The Biggest Difficulty in Carbon Reduction in the Supply Chain
Market News

The Biggest Difficulty in Carbon Reduction in the Supply Chain

Supply chain carbon emissions are 11.4 times greater than operational carbon emissions. Therefore, if companies are to move towards net zero, the effectiveness of supply chain carbon reduction will be an important key. However, supply carbon reduction faces two major problems: inconsistent calculation methods and low data transparency.
Published: Oct 13, 2022
The Biggest Difficulty in Carbon Reduction in the Supply Chain

Supply chain carbon emissions are 11.4 times greater than operational carbon emissions. Therefore, if companies are to move towards net zero, the effectiveness of supply chain carbon reduction will be an important key. However, there are two major challenges in supply decarbonization, inconsistent calculation methods, and low data transparency. Why is carbon emission calculation easy to get stuck? How to solve it?

Who Can Say About Carbon Data?

At present, companies are doing carbon management, whether it is to follow ISO 14064 for the calculation of organizational carbon emissions, or to evaluate the carbon footprint of products, they all need to face the situation of asking for carbon emissions data from the upstream supply chain. For example, if the most downstream notebook computer brands want to calculate the carbon footprint of notebook computers, they need to ask dozens or hundreds of upstream suppliers of plastics, batteries, panels and other upstream suppliers for carbon emission data of the raw material manufacturing process, and These data are passed down layer by layer.

When upstream and downstream carbon data are difficult to obtain, many companies simply do not calculate the carbon footprint of their products, or only disclose a few available data. In addition, the correctness of the data provided by the supplier is also a big question, for example: whether the data has been verified by a third party.

Three Problems in Carbon Emissions Calculation

The current difficulties faced by supply chain carbon emissions calculation can be summarized into the following three reasons:

The Credibility of Carbon Data Is Doubtful:

Inconsistent calculation methods and inconsistency in database sources result in a reduction in the credibility of carbon data. In terms of calculation methods, when companies disclose upstream supply chain data, they may follow physical basis (calculated based on the carbon emission coefficient of the unit weight of raw materials), economic basis (calculated based on the carbon emission coefficient of the unit price of raw materials), and mixed methods. (Supplier data is matched with database data), or suppliers directly provide accurate carbon emission information for calculation. Different calculation methods may cause differences in calculation results, and it is difficult to ensure the consistency of results.

Inconsistent database sources, resulting in different emission coefficients, will also lead to different results. At present, there are quite a few databases to choose from in terms of international and domestic emission coefficients (such as: Environmental Protection Agency carbon footprint database, ITRI DoITPro database, Swiss Ecoinvent database, etc.), and different companies may use their own inventory experience. Or the data calculation logic is different, and the respective databases are used as the calculation basis, which eventually leads to inconsistent calculation results.

Difficult To Strike a Balance Between Commercial Confidentiality and Transparent Disclosure of Carbon Data:

The acquisition of carbon data needs to face the protectionism of various enterprises, and the acquisition of carbon emission data in the supply chain is even a gray area. How to improve the transparency of data sharing and solve the dilemma of commercial confidentiality risks is a common problem for enterprises.

Suppliers and brands may even stand on opposite sides. For suppliers, when brands require detailed carbon information, they may be less willing to provide them. But for downstream brands, the more detailed the information provided to me by the upstream, the more it can help me improve the transparency and accuracy of the information, and it can help me set the overall carbon emission management goals for the company in the future. Therefore, the balance in the middle depends on a requirement of consistency. In addition, brand owners and suppliers are concerned about the confidentiality of data. The two parties share process-related information, and how to ensure that confidentiality is not leaked is also a big problem.

The Systems are Incompatible and the Cost of Data Exchange is High:

Supply chains often span multiple stakeholders from different industries and regions, so there is a high cost of exchanging information. How to improve the interoperability of the data exchange process, including system docking and format structure compatibility, is very important.

For example, today the supplier provides raw materials to brand A and brand B at the same time, but the information format and quality required by the two companies are very different, which may cause trouble for the supplier. Therefore, in terms of the same industry chain, if the upstream, middle and downstream can reach a consensus on the data sharing structure, it should be able to shorten the data sharing communication time and speed up the efficiency of information provision.

Jointly Expose Primary Carbon Data from Upstream to Downstream, and Master the Carbon Footprint of Final Products

Based on carbon data sharing, data exchange should cover five aspects: general information, boundary description, data collection, quality and exchange, distribution principles, and presentation of carbon footprint results.

Each aspect has its own elements that should be disclosed. For example, in data collection, quality and exchange, enterprises should explain the use ratio of primary data, primary and secondary data sources, time range for primary and secondary data collection, and time representative of data collection.

In addition, compared with general brand owners who only ask them to provide carbon footprint calculation methods and results when they ask for the upstream supply chain, this standard encourages companies to use primary data, so it puts more emphasis on disclosing the primary data sharing ratio (Primary Data Share, PDS) to make carbon footprint calculation more accurate.

Under the global climate of carbon reduction, large upstream supply chain manufacturers have begun to require downstream supply chains to provide carbon inventory data. However, the lack of traces is a source of carbon anxiety for small and medium-sized enterprises. The supply chain is involved in the whole body, and the carbon data of each supplier will affect the setting of carbon reduction goals and results verification of the overall supply chain in the future.

Published by Oct 13, 2022 Source :Business Next

Further reading

You might also be interested in ...

Headline
Market News
Commercial Camera Drones Fly You Over Various Commercial Applications
How to apply camera drones in the commercial field? What are the key technologies of camera drones? This article discusses the application and technology development trend of camera drones in the commercial applications.
Headline
Market News
The Internet of Vehicles Starts a New Era of Safer and More Efficient Smart Transportation
To realize the smart city of the future, it is indispensable to build a safer and more efficient traffic environment, and smart vehicles with networking and various advanced functions are the key.
Headline
Market News
What is the Spindle? Market Scale Analysis of the Spindle Industry
The shaft in a machine tool is the axis of rotation in it, and most likely there will be a drive shaft in it.
Headline
Market News
Overview of the Development of the Global Construction Industry, and Explore the Development of China's Crane Industry
The development of the construction industry has a close relationship with the scale of investment in fixed assets, and they promote and restrict each other.
Headline
Market News
Looking Back at Taiwan's Challenges and Opportunities from the Development of the Global Satellite Communication Industry
The unlimited business opportunities brought by the space industry are highly valued by governments and enterprises of various countries. As the technology research and development of the global industry becomes more and more mature, the future will enter the new space era.
Headline
Market News
Offshore Wind Power will Become the Driving Force for Green Energy Development
Under the rising concept of sustainable development in the world, while responding to carbon neutrality, energy transformation is the goal of global common development. In recent years, offshore wind power has become the focus of renewable energy. While Taiwan's offshore wind power industry is about to catch up, mature European countries have begun to discuss the issue of decommissioning wind turbines.
Headline
Market News
Explore the Development of Global and European Rubber and Plastic Machinery
With the application of rubber and plastic more and more widely, rubber and plastic machinery is becoming more and more intelligent.
Headline
Market News
What are Linear Slides and Ball Screws? Development of Linear Motion Elements
Ball screws are high-efficiency feed screws that contain balls that rotate between the screw and nut. Compared with the traditional slide screw, the driving torque is less than one-third, which is most suitable for saving the power of the driving motor.
Headline
Market News
Smart and Agile Manufacturing, An Essential Ticket to Enter Supply Chain
The market demand is changing rapidly. How should the manufacturing industry transform itself to be more agile, greener, and more flexible, to meet the needs of customers and the government, and smart and agile manufacturing lays a solid foundation to resist the rapidly changing market.
Headline
Market News
What is Biomass Energy?
Biomass energy is an important member of the global green power/renewable energy family, and its contribution is second only to hydropower and wind power.
Headline
Market News
Understand the Business Model and Technology of the Global Energy Storage Market
Energy storage systems are widely used in the frequency regulation requirements of transmission and distribution terminals. More and more countries have launched incentive policies to promote the continuous increase in the proportion of renewable energy power generation, which in turn drives the steady growth of energy storage demand.
Headline
Market News
What is Net Zero Emissions?
With the pressure of international net-zero emissions and the clarion call for carbon tariffs in Europe and the United States, countries have formulated relevant policies to devote themselves to energy conservation and carbon reduction.
Agree