Using process-based life cycle assessment to help companies identify emission reduction potentials in their value chain: a case study in the petroleum industry

Increased reporting of scope 3 emissions generated from corporations’ supply chains has not yet been accompanied by significant emission reductions. Unsystematic and non-comparable assessments of scope 3 emissions limit the companies’ ability to act on reported results. There is a need for minimizing inconsistency, boundary incompleteness, and activity exclusion in scope 3 accounting. Process-based life cycle assessment (pLCA) proposes a framework for systematic, in-depth process-level analysis which may strengthen scope 3 inventory boundary setting and activity prioritization. This article bases its discussion around the role and application of pLCA in upstream scope 3 emissions accounting on an existing case study carried out for a larger drilling corporation represented within the petroleum sector. The application of pLCA methodologies for upstream scope 3 accounting demonstrates a large variance in the outlined inventory boundary compared to what current sector-specific guidelines entail. Compared with currently reported sector-specific relevance of scope 3 categories, the GHG emissions magnitude in the pLCA show a disproportionate impact in the categories ‘Purchased Goods and Services’ and ‘Capital Goods’. This indicates a potential risk of underestimating upstream scope 3 categories within the petroleum sector, while underpinning the need for granularity in scope 3 accounting guidelines. Moreover, the study exemplifies a factor four difference in the results between using a spend-based approach and pLCA for purchased goods and services, indicating that the accounting accuracy depends significantly on the GHG emission calculation method. Finally, a set of recommendations are provided towards the GHG Protocol Scope 3 Standard, advocating for less flexibility in the criteria for identifying relevant scope 3 activities on par with size; consistency in using process-based calculation models; and the adherence to sectorial inventory boundary setting and activity prioritization.