Emissions overlap: why the same tonne appears on multiple companies' reports
A client asks: “If our supplier already reports this emission in their own Scope 1, why does it also appear in our Scope 3? Isn’t that being counted twice?” This question comes up in every first Scope 3 project. The answer is that the same tonne does indeed appear on multiple companies’ reports, and this is an intentional feature of the system, not an error.
Why emissions overlap across the value chain
The GHG Protocol is designed to distribute responsibility across the value chain, not to avoid overlap between companies. When a steel mill produces a tonne of steel, the emissions associated with its manufacture belong to the mill as Scope 1. The same tonne of steel reaches an automaker as a raw material, and the emissions from its production fall under the automaker’s Scope 3 Category 1 (purchased goods and services).
The automaker sells the car to a dealership, at which point those same tonnes of steel are part of the dealership’s Scope 3 report (Category 1, purchased products). If a customer leases the car, the emissions appear on the leasing company’s report under Category 8 or 13. The same emission tonne is on four different companies’ reports.
This is intentional. Climate targets cannot succeed if every company can ignore its value chain on the grounds that “someone else is already reporting it.” Overlap ensures that every company in the chain has an incentive to influence emissions through procurement decisions and product design.
Example: one tonne, three reports
A concrete chain. A Finnish steel mill produces one tonne of steel, generating approximately 1.9 tonnes of carbon dioxide equivalent (CO2e) via a typical blast furnace route.
The steel mill reports 1.9 tCO2e in Scope 1 (fuel combustion) and Scope 2 (purchased electricity and heat).
The automaker purchases the steel and reports 1.9 tCO2e in Scope 3 Category 1 (purchased goods and services). Its own Scope 1+2 emissions from vehicle assembly are additional, for example 0.5 tCO2e per car.
The car dealership purchases the finished car and reports the full value chain emissions (e.g. 8 tCO2e per car) in Scope 3 Category 1. This figure includes both the steel mill’s and the automaker’s own emissions.
The same 1.9 tCO2e therefore appears in three reports. Globally, however, the emission is generated only once (at the steel mill), and it is counted once in the world’s total emissions. For the purposes of each company’s own targets, every company in the chain is accountable for its share.
What overlap does NOT mean
Overlap is not a calculation error. It does not need to be “removed” or deducted from a report. It does not distort the measurement of a company’s own target, because the target is always expressed relative to the company’s own reported figure, not a global total.
Overlap also does not mean that reduction actions have no effect. If an automaker switches to a fossil-free steel supplier, both the automaker’s and the dealership’s Scope 3 figures decrease. The impact propagates forward through the chain.
In practice, overlap means that a company’s Scope 3 figure cannot be added together with another company’s figures without first identifying overlaps. For example, when consolidating parent and subsidiary companies within a group, internal purchases must be eliminated so they are not counted in both entities.
How overlap affects reduction targets
The Science Based Targets initiative (SBTi) accepts overlap and makes no attempt to eliminate it. Under SBTi’s logic, every company sets targets from its own perspective. In aggregate, global targets cover physical emission sources once, because each company in the chain influences different levers: supplier selection, product design, and end-user guidance.
This is also important because otherwise Scope 3 targets would be practically impossible to measure consistently. A company would need to know what its suppliers and customers are doing in their own reports and update its own figures accordingly. In the current system, every company reports from its own perspective and reductions are reflected in each company’s own numbers.
The shared logic of the Paris Agreement’s 1.5 °C pathway and the GHG Protocol is that all companies in the chain set targets, and the chain decelerates faster than the sum of its individual links.
When overlap causes problems
Overlap between companies in the value chain is acceptable. Problems arise when the same emission is counted twice within a company’s own report. This is referred to as double counting.
Typical double counting situations:
The same purchase in two categories. For example, a company vehicle whose fuel costs have been counted both in Category 1 (purchased fuel) and Category 8 (leased assets). The boundary must be clearly defined.
Scope 3 overlapping with Scope 1/2. Fuel for vehicles owned by the company itself is Scope 1, not Scope 3 Category 1. The same logic applies to energy used in owned premises: that is Scope 2, not Category 1.
Category 3 overlapping with Scope 2. Category 3 (fuel- and energy-related emissions) must not include emissions already reported in Scope 2. Only well-to-tank and transmission losses are included.
Carbon credits reported incorrectly. Carbon credits cannot be deducted from gross emissions at the Scope 1/2/3 level. They are reported separately in net figures. Otherwise, a misleading picture is created and double counting occurs with the original source of the purchased credit.
Frequently asked questions
Is emissions overlap an error?
No. Overlap between companies in the value chain is an intentional feature of the GHG Protocol. Every company in the chain reports its own responsibility, which gives all companies an incentive to reduce emissions using their own levers.
Should I deduct from my report the emissions my supplier has already reported?
No. Your supplier’s Scope 1 emissions are to be reported in your Scope 3 Category 1. Deducting them would distort the calculation and would not comply with the GHG Protocol.
How does SBTi handle overlap?
SBTi accepts overlap and bases its target logic on the premise that every company in the chain sets its own targets. Target measurement is done based on each company’s own reported figure, not a global total.
Can the same emission appear twice in my Scope 3?
It should appear only once. If the same purchase or emission appears in two Scope 3 categories, it is a double counting error within your own report that must be corrected. The most common place for this error is the boundary between Categories 1, 3, and 8.
What is the difference between double counting and overlap?
Overlap means that the same emission appears on multiple companies’ reports. This is a system feature and is acceptable. Double counting means that the same emission is counted twice within a single company’s own report, which is an error that must be avoided.
Uncertain about your own Scope 3 report?
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