Emissions may arise from the following transportation and distribution activities throughout the value chain: air, rail, road, sea, inland waterways as well as the storage of sold products in warehouses, distribution centers, and retail facilities.
If the reporting company sells an intermediate product, the company should report emissions from transportation and distribution of this intermediate product between the point of sale by the reporting company and either
(1) the end consumer (the eventual end use of the intermediate product is known) or
(2) business customers (the eventual end use of the intermediate product is unknown).
Note that this category only accounts for emissions from logistics activities which are not paid by the company itself. Outbound transportation and distribution services that are purchased by the reporting company are included in the category “Purchased logistics”.
1) How this category aligns with carbon accounting standards
The Cozero category, Logistics of sold products, is a source of downstream 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 calculation methods available in Cozero Log for calculating Scope 3 emissions from Logistics of sold products. Users should choose the method that is the most appropriate to the available data, their business goals, and the significance of the emissions of the category. Using both mass and distance of transported goods is the most accurate method, while distance data allows the estimation with lower data availability.
Note that the calculation principles for Purchased logistics and Logistics of sold products categories are the same. However, there are often significant differences in data availability, quality, and reliability between services purchased by the company and those purchased by their customers. Due to these differences, Cozero offers distinct calculation methods for each category.
2a. Mass & distance method
Emissions are estimated by collecting data on the total mass and distance of goods transported during the reporting period and multiplying by the relevant emission factor. This method allows users to input the mass and distance in kilometers, or tonne kilometers directly. Alternatively, they can enter the mass and set the origin and destination, in which case Cozero will automatically calculate the distance covered.
This method accounts both the transported weight and distance, which allows companies to target their calculation for their own products and obtain more accurate results. However, obtaining this data can be difficult. Estimates for weights can be built e.g. based on total volume of sales per country or region. Distance data can be obtained by surveying customers on the average distances the products are transported, or by building assumptions per region.
Activity data: Mass and distance of goods transported
Emission factor: Cozero provides a default mass & distance emission factor matching the selected activity data but users can also enter supplier-specific emission factors.
How to report emissions in Cozero?
Step 1: Select the category “Logistics of sold products”
Step 2: Select the subcategory (means of transport) you want to report on
Step 3: Select the applicable “Mass and distance of goods transported” calculation method
Step 4: Select the activity data source
Step 5: Enter the mass and distance (alternatively origin/destination) or tonne kilometers for the means of transport
Cozero Log will automatically calculate the emissions for the mass and distance entered.
2b. Distance method
Emissions are estimated by collecting data on the total distance traveled by sold products during the reporting period and multiplying by the relevant emission factor. This method allows users to input the distance traveled in kilometers directly, or alternatively, they can set the origin and destination, in which case Cozero will automatically calculate the distance covered.
The emission factors for the distance method calculate the emissions based on the vehicle's total laden weight. This method is useful for estimating emissions, especially when the quantity of products transported by customers is unknown. However, this approach may overestimate emissions if the vehicle carries products from multiple companies. Therefore, using other methods, like the more precise mass-distance method, is often a better option.
Activity data: Distance traveled in km
Emission factor: Cozero provides a default distance emission factor matching the selected activity data, but users can also enter supplier-specific emission factors.
How to report emissions in Cozero?
Step 1: Select the category “Logistics of sold products”
Step 2: Select the subcategory (means of transport) you want to report on
Step 3: Select either “Vehicle distance traveled” or “Distance traveled (origin/destination)” as calculation method. Please note that the origin/destination option is unavailable for some means of transport.
Step 4: Select the activity data source
Step 5: Enter the distance traveled or origin/destination for the means of transport
Cozero Log will automatically calculate the emissions for the distance or origin/destination entered.
2c. Storage in Logistics site or Storage in retail
The subcategories “Storage in Logistics site” and “Storage in retail” fall into the Cozero category of Logistics of sold products, relating not to a means of transport, but rather to the storage of sold products in warehouses, distribution centers and retail facilities after the point of sale.
Emissions can be estimated with two methods unique to accounting for emissions from logistics sites and retail locations for sold products:
For storage in logistics site, the data input includes the number of items stored, and weight per product.
For storage in retail, the data input includes the number of days the product is typically stored, the surface area of the storage facility, the total number of items stored, and the average energy consumption of a retail facility per m2.
Please note you can input data as average weights and quantities for many different products if the exact data is not available, or the impact of this category is not estimated to be large. It is also acceptable to build average scenarios to estimate the emissions, or extrapolate based on a small sample data.
How to report emissions from Storage in logistics site in Cozero?
Step 1: Select the category “Logistics of sold products”
Step 2: Select “Storage in logistics site” as a subcategory
Step 3: Select “Storage in warehouse” as calculation method. If you have obtained direct CO2e data from your customers, you can choose to use the method “Direct CO2e entry”.
Step 4: Select the activity data source “Industrial distribution warehouse”
Step 5: Enter the number of items you are accounting for and the (average) weight of these products.
How to report emissions from Storage in retail in Cozero?
Step 1: Select the category “Logistics of sold products”
Step 2: Select “Storage in retail” as a subcategory
Step 3: Select “Storage in retail” as calculation method. If you have obtained direct CO2e data from your customers, you can choose to use the method “Direct CO2e entry”.
Step 4: Enter the following details:
Number of items you are accounting for
The average duration the products spend in retail storage
The surface area of the retail site
The total number of items stored in the facility
The average energy consumption of your storage facility per m2
Cozero Log will automatically calculate the emissions for the data entered.
2f. Direct emissions input
Users can enter the amount of emissions in CO2e directly in the Log. For this data, we recommend you to engage with your customers. As these emissions are the same as your customers’ emissions from Purchased logistics, they might already be able to provide you with the data referring to your products. Make sure you are aware of the limitations in the accuracy of data used in this estimation.
3) Further resources