Column 2024.11.05

The relationship between LCA and CO2 emission amount in the supply chain: What GHG emission amount should suppliers provide to buyers?

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As companies' sustainability efforts grow, there are an increasing number of cases where suppliers are required to provide buyers with CO2 emission amount per unit of product. To reduce GHG (greenhouse gas) emission amount , consideration should not be limited to the product usage phase. It is important to calculate GHG emission amount (carbon footprint) across all products and corporate activity using life cycle assessments (LCA) and the GHG Protocol.

You can find out more about carbon footprints here.

→ What is Carbon Footprint (CFP)? Easy-to-understand explanation of calculation methods and examples

Under the GHG Protocol's product standard, the CO2 emission amount per product unit that suppliers must provide to buyers are cradle to gate (until the supplier sells the product).

We will provide a detailed explanation of the accounting process that suppliers should follow and the life cycle assessment (LCA) that should be taken into consideration when conducting accounting.

What is Life Cycle Assessment (LCA)?

Life cycle assessment is a method for quantitatively evaluating the environmental value of a product or Service throughout its entire cycle, from raw material procurement to Manufacturing, sales, and disposal/recycling.

This assessment includes Energy use, resource consumption, waste generation, and CO2 emission amount.

CO2 emission amount, in particular, are an important indicator in LCA because they are considered a major cause of global warming. The CO2 emission amount per unit of product provided by a supplier are calculated based on the results of this LCA, and this data is essential for buyers to understand the environmental impact when selecting and using that product.

Supplier accounting process

The GHG Protocol Product Standard recommends that suppliers share the CO2 Emission factor for each product from the cradle to gate (until the supplier sells the product) in order for buyers to calculate the purchased products and Service as Scope 3 Category 1.

Cradle to Gate is a concept for Settings the scope when assessing the environmental impact of a product's life cycle. It refers to the process from when the raw materials for the product are mined, transported from the mining company to the supplier, and then processed and manufactured by the supplier. For each economic activity that generates CO2 emissions during that process, the supplier multiplies the activity volume by the corresponding Emission factor, tallying the total and provides it to the buyer as a carbon footprint.

On the other hand, buyers are encouraged to calculate and disclose to end consumers the CO2 emission amount from the cradle to grave (from the time the end consumer uses the product until it is disposed of).

The difference between Scope 3 and LCA

The CO2 emission amount provided by suppliers are the information buyers need to calculate as Category 1 of Scope 3 under the GHG Protocol. Both are methods for understanding comprehensive environmental impacts, but they differ in scope and purpose.

For more information on the GHG Protocol and each Scope, please refer to this page.

→ [Save Edition] Too late to ask now? What is the GHG Protocol? A detailed explanation of the differences between Scope 1, Scope 2, and Scope 3

The main differences are the following two points:

① Evaluation target

・LCA: Environmental impact of products and Service

・Scope 3: GHG emission amount resulting from a company's business activity , including those from business activity in the supply chain

② Scope of application

・LCA: The entire life cycle of a product or Service(from Manufacturing to disposal)

・Scope 3: GHG emission amount throughout the entire supply chain in corporate activity

While LCA is an evaluation method that targets products and Service, Scope 3 targets supply chain activity.

summary

In order to understand the environmental impact of a company's products and Service, it is important to consider not only the stages of consumer use and disposal, but also the stages of raw material procurement and Manufacturing. If suppliers provide accurate and detailed CO2 emission amount data from an LCA perspective, it will be possible to comprehensively evaluate the impact of the entire supply chain.

Let's understand the environmental impact by keeping LCA in mind and work to reduce it.

throughout the supply chain
GHG emission amount calculation/visualization,
For centralized management of environmental items
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