Scope 1, 2, and 3 Emissions in Logistics and Freight

The GHG Protocol Framework

The three-scope model originates from the GHG Protocol Corporate Accounting and Reporting Standard, which serves as the foundation for both the GLEC Framework and the EU's CSRD reporting requirements. The scopes define where in the value chain an emission occurs — and who is responsible for reporting it.

Freight transportation contributes approximately 8% of global GHG emissions. For industrial and commercial companies, logistics is consistently one of the largest and most material Scope 3 categories.

The Three Scopes

Scope 1 — Direct Emissions

Emissions from assets owned or controlled by the reporting company.

In logistics:

• Combustion of fuel in company-owned vehicles (trucks, ships, aircraft, locomotives)
• Stationary equipment in owned warehouses (generators, heaters, forklifts)
• Refrigerant leakage from owned temperature-controlled assets

Scope 2 — Energy Indirect Emissions

Emissions from the generation of purchased energy used by the company.

In logistics:

• Electricity for charging owned electric vehicle (EV) fleets
• Electricity and heat for owned warehouses, distribution centres, and terminal equipment

Scope 3 — Other Indirect Emissions

All other indirect emissions across the company's value chain — both upstream (suppliers) and downstream (customers). For most industrial companies, this is the largest category by far, and transport-related emissions represent a significant share of it.

Shipper vs. Carrier: Who Reports What

The same physical transport activity appears in different scopes depending on the reporting company's position in the supply chain.

Key implication: A shipper buying freight services from a carrier has those transport emissions entirely in its own Scope 3 — even though the carrier's trucks are Scope 1 for the carrier. The same CO₂ molecule is both a carrier's Scope 1 and a shipper's Scope 3.

Scope 3 Categories 4 and 9 — The Logistics Categories

Under the GHG Protocol Corporate Value Chain (Scope 3) Standard, freight emissions for industrial companies fall primarily into two categories.

Category 4: Upstream Transportation and Distribution

Definition: WTW emissions from outsourced logistics services used to move products:

• From Tier 1 suppliers to the reporting company's facilities
• Between the company's own facilities (factory to warehouse)

Who reports: The company that pays for the freight service bringing materials in. For a manufacturer, inbound raw material transport falls here.

Category 9: Downstream Transportation and Distribution

Definition: WTW emissions from the transportation and distribution of products from the reporting company to the end customer.

Who reports: Typically tracks logistics services paid for by the customer or those occurring further downstream in the value chain after the company's point of sale.

Practical note: If the reporting company pays for outbound transport, it is technically Category 4; Category 9 specifically captures downstream movement the company does not directly control or pay for.

Why These Categories Are Material

For most industrial and commercial companies:

1. Scale — Global freight is an 8% contributor to global GHG emissions; for individual companies in manufacturing, retail, or food, logistics can represent 30–60% of total Scope 3
2. Supply chain reliance — Multinationals depend on complex, multi-modal chains spanning multiple continents and dozens of subcontractors
3. Limited direct control — Because these operations are subcontracted, companies have less leverage than over their own facilities — making transparent data from logistics partners essential for both reporting and reduction
4. Double-materiality — Regulatory pressure (carbon taxes, fuel standards) and physical risk (route disruptions, fuel price volatility) make transport emissions financially material, not just environmentally significant

CSRD and ESRS E1 Requirements

The Corporate Sustainability Reporting Directive (CSRD) and its technical standard ESRS E1 (Climate Change) mandate Scope 3 logistics emissions reporting for companies where the topic is deemed material.

Double Materiality Assessment

Under CSRD, companies must apply double materiality before deciding what to disclose:

1. Impact materiality — Does the company's logistics activity (and resulting emissions) have a material impact on people and the environment?
2. Financial materiality — Do climate-related risks or regulations (carbon taxes, fuel costs, route disruptions) materially affect the company's financial position?

For most companies that ship or receive goods, the answer to both questions is yes. Logistics is among the most commonly flagged material topics in early CSRD double-materiality assessments.

Assurance Requirements

CSRD mandates mandatory independent third-party assurance of sustainability data — including Scope 3 transport emissions:

This trajectory means the quality bar for underlying logistics data will increase year on year. Companies relying on rough spend-based estimates or unadjusted averages face escalating assurance risk.

What "Credible Methodology" Means Under ESRS

ESRS requires GHG reporting to be based on established international frameworks to ensure comparability and auditability. For logistics, a credible methodology must be:

• Aligned with global standards — follows GHG Protocol and ISO 14083:2023
• WTW-based — includes both operational (Tank-to-Wheel) and energy provision (Well-to-Tank) emissions
• Transparent on data quality — prioritises primary data (actual fuel use) over modelled defaults; clearly states data quality tier (e.g., GLEC Framework's tiered indicator)
• Standardised — the GLEC Framework is explicitly recommended by CDP and recognised by ESRS as an acceptable implementation guide for ISO 14083-compliant results

The Practical Challenge

A sustainability manager trying to compile CSRD-compliant Scope 3 Category 4 and 9 data typically faces:

• Missing primary data from carriers who have not invested in emissions tracking
• Inconsistent methodologies — different carriers using different calculation bases, emission factors, or allocation rules
• No audit trail — figures exist in spreadsheets or PDF reports with no way to trace back to source activity data

This is not a data volume problem. It is a methodology and traceability problem — which is precisely what ISO 14083, the GLEC Framework, and platforms like CO2Path are designed to solve.

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