Glossary›Emissions accounting and measurement›Upstream vs downstream emissions
Glossary term
Cluster D · D31
Tier 1
Upstream vs downstream emissions
Definition
Upstream emissions arise from goods and services an organisation buys, before they reach it. Downstream emissions arise from goods and services it sells, after they leave it. The division splits the fifteen Scope 3 categories into eight upstream and seven downstream, and determines which categories a given business model must consider.
GHG Protocol Corporate Value Chain (Scope 3) Standard (2011)
· chapter 5 ·
In force
On this page
In practice
The split is defined by the direction of the purchase, not by physical position or by time.
Half
Categories
Contents
Upstream
1 to 8
Purchased goods and services; capital goods; fuel and energy activities not already in Scope 1 or 2; upstream transportation and distribution; waste generated in operations; business travel; employee commuting; upstream leased assets
Downstream
9 to 15
Downstream transportation and distribution; processing of sold products; use of sold products; end-of-life treatment of sold products; downstream leased assets; franchises; investments
The trap sits in transport and leasing, both of which appear on both sides. A freight leg is upstream if the entity paid for it as a buyer and downstream if it relates to sold product transport the entity did not pay for. A leased asset is upstream where the entity is the lessee and downstream where it is the lessor. Two categories, same physical activity, and the direction of the commercial relationship decides.
For a private Australian business the practical value of the distinction is that it predicts where the material tonnage sits. A distributor or professional services firm is overwhelmingly upstream and its Scope 3 work is a procurement data problem. A manufacturer of energy-consuming products is overwhelmingly downstream, and Category 11, use of sold products, will usually dwarf everything else in the inventory including Scope 1 and 2 combined. An entity that reports Scope 3 without a downstream assessment, in a business where downstream is structurally dominant, has a completeness problem rather than a measurement problem.
What the assurer does with it
The assurer tests the category screening before testing any number. They ask the entity to walk through all fifteen categories and state, for each, whether it is included, excluded or assessed as immaterial, with the basis. The screening is the population definition, so a gap there invalidates everything downstream of it.
They accept an exclusion supported by a quantified screening estimate showing the category falls below the threshold. They reject an exclusion on the grounds that data was unavailable (unavailability is a data problem, not a materiality conclusion) an exclusion of Category 11 by a manufacturer of energy-using products with no quantification, and a screening document that assesses only the categories the entity happened to have data for.
Where a category is included, the follow-up request is the boundary applied within it, tested against the minimum boundary in the Scope 3 Standard.
Commonly confused with
Scope 1, 2 and 3 themselves. Upstream and downstream is a subdivision of Scope 3 only; Scope 1 and Scope 2 are neither. Also confused with supply chain, which conventionally means only the upstream half.
Sources
1
Corporate Value Chain (Scope 3) Accounting and Reporting Standard, full text
GHG Protocol
2
Review status
Review required
Last reviewed
15 September 2026
Editorial pass, unsigned
Reviewer required
Carbon accounting specialist
Next scheduled review
1 July 2027
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 population the two halves together describe
The 2011 document that defines the split and the minimum boundaries
What happens at the seams where transport and leasing appear twice
Related questions
How do we work out which Scope 3 categories are material for us?
−
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.
Do we have to report Scope 3 in year one?
+
No. AASB S2 gives first-time reporters relief from disclosing Scope 3 greenhouse gas emissions in their first annual reporting period, and Scope 3 is required from the second year. Taking the relief in year one is normal, but the supplier data work needs to start in year one anyway.
Other terms in this cluster
Upstream vs downstream emissions