Greenhouse Gas (GHG) Scope 1, 2, and 3 emissions are categorizations defined by the Greenhouse Gas Protocol, a widely used international accounting tool that provides standards for measuring and managing emissions. These scopes are crucial for organizations looking to understand and reduce their environmental impact.

The application of GHG Scope 1, 2, and 3 emissions in the automotive industry is particularly important due to the sector's significant environmental impact, from manufacturing processes to the end-use of products.

Importance in the Auto Industry

For the automotive industry, managing and reducing these GHG emissions is crucial due to several factors:

• Regulatory Compliance: Many countries are imposing strict environmental regulations that require manufacturers to reduce the emissions associated with their products and operations.
• Consumer Demand: Increasingly, consumers are considering the environmental impact of their vehicles as a significant factor in their purchasing decisions.
• Innovation and Competitiveness: Reducing emissions often drives innovation, such as the development of more efficient engines, hybrid and electric vehicles, and advanced manufacturing processes that lower the carbon footprint.
• Corporate Responsibility: There is a growing expectation for companies to demonstrate corporate social responsibility by actively reducing their environmental impact.

By addressing each scope of emissions, automakers not only comply with global standards but also enhance their market competitiveness and contribute to the broader goal of mitigating climate change.

Scope 1: Direct Emissions

Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles).

Scope 1: Direct Emissions in the Auto Industry

• Manufacturing Facilities: Emissions from the operation of facilities and plants where vehicles and parts are manufactured, including the combustion of fuels for heat and power.
• Company Vehicles: Emissions from vehicles owned or leased by the company, used for business operations such as transporting parts or personnel.

Scope 2: Indirect Emissions

Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Although scope 2 emissions physically occur at the facility where they are generated, they are accounted for in an organization’s GHG inventory because they are a result of the organization’s energy use.

Scope 2: Indirect Emissions from Electricity in the Auto Industry

• Electricity Use: The automotive industry consumes large amounts of electricity, particularly in manufacturing plants. This includes the use of electricity for machinery, assembly robots, lighting, and HVAC systems.

Scope 3: Uncontrolled Emissions

Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain.

Scope 3: Other Indirect Emissions in the Auto Industry

• Supply Chain: Emissions generated from the production of materials and parts supplied to the manufacturer, such as steel, plastics, and electronic components.
• Product Use: The largest component for many automakers. This includes emissions from the fuel or energy used by the vehicles they sell, over the lifetime of those vehicles.
• End-of-Life: Emissions involved in vehicle disposal or recycling.
• Business Travel and Employee Commuting: Emissions from travel done for business purposes and the commuting habits of employees.
• Transportation and Distribution: Emissions from the transport of materials and finished products, including shipping of parts from suppliers and delivery of new vehicles to dealerships.

Free Resources

An educational webinar covering the basics of GHG accounting: setting organizational boundaries, calculating Scopes 1 & 2 GHG emissions, and setting a base year to serve as the foundation for future GHG emissions targets.

This webinar recording takes an in-depth look into the various tools, methods, and strategies that can help your company kickstart your Scope 3 GHG emissions accounting.

Program Management: Corporate Responsibility Team - (248) 358-3570