Carbon Accounting vs. GHG Accounting
While “carbon accounting” is the most common term, GHG accounting (Greenhouse Gas accounting) is more accurate. Carbon accounting often refers only to CO₂, whereas GHG accounting covers all greenhouse gases — including methane (CH₄), nitrous oxide (N₂O), and fluorinated gases — expressed in CO₂ equivalent (CO₂e).
The Three Scopes of GHG Emissions
The GHG Protocol, the most widely used international standard, organizes emissions into three scopes:
Scope 1 — Direct Emissions
Emissions from sources that are owned or controlled by the company. Examples include fuel combustion in company vehicles, on-site heating, and industrial processes.
Scope 2 — Indirect Energy Emissions
Emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the company. Although produced off-site, these emissions are a direct consequence of the company’s energy consumption.
Scope 3 — Other Indirect Emissions
All other indirect emissions that occur in the company’s value chain, both upstream and downstream. This includes purchased goods and services, business travel, employee commuting, waste disposal, and — critically for shippers — transportation and distribution.
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Scope 3 typically represents 80% of a business’s total GHG emissions. For shippers, transport emissions fall squarely within Scope 3, making freight decarbonization a critical lever for reducing overall footprint.
Why GHG Accounting Matters
- CSR & Reporting — Increasingly required by regulations (CSRD in Europe, SEC climate disclosure rules)
- Supply chain optimization — Identifying emission hotspots helps prioritize reduction actions
- Regulatory compliance — More jurisdictions are mandating carbon reporting and reduction targets
- Competitive advantage — Clients and partners increasingly require environmental transparency
Transport Emissions in the GHG Framework
For most shippers, freight transport emissions are categorized under Scope 3, Category 4 (Upstream transportation and distribution) and Category 9 (Downstream transportation and distribution). Understanding this classification is the first step toward measuring and reducing your freight carbon footprint.
What’s Next?
Now that you understand how emissions are categorized, explore the specific environmental impact of freight in the next course: Freight Environmental Impact.