Production goods & materials are raw materials, partially and fully formed parts or components that are purchased by the company for use in the manufacturing of goods. This category covers the upstream (i.e., cradle-to-gate) emissions for materials and products purchased by the company as part of their supply chain, e.g. raw materials and products for resale.
In this case, cradle-to-gate includes:
Emission from material sourcing, extraction, transportation to the point of leaving the tier 1 (direct) supplier. Meaning, these emissions occur before the goods are transported to the consumer. The exact lifecycle boundaries depend on the emission factor source, more information can be found here.
In this case cradle-to-gate excludes:
Emissions from the transportation of purchased products from a tier 1 supplier to the reporting company, as these are accounted for in the Cozero category “Purchased logistics”.
Production goods & materials can have different manufacturing methods with varying emission impacts.
Production good/material | Description |
Primary material purchased | Extraction and acquisition of raw materials (e.g. metals and coal which are mined, oil drilled from the ground, rubber tapped from trees), or purchase of raw materials that are then used to produce goods by the reporting company. |
Re-used | Material is re-used or re-purposed in the manufacturing process. |
Closed-loop | A product is used, discarded, captured, and then the component materials are recycled into a new product of similar functionality. It is then itself used, discarded and captured, to be recycled again, continuously cycling the material resource through the supply chain for the same product.
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Open-loop recycling | In this case the material is recycled in an open-loop process. This means that the output product is not the same as the input recycled material (e.g. plastic PET bottles being recycled into material for clothing). As a result, the material is made into a substantially different product with different properties. The output product is often non-recyclable or has degraded recycling capabilities. |
1) How this category aligns with carbon accounting standards
The Cozero category, Production goods & materials is a source of upstream Scope 3 emissions, as defined by the GHG Protocol. All Cozero emissions calculation methodologies follow the requirements for this Scope of emissions accounting.
The GHG Protocol Corporate Standard
The GHG Protocol Corporate Standard
The GHG Protocol Corporate Standard is an internationally-recognized go-to standard for estimating and reporting corporate GHG emissions. GHG emissions are categorized into three ‘Scopes'. For further information see here.
Scope 1 includes direct GHG emissions that originate from sources that are owned or controlled by the reporting company, e.g. generation of electricity, heat and steam, physical or chemical processing, transportation of materials and fugitive emissions. They are the most important source of emissions because they are the direct result of companies’ activities.
Scope 2 encompasses indirect emissions from the generation of purchased or acquired electricity consumed by the reporting company. These emissions are considered to be indirect because they arise as a result of the reporting company’s activities, but they originate from sources that are owned and controlled by external entities.
In turn, these emissions are categorized as Scope 1 for the energy generator that produced the electricity, given that they arise from their owned and controlled resources.
Scope 3 emissions are all indirect emissions (not included in Scope 2) which occur in the value chain of the reporting company. In other words, the emissions that are linked to the company’s operations but are outside of its control. Scope 3 emissions can be categorized into two high-level groups:
Upstream emissions: Indirect emissions related to the procurement of goods and services, starting from the initial sourcing and pre-processing stages. Upstream emissions can be attributed to the materials’ extraction, production and transportation processes before they reach the company.
Downstream emissions: Indirect emissions related to products and services sold by the reporting company, occurring after the products have been sold to the customer or end-user. Downstream emissions relate to activities such as distribution, storage, usage by consumers, and the eventual end-of-life disposal or recycling of the products.
2) Calculation methods
Here are the various calculation methods available in Cozero Log for calculating Scope 3 emissions from Production goods & materials. Users should choose the method that is the most appropriate to the data available to them, to their business goals and the significance of the emissions of the category.
2a. Quantity of goods method
Emissions are calculated by collecting data on the quantity of materials bought during the reporting period and multiplying by the relevant emission factor.
Activity data: quantity of material bought within the reporting period in kg. Cozero Log provides conversion of other units of mass.
Emission factor: Cozero Log provides a default cradle-to-gate emission factor of the production materials per mass of product but users can also enter supplier-specific emission factors.
How to report emissions in Cozero?
Step 1: Select the Log called “Production goods & materials”
Step 2: Select the subcategory (production good) you want to report on
Step 3: Select “Quantity of goods” as calculation method
Step 4: Select the activity data source
Step 5: Enter the amount of materials consumed
Cozero Log will automatically calculate the emissions for the amount of material entered.
2b. Spend method
Emissions are estimated by collecting data on the economic value of production goods and multiplying by the relevant emission factor.
Activity data: amount spent on production goods within the reporting period. The user can select one of the available currencies from the dropdown.
Emission factor: Cozero Log provides a default cradle-to-gate emission factor of the production good per unit of economic value. Entered currencies are converted as needed automatically to match the emission factor.
How to report emissions in Cozero?
Step 1: Select the Log called “Production goods & materials”
Step 2: Select the subcategory (production good) you want to report on
Step 3: Select “Spend” as calculation method
Step 4: Select the activity data source
Step 5: Enter the amount spent on the production good
Cozero Log will automatically calculate the emissions for the spend entered.
2b. Direct emissions input
Users can enter the amount of emissions in CO2 directly in the Log. Make sure of the accuracy of data used in this estimation.
3) Where can I find the relevant data?
Activity Data:
Internal data systems (e.g. bill of materials)
Purchasing records
To find out more about data collection, you can refer to the article about Data Sourcing.
4) Further resources