Setting an Emissions Baseline

By Carly Fields

Breakbulk and project cargo movers are likely already familiar with the emission reporting requirements of the Greenhouse Gas (GHG) Protocol Standard. The Protocol – the most widely used international emissions accounting tool – introduced to companies the concept of direct and indirect emissions reporting.

Scope 1 and 2 reporting is now standard, with the former covering direct emissions from owned or controlled sources and the latter covering indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company.

However the last ‘Scope’ is causing consternation among breakbulk and project cargo movers. Scope 3 includes all other indirect emissions not included in Scope 2 that occur in a company’s value chain.

According to Deloitte, for many businesses, Scope 3 emissions account for more than 70 percent of their carbon footprint. It gives the example of an organization that manufactures products, where there will often be significant carbon emissions from the extraction, manufacture and processing of the raw materials that would need to be reported under Scope 3.

Rules for compliance vary with some countries already mandating Scope 3 emissions reporting for large and listed companies and others working towards that. But the tide is clearly flowing in one direction and the advice is to get familiar with Scope 3 reporting as soon as possible.

As an industry-centered networking collective, Breakbulk Events and Media this year hosted a think-tank focused on the challenge of Scope 3 reporting for engineering, procurement and construction companies. With representatives from throughout the supply chain, the kick-off meeting at Breakbulk Europe considered the anticipated requirements from a client perspective. EPCs will need to collect emissions reporting information from material suppliers and transportation companies – whether they are moving materials directly for the EPC, moving it for the supplier or part of a joint venture arrangement on the project. Everything that goes into a project will need to be reported. This is a reporting initiative that needs to be driven by the carriers and facilitated by forwarders and shippers.


Establishing a Baseline

Smart Freight Centre, or SFN, an international non-profit organization focused on reducing greenhouse gas emission from freight transportation, successfully facilitated an emissions reporting standard for the container industry. SFN was integral to the creation of the Global Logistics Emissions Council, or GLEC, in 2014. GLEC has since grown into a voluntary partnership of more than 150 companies, industry associations, programs, experts and other organizations focused on driving emission reduction and enhancing efficiency across global logistics supply chains.

Rik Arends, program director at the Centre and participant in the Breakbulk-hosted think-tank, explained the importance of establishing a baseline – a single or industry methodology – on how to calculate and report greenhouse gas emissions from breakbulk logistics operations.

Whereas the GLEC framework is now well-established, the breakbulk industry is only at the start of its decarbonization journey. In Arends’ view, this late start should be viewed positively: “Breakbulk can learn from other sectors, and from what can be done. There’s a lot of excess knowledge already about like how can we decarbonize and how to calculate and report so let’s make sure that we agree on those assets together, because the last thing you want is one company calculating differently to the others.

“The big question here is the general denominator. It has always been weight and distance, which doesn’t necessarily work for the breakbulk industry. And there are technical questions that have to be solved.”

Arends stressed that reporting emissions from the breakbulk industry does not need to be onerous on forwarders and carriers. Many, he said, are already making these calculations to understand and report on their own carbon footprint. Others know that they need to start reporting soon.

“We know about a quarter of organizations are able to report GHG emissions to customers. And about just over half of the organizations are able to calculate emissions for themselves. We know that there are certain companies that are super advanced, but also companies that are quite behind. Generally speaking, someone needs to take ownership of emissions reporting within an organization to get it right.

“This might be perceived as super complex, but in reality it’s not and you don’t need as high a level of precision as you might expect – more data is not always better,” Arends said. Companies striving for perfection from day one could well be disappointed. “With reasonable average industry numbers you can make a decent, informed decision on your decarbonization options. For example, how quick to load your vessel, or whether you need to change modes of transport. You don’t need very high-quality granular data to make some decisions.


Next Steps for Breakbulk

What’s now needed from the breakbulk industry to move towards the end goal of standardized emissions reporting? The first step is a commitment from the industry, Arends said. The Breakbulk Europe kick-off meeting implicitly implied that was there, he said. Then there needs to be agreement reached by the end of the year through a series of workshops on the methodology and the establishment of a series of default value calculations to allow a reasonable calculation to be made for a set category of vessel. “Then, let’s see if we can come to a reporting cycle where operators are calculating on an annual basis to their customers,” he said.

There are two aspects to this: one is an agreement that everyone does the same regarding data collection. The second is how businesses exchange that information. While some organizations are transparent and fine to share data, others may not be. “We need mutual dependency,” Arends said. An alternative method would be to share relevant data through an intermediary, such as SFN.

Then, a roadmap would need to be created on the governance of the proposed model. “Are we aiming to go for a complete clean cargo model or are we solving this on a more bilateral basis with the organizations? I can see either way happening,” he said.

In terms of timings, as a comparable, the GLEC framework took three years to be finalized. A similar reporting methodology for the chemical sector – recently completed by SFN – took about five months. This included time for piloting and testing and consensus building.

This gives parameters for the breakbulk industry to work to, but ultimately it will be down to the industry to propel this forward. “Engagement from industry is critical for the standards-setting initiative to work,” Arends stressed. “The main message is not to make things very complex.” 


Carly Fields has reported on the shipping industry for the past 21 years, covering bunkers and broking and much in between.

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