Glossary›Emissions accounting and measurement›Fuel and energy related activities (Scope 3 Category 3)
Glossary term
Cluster D · D40
Tier 2
Fuel and energy related activities (Scope 3 Category 3)
Definition
Category 3 covers the emissions of producing and delivering the fuel and electricity a company buys, where those emissions are not already counted in Scope 1 or Scope 2. It has two main parts: the well-to-tank emissions of extracting, refining and transporting fuel, and the losses incurred transmitting and distributing electricity across the grid.
· Appendix B, Scope 3 measured per the GHG Protocol Corporate Value Chain (Scope 3) Standard · first disclosed in the second reporting period
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In practice
Category 3 is the cheapest Scope 3 category to calculate and the one most often forgotten. It needs no new data at all: the litres of diesel and the kilowatt hours you already collected for Scope 1 and Scope 2 are the entire activity dataset. The only new input is a different set of factors.
The discipline is avoiding double counting.
Already counted
What Category 3 adds
Scope 1 counts the combustion of the fuel
Everything that happened to that fuel before it reached your tank
Scope 2 counts the generation of the electricity you consumed
The generation of the electricity lost in getting it to you
Applying a full life-cycle factor in Category 3 instead of an upstream-only factor double counts the combustion or generation emissions already reported. The published factor sets vary in what they bundle, and the entity has to check rather than assume.
For an Australian reporter the relevant nuance is grid loss factors, which differ materially by state and are published as part of the National Greenhouse Accounts factor set. Using a national average where state-level factors exist is a defensible simplification only if it is disclosed as one.
What the assurer does with it
The assurer’s first test is an arithmetic one and they do it early because it is fast: does the Category 3 activity data agree, line for line, to the Scope 1 fuel and Scope 2 electricity activity data already tested? Any difference is either an error or an undisclosed judgement.
They then check the factor: which set, which edition, and specifically whether it is an upstream-only factor or a full life-cycle factor.
They accept the NGA Factors upstream and indirect factors with the edition cited. They reject a life-cycle factor applied on top of a combustion factor, a Category 3 total that does not reconcile to the Scope 1 and 2 populations, and a market-based Scope 2 position that is not carried through consistently into the Category 3 grid-loss calculation. Because the arithmetic is simple and the data is already assured, an error here reads badly out of proportion to its size.
Commonly confused with
Scope 2 itself. Losses on the transmission network are not your Scope 2, because you did not consume that electricity; they are Category 3.
Timing and relief
The standard Scope 3 position applies. Scope 3, and therefore this category, may be omitted from an entity’s first annual reporting period under AASB S2 Appendix C paragraph C4(b), and under paragraph C5 the entity may keep relying on that relief when presenting the relieved year as comparative information in later periods. Group 1 first discloses Scope 3 for periods beginning on or after 1 January 2026, Group 2 from 1 July 2027 and Group 3 from 1 July 2028.
Sources
1
2
3
Review status
Review required
Last reviewed
15 September 2026
Editorial pass, unsigned
Reviewer required
Carbon accounting specialist
Next scheduled review
1 August 2027
next expected National Greenhouse Accounts Factors release
Part of
Cluster D, Emissions accounting and measurement
49 terms from the head term carbon accounting down to individual Scope 3 categories and the mechanics of factors, boundaries and data quality. The largest cluster in the glossary.
Related terms
The generation figure Category 3 sits immediately upstream of
Where the upstream and indirect factors come from
The Scope 2 method position that must carry through to the grid-loss calculation
Related questions
Where do Australian emission factors come from?
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The National Greenhouse Accounts Factors, published each year by the Department of Climate Change, Energy, the Environment and Water. They give Scope 1 factors by fuel and Scope 2 electricity factors by state and territory. NGER-registered corporations must use NGER measurement methods for their NGER reporting.
We have sites in several states. Does that change our emission factors?
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Yes, for electricity. Location-based Scope 2 factors differ by state and territory because grid intensity differs, so you need electricity consumption split by site and state and then the matching factor for each. Scope 1 fuel factors are national and do not change from one state to another.
How do we work out which Scope 3 categories are material for us?
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You screen all fifteen GHG Protocol categories, estimate each roughly off accounts payable spend, and document why you included or excluded each one. The screen is the deliverable as much as the answer, because the practitioner will test the reasoning behind an exclusion at least as hard as the numbers behind an inclusion. Expect the answer to be concentrated in a handful of categories.
Other terms in this cluster
Fuel and energy related activities (Scope 3 Category 3)