FEATURE
Reprinted with kind permission from Digital Energy Journal
SCOPE 3 EMISSIONS CHALLENGES BY IAN THOMAS
“S
cope Three” emissions are the emissions associated with the value chain – this includes supply chain provision of goods and services to the disposal of the products a company sells. In the energy industry such services may include the hire of supply boats, drilling rigs and other equipment. It may include the use of energy products, such as oil and gas. Less obvious may be the emissions associated with the generation of renewable sources of energy such as biofuels, electricity and hydrogen. The challenges associated with quantification of Scope Three emissions are considerable. They start with a requirement to identify those emissions which are considered material to the organisation from a list of 15 categories. Industry standard methodologies must be used to ensure figures reported are true, verifiable and free of material errors. From an oil and gas perspective, the 2020 IPIECA guidelines on Scope Three emission reporting focussed on downstream consumption based upon the final product created. But they left gaps around the upstream supply chain
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responsibility that is now very much central to the latest GHG Protocol responsibilities for Scope Three. Measured carefully and reported accurately, Scope Three has the potential to drive innovation sector-wide, improve links and relations with individual groups, and reduce costs through enhanced efficiency. All of these are fundamental to developing the sustainable future we are striving for. Scope Three management is an evolving beast In the US, the Securities and Exchange Commission (SEC) looks set to bring in a mandate for Scope Three emissions to be disclosed for most companies. In the UK, the North Sea Transition Authority, which is overseeing the North Sea Transition Deal, sets out best practice in environmental management within the oil and gas lifecycle. It does this through a series of stewardship ‘expectations’ with the latest additions (11 and 12) solely focusing on net zero and the supply chain. These outline the considerations for reducing greenhouse gas emissions on both the physical environment and society. Expectation 12 references the close collaboration that exists