies can make.

Scope 4 emissions can be categorized into four main types:

• Emission Prevention (Avoided Emissions): These are emission reductions occurring outside a company’s value chain that result from using its products or services. For example, teleconferencing services help avoid emissions from travel when employees work remotely instead of commuting to offices or traveling to meetings.
• Design-Based Savings (Facilitated Emissions): These are emission reductions achieved through innovative design or engineering decisions. For instance, an architectural firm that designs buildings with energy-efficient features helps clients reduce their operational carbon footprint.
• AAdvisory Impact (Advised Emissions): These represent how professional services can indirectly reduce emissions through consultation and guidance. For example, environmental consultants helping clients implement more sustainable practices or legal experts facilitating renewable energy project development.
• Market Influence (Advertised Emissions): These reflect how marketing and promotional activities can shift consumer behavior toward lower-carbon choices, such as campaigns that increase adoption of energy-efficient products.

Scope 5: Additional Emissions

Scope 5 represents emissions caused by a company’s actions or products that exceed emissions that would have occurred without those actions—essentially highlighting the negative climate impacts of certain business decisions that traditional scopes might not fully capture.

As the conceptual opposite of Scope 4 (avoided emissions), Scope 5 includes emissions from products or practices that generate significantly higher emissions than comparable alternatives.

Scope 5 can be understood as addressing two main areas:

1. Product-Related Responsibility: This covers emissions from products that are significantly less efficient or have higher carbon footprints than available alternatives in the market. Examples include:

• Manufacturing appliances with poor energy efficiency when better technology is readily available
• Producing items deliberately designed with short lifespans or that cannot be repaired, leading to premature replacement and additional manufacturing emissions
• Selecting high-emission materials when lower-carbon alternatives would serve the same purpose

2. Policy Influence Responsibility: This encompasses emissions resulting from actions taken to impede climate progress or maintain high-carbon business models, including:

• Corporate lobbying efforts that delay or weaken environmental regulations
• Financial support for organizations that spread climate misinformation
• Strategic efforts to maintain consumer dependence on carbon-intensive products

Conclusion

The various scope frameworks for measuring and reporting greenhouse gas emissions play a crucial role in helping businesses and organizations systematically understand and manage their environmental impact.

While Scopes 1, 2, and 3 are already widely accepted, Scopes 4 and 5 are emerging as new concepts for a more comprehensive understanding of corporate environmental impacts.

However, for these diverse scope categories and measurement methodologies to be effectively implemented across various industry sectors, simpler and more intuitive guidelines are necessary.

Many companies, especially small and medium-sized enterprises or organizations unfamiliar with environmental reporting, may struggle to understand and apply these complex classification systems.

Therefore, to develop effective strategies for reducing carbon emissions, simplified approaches and educational materials that maintain technical accuracy while being more accessible to a broader range of organizations and individuals need to be developed.

This would enable more stakeholders to participate in climate change response and ultimately contribute to achieving global carbon neutrality goals.

The continuous development and improvement of scope-based emission frameworks will help us measure and manage our carbon footprint more effectively, representing an important step toward a sustainable future.