Improving andharmonising
Scope 3
Reporting

TfS White Paper

Together for Sustainability (TfS) has produced aWhite Paper, Improving and harmonising Scope 3
Reporting, that explores the challenges andpotential solutions to harmonise carbon accounting
methodologies, and uncovers complexities andstrategies for a more sustainable chemical industry.
In November 2022, TfS achieved a major milestone
with the launch of the Product Carbon Footprint(PCF) Guideline, a collaborative effort involving
experts from over 25 chemical companies. Thisguideline addresses a critical challenge within
the chemical industry’s commitment to combat
climate change and offers specific guidelines
for PCF calculation.
During this work on the PCF Guideline, TfS
identified improvement potentials for corporate
greenhouse gas (GHG) accounting that arecaptured and explained in this White Paper.

TfS has identified three key modifications
needed to address this issue:

1	Biogenic carbon accounting	As biogenic carbon sources gain prominence,the development of a robust framework for theiraccurate accounting becomes essential.
—	Biogenic carbon is derived from natural sources like plants andhelps reduce carbon emissions. Currently, companies are notable to accurately account for the benefits of products containing
biogenic carbon in their emission calculations in the scopes of theGHG Protocol that are important for purchasing decisions.
—	The existing accounting approach, known as the 0/0 method,
doesn’t accurately consider the carbon removed from theatmosphere by biogenic materials. This omission occurs both when
products are used and when they are recycled.
—	TfS recommends adopting the newer and more meaningful -1/+1
approach, which factors in the carbon removed and emitted
throughout a product’s lifecycle.
—	The recommended approach of TfS will allow companies toshowcase the benefits of biogenic carbon products accurately andincentivise long-term sustainability efforts. Ultimately, this change
would enable companies to claim carbon removal through biogenic
carbon materials in their emissions reporting.

2	Mass balance as atransitional mechanism	Acknowledging the dynamic shifts underway,
the adoption of a mass balance (MB) approachneeds to be considered as a market-based
mechanism that reinforces the industry’s transitiontowards sustainable practices.
—	This approach integrates biomass, recycled materials and energy
sources into production systems. It enables the gradual inclusionof recycled materials alongside traditional resources, especially incases where separating them during processing is challenging.
It supports the industry in the faster transition to productions
with significantly lower PCF.
—	MB accounting offers several benefits, including transitioning
to a circular economy, producing eco-friendly products
without major investments, scalability, transparency for
informed purchasing decisions and alignment with establishedsustainable sourcing programmes.
—	The GHG Protocol does not currently account for the mass/energybalance approach. It treats alternative feedstocks as standard raw
materials, missing the unique attributes of materials like recycled orbio-based resources.
—	TfS suggests implementing several recommendations, including
accepting MB as a valid approach for recycled and bio-basedmaterials and defining specific sustainability characteristics.
—	Additionally, TfS proposes a solution that involves site-specific mass/energy balance system expansion, certification and consideration ofother renewable feedstock elements in GHG calculations.

3	Recycled materials
and content	With the increasing integration of recycledmaterials and content within the chemicalindustry, there is a need to harmonise
approaches to carbon accounting to recognise
the positive effects of a circular economy at both
corporate and product levels.
—	Technologies like mechanical and chemical recycling
show promise in reducing GHG emissions and keeping materials
in a circular loop. However, incorporating recycled content into
corporate GHG accounting presents challenges.

A reimagined corporate reporting
methodology is key to enable thechemical industry’s progression
towards a circular economy,
encouraging resource efficiency
and GHG emission reduction.