Calculating product carbon footprint is essential for understanding, managing, and reducing greenhouse gas (GHG) emissions associated with products and related activities. Here are a few reasons:
1. Climate Change Mitigation: According to statistics from the World Resources Institute, the energy sector is a major contributor to global emissions, with electricity and heat contributing 29.7%, transportation 13.7%, manufacturing and construction 12.7%, and buildings 6.6% of total emissions. Determining one's carbon footprint helps achieve global climate targets, such as the Paris Agreement, which aims to "limit the temperature increase to 1.5°C above pre-industrial levels" and keep the rise in the world's average temperature well below 2°C.
2. Cost Reduction & Efficiency: By identifying emission hot spots in raw material purchase and processing, product manufacturing process, and transportation, organizations can optimize energy usage, reduce fuel consumption for any process-related activities and transportation, and improve process efficiency there by leading to cost savings and lower carbon taxes.
3. Sustainability: A product's carbon footprint assesses the environmental impact throughout its life cycle and measures the amount of greenhouse gas emissions (GHG) generated by the product. The product emission report allows organizations to identify areas of improvement and design sustainable products with relatively lower carbon footprints right from raw material extraction to the product end of life.
4. Supply Chain Transparency & Risk Management: According to a BCG analysis, corporate supply chain (Scope 3) emissions are 26 times higher than their direct operational emissions. Yet, many organizations overlook Scope 3 data, exposing themselves and their investors to significant risks that can impact overall performance. To mitigate supplier-related risks, businesses must prioritize collaboration, incentivization, and efficient digital data collection. However, gathering accurate emissions data remains challenging due to the complexity of supply chains and the diverse manufacturing processes of suppliers.
5. Regulatory Compliance & Reporting Requirements: Many governments and international bodies require companies to disclose their carbon footprints like the GHG Protocol, ISO 14067, PAS 2050, EU CSRD (Corporate Sustainability Reporting Directive), EU CBAM and SEC Climate Disclosure Rules (USA). Failure to comply with regulatory standards could result in hefty penalties, restricted trade and market access.
6. Competitive Advantage & Market Demand: With growing customer demand for sustainable products, businesses are increasingly shifting toward low-carbon alternatives. By leveraging Product Carbon Footprint (PCF) data, organizations can compare similar products from different suppliers, enabling informed purchasing decisions and supplier diversification. Additionally, green investors can use this data to make strategic financial decisions that align with sustainability goals.
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To know more on PCF, Read our earlier blogs below...
What is a Product Carbon Footprint and Why It Should Matter to You
Decoding Product Carbon Footprint Assessment: A Pathway to Sustainable Business Success
Let's assume a battery manufacturing facility produces 60 kWh lithium-ion batteries and we want to calculate the total carbon footprint of one battery unit, following a Cradle-to-Gate approach (raw materials to factory gate).
1. Define the System Boundaries & Functional Unit
• Functional Unit: 1 battery (60 kWh capacity)
• System Boundaries: Cradle-to-Gate (Partial Product Life Cycle Assessment)
• Emission Scope: Scope 1 (direct), Scope 2 (electricity), Scope 3 (upstream emissions from materials & transport)
2. Breakdown of Emissions per Lifecycle Stage
The total carbon footprint is calculated by summing the emissions from raw material extraction, actual battery production in the manufacturing facility, and transportation of the raw materials in the factory.
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Assumption: The battery manufacturing facility is located in Delaware, USA and there is raw material transportation from different parts of the USA, and imports as well from China and Germany.
Raw Material Extraction & Processing:
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(B) Battery Manufacturing Process in the Factory
Energy-intensive processes like electrode drying, cell assembly, and battery pack formation contribute to emissions.
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(C) Transportation of Materials to Factory
Assuming materials are transported by road and ship over various distances: The GHG protocol worksheet for Transport has been used for arriving at Total emissions. Fuel and distance-based methodology for the calculation of Emission was used. (Screenshot of the worksheet is provided below for your reference)
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3. Total Carbon Footprint Calculation
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Conclusion & Potential Reduction Strategies
• Recycling materials (e.g., nickel, lithium, cobalt) can reduce raw material emissions.
• Using green energy (solar, wind) in manufacturing can cut electricity-related emissions.
• Optimizing transportation routes and switching to lower-carbon logistics can further lower the footprint.
• Battery design innovations (solid-state, alternative cathode materials) can reduce material dependency and emissions.
Emission Factor Sources:
The material composition of the battery:
• Institute of Nickel, Aluminium, Cobalt.
• IPCC
• EPA
• Research Gate
• GHG protocol for Transport Emissions calculations.
Reach out to our regulation experts on chemical and product regulatory compliances