case study: scope 3 category 11 (use of sold product) emissions calculations
Scenario-based pragmatic approach.
at a glance
challenges
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Requirement raised as a result of UK Supreme Court ruling but no guidance yet issued by UK Government. Regulators on methodology for Scope 3 Category 11 calculations.
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Not yet clear how these Category 11 emissions will be used, or the context against which they will be measured.
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Lack of clarity of baseline to consider context of emissions.
outcomes
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Range of scenarios calculated for the “use of sold product" emissions. associated with production profiles.
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Comparison against UK and Global carbon budgets to set context for magnitude of emissions.
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Summary report issued to facilitate discussions with stakeholders.
“this is a fast evolving area....with a lot of ambiguity around the process, therefore and we needed to consider a range of options. Because of their experience in the industry, the sustain:able team were able to take a really pragmatic approach which we appreciated.”
client rep
objectives
The Greenhouse Gas Protocol classifies Scope 3 emissions into 15 categories. Category 11, “use of sold product”, aims to assess the emissions resulting from use of whatever product the company produces and sells. For oil and gas companies, this is their produced oil and gas.
The UK Supreme Court issued a judgement in June 2024 in relation to the Horse Hill onshore oil development project (case of Finch vs Surrey County Council).
The ruling held that because the combustion of the oil to be produced from the development (Scope 3 Category 11) had not been included in the emissions assessment in the Environmental Impact Assessment (EIA), approval of the project by the local Council was unlawful. This judgement has impacted all oil and gas operators, both onshore and offshore.
The UK Government has launched a consultation process to develop new EIA guidance, which is due to be implemented by Spring 2025. However there is a possibility that further legal challenges might further delay this. During this consultation process, OPRED have deferred assessment of EIAs for new developments until the new guidance is in place.
Our client needed to understand their Scope 3 Category 11 emissions, to ensure they had considered the magnitude of the impact and context of their operations - in preparation for discussions with various stakeholders.
steps taken
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Derived a range of potential emissions factors for combustion of oil and gas to contribute to a range emissions scenarios, including field-specific factors calculated from the produced hydrocarbons.
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Reviewed and analysed past production and P90 – P50 – P10 production forecasts to understand volumes of oil and gas produced over the full life of the project.
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Developed a range of scenarios for utilisation of produced hydrocarbons based on refinery output and combustion scenarios.
results
Using a sensible approach based on the field data and forecasts, we were able to provide a range of possible Scope 3 Category 11 values that the client could decide how to best utilise. Placing the values in context in both a global and local scale recognises the global atmospheric situation, but also attempts to use a more local baseline - until further advice comes from the regulator, the biggest challenge is understanding what baseline to use and how to place these emissions in context.