> ## Documentation Index > Fetch the complete documentation index at: https://code.dcycle.io/llms.txt > Use this file to discover all available pages before exploring further. # Step 4 - Calculate Scope 3 Emissions > Learn how to calculate indirect emissions from your value chain ## Understanding Scope 3 Emissions **Scope 3 emissions** are all indirect emissions (not included in Scope 2) that occur in your value chain, both upstream and downstream. According to the [GHG Protocol Corporate Value Chain Standard](https://ghgprotocol.org/standards/scope-3-standard), Scope 3 includes 15 categories: ``` ┌─────────────────────────────────────────────────────────────────────────────┐ │ SCOPE 3: Value Chain Emissions │ ├─────────────────────────────────────────────────────────────────────────────┤ │ │ │ UPSTREAM EMISSIONS DOWNSTREAM EMISSIONS │ │ (Before your operations) (After your operations) │ │ ───────────────────────── ───────────────────────── │ │ │ │ Cat 1: Purchased goods & services Cat 9: Downstream transportation │ │ Cat 2: Capital goods Cat 10: Processing of sold products │ │ Cat 3: Fuel & energy activities Cat 11: Use of sold products │ │ Cat 4: Upstream transportation Cat 12: End-of-life treatment │ │ Cat 5: Waste generated Cat 13: Downstream leased assets │ │ Cat 6: Business travel Cat 14: Franchises │ │ Cat 7: Employee commuting Cat 15: Investments │ │ Cat 8: Upstream leased assets │ │ │ └─────────────────────────────────────────────────────────────────────────────┘ ``` **Why Scope 3 Matters** For most organizations, **Scope 3 represents 70-90% of total emissions**. Understanding and managing your value chain emissions is essential for: * **Complete carbon footprint** - Required for meaningful climate commitments * **Science-based targets** - SBTi requires Scope 3 if it's >40% of total * **Supply chain engagement** - Identify and work with high-impact suppliers * **Risk management** - Understand exposure to carbon pricing and regulations ## Prerequisites Before calculating Scope 3 emissions, ensure you have: * Dcycle API credentials ([get them here](/docs/quickstart#step-1-get-your-api-key)) * Completed [Step 1: Company Structure](/guides/emissions/ghg-protocol-step-1-company-structure) * Relevant data for the categories you want to track (see individual guides below) **Start Where You Have Data** You don't need to track all 15 categories immediately. Start with: 1. **Category 1** (Purchased goods) - Often the largest 2. **Category 6** (Business travel) - Usually easiest to track 3. **Category 7** (Employee commuting) - Important for office-based companies Then expand to other relevant categories based on your business model. ## Scope 3 Categories Overview The following table shows all Scope 3 categories, their typical relevance by industry, and availability in Dcycle: | Category | Name | Typical % of Scope 3 | Dcycle Status | | -------- | ---------------------------------- | -------------------- | ----------------- | | **1** | Purchased goods and services | 40-80% | ✅ Available | | **2** | Capital goods | 5-15% | ✅ Available | | **3** | Fuel and energy-related activities | 5-15% | ✅ Available | | **4** | Upstream transportation | 5-20% | ✅ Available | | **5** | Waste generated in operations | 1-5% | ✅ Available | | **6** | Business travel | 1-10% | ✅ Available | | **7** | Employee commuting | 1-5% | ✅ Available | | **8** | Upstream leased assets | 1-5% | 🔄 Coming soon | | **9** | Downstream transportation | 5-15% | ✅ Available | | **10** | Processing of sold products | Variable | 🔄 Coming soon | | **11** | Use of sold products | 10-50% | ✅ Available (LCA) | | **12** | End-of-life treatment | 1-5% | ✅ Available (LCA) | | **13** | Downstream leased assets | Variable | 🔄 Coming soon | | **14** | Franchises | Variable | 🔄 Coming soon | | **15** | Investments | Variable | ✅ Available | ## Category Guides ### Category 1: Purchased Goods and Services Track emissions from purchased raw materials, components, goods, and services. Typically the largest Scope 3 category for most organizations. **Methods available:** * Spend-based (Exiobase 3.8.2) * Activity-based * Supplier-specific (EPDs/PCFs) Track emissions from purchased capital goods and fixed assets. Important for organizations with significant infrastructure investments. **Methods available:** * Spend-based (Exiobase 3.8.2) * Activity-based (physical quantities) * Supplier-specific (EPDs for equipment/buildings) **Amortization Approaches** The GHG Protocol allows two approaches for reporting capital goods: 1. **Full accounting in year of purchase** - Report all emissions in the acquisition year 2. **Depreciation approach** - Spread emissions over the asset's useful life Dcycle supports both approaches. Contact support for guidance on which method fits your reporting needs. ### Category 3: Fuel and Energy-Related Activities Upstream emissions from fuels and electricity—automatically calculated when you upload Scope 1 and Scope 2 data. **Includes:** * Well-to-Tank (WTT) emissions for fuels * Upstream electricity generation * Transmission & distribution (T\&D) losses Category 3 emissions are **automatically calculated** by Dcycle. No additional input required—just ensure complete Scope 1 and Scope 2 data. ### Category 4: Upstream Transportation and Distribution Track transportation of purchased goods from suppliers to your facilities, including: * Road, rail, air, and maritime transport * Third-party logistics providers * Inbound logistics ### Category 5: Waste Generated in Operations Track emissions from disposal and treatment of waste generated at your facilities: * Landfill, incineration, recycling, composting * LER codes (European List of Waste) * Treatment method (R/D codes) * Transport to treatment facilities ### Category 6: Business Travel Track emissions from employee travel for business purposes: * Flights (domestic and international) * Rail and train travel * Rental cars and taxis * Distance-based calculations ### Category 7: Employee Commuting Track emissions from employees traveling between home and work: * Survey-based data collection * Transport mode breakdown (car, train, bus, bike) * Remote work and hybrid work patterns * Carpooling support ### Category 9: Downstream Transportation and Distribution Track transportation of sold products from your facilities to customers, including: * Outbound logistics (customer-arranged) * Distribution to retailers * Last-mile delivery For logistics service providers or detailed API documentation, see the [Logistics Tutorial](/guides/emissions/logistics-tutorial). ### Category 11: Use of Sold Products Track downstream emissions from the use phase of energy-consuming products your organization sells. Define product lifespan, energy consumption, and sales volumes by country. **Data needed:** * Product lifespan and energy consumption (electricity, fuel, water) * Units sold per country per period ### Category 12: End-of-Life Treatment of Sold Products Track emissions from end-of-life treatment of products you sell. Requires product-level LCA data. Track emissions from equity investments, debt investments, and project finance. Essential for financial institutions and organizations with significant investment portfolios. **Methods available:** * Investment-specific method (proportional share of investee emissions) * PCAF methodology for financial institutions *Comming soon!* **PCAF Alignment** For financial institutions, Dcycle will support the [Partnership for Carbon Accounting Financials (PCAF)](https://carbonaccountingfinancials.com/) methodology, which provides standardized approaches for measuring financed emissions across asset classes. ## Data Quality and Methodology ### GHG Protocol Data Quality Hierarchy The GHG Protocol recommends improving data quality over time: ``` Level 1: Supplier-Specific Data ────────────────────────────── HIGHEST QUALITY ├─ Primary data from suppliers (EPDs, PCFs) ├─ Verified and specific to your supply chain └─ Goal: 50%+ of Category 1 emissions Level 2: Hybrid Data ──────────────────────────────────────── HIGH QUALITY ├─ Activity data × Secondary emission factors ├─ Physical quantities with industry-average factors └─ Goal: 30%+ of remaining emissions Level 3: Spend-Based Data ─────────────────────────────────── MEDIUM QUALITY ├─ Financial data × EEIO factors ├─ Broad coverage but lower accuracy └─ Starting point for comprehensive coverage Level 4: Extrapolated Data ────────────────────────────────── LOWER QUALITY ├─ Estimated from incomplete data ├─ Use for minor categories only └─ Replace with better data as available ``` **Continuous Improvement** Track your data quality score over time: * **Year 1**: Achieve comprehensive coverage (even if spend-based) * **Year 2**: Move top 10 categories to activity-based * **Year 3**: Engage key suppliers for specific data * **Year 4+**: 50%+ supplier-specific data for Category 1 ## Getting Started We recommend starting with the most impactful and accessible categories: Start with spend-based for broad coverage, then improve data quality for high-impact purchases. [Go to Category 1 Guide →](/guides/emissions/scope-3-category-1-purchased-goods) Usually the easiest to track with high accuracy using booking systems data. [Go to Business Travel Guide →](/guides/emissions/business-travel) Conduct employee surveys or use distance-based estimates. [Go to Employee Commuting Guide →](/guides/emissions/employee-commuting) Track logistics for both inbound and outbound goods. [Go to Logistics Tutorial →](/guides/emissions/logistics-tutorial) Track waste generated at your facilities. [Go to Facilities Tutorial →](/guides/emissions/facilities-tutorial) ## Next Steps Start with your largest emission source Complete supply chain management Track transportation emissions Use supplier EPDs and PCFs