Unpacking Scope 3: Category 3 – Fuel and energy-related activities

GHG Scope 3 Upstream activites | Category 3 – Fuel and energy-related activities beyond Scopes 1&2

When we talk about energy-related emissions, most people think of Scope 1 (direct fuel use) or Scope 2 (purchased electricity). But energy’s carbon story doesn’t stop there. Behind every unit of electricity or litre of fuel your business uses lies a deeper, often-overlooked footprint, the upstream emissions that occur before that energy ever reaches you.

These are captured under Scope 3 Category 3: fuel and energy-related activities not included in Scopes 1&2 — the hidden emissions from extracting, refining, producing and transporting the energy you rely on every day.

Understanding Category 3 GHG emissions

Let’s break it down: even though your company might not directly produce these emissions, you still depend on the systems that create them. For example:

• The emissions from drilling, refining and transporting the fuel you purchase for company vehicles
• The energy lost during transmission and distribution before electricity arrives at your facility
• The manufacturing and transport of fuels that power your backup generators

Essentially, Category 3 connects the dots between the energy you buy and the entire value chain that supplies it.

Why it matters

These emissions can be significant, especially for companies with large energy demands. Understanding them helps you:

• Identify the true footprint of your energy consumption
• Make better sourcing decisions (e.g. renewable energy vs. fossil fuels)
• Support suppliers and utilities that invest in low-carbon infrastructure

In short, this category reminds us that every kilowatt-hour (kWh) has a backstory and that story can drive meaningful climate action when we make smarter energy choices.

How to manage and reduce Category 3 GHG emissions

1. Map your energy sources: Identify where your energy and fuels come from and how they’re produced.
2. Use supplier-specific data: When available, get data directly from your energy suppliers instead of relying on global averages or benchmarked values.
3. Invest in renewables: Shifting to renewable power (solar, wind, hydro) can reduce both Scope 2 and Category 3 emissions.
4. Improve efficiency: Reducing total energy use naturally reduces upstream energy-related emissions too.
5. Collaborate with utilities: Partner with energy providers working to decarbonize their supply chains.

Looking ahead

As companies push toward net zero, the boundaries of responsibility are expanding — and so is accountability. Recognising upstream fuel and energy impacts is no longer optional; it’s part of painting a complete, honest picture of your organisation’s climate impact.

Key takeaway: every joule of energy you use carries a footprint that began long before it reached your operations. By understanding and addressing Category 3 emissions, you’re not just managing energy — you’re managing impact.