Why emissions are divided at all
The division exists to stop double counting and to separate what you control from what you influence.
If every company simply reported all the emissions associated with its existence, the same tonne would be counted by the manufacturer, the distributor, the retailer and the customer. Aggregate the economy and you would get a number several times larger than reality.
So the GHG Protocol splits emissions by who controls the source. Scope 1 is what you control directly.
Scope 2 is a special case for purchased energy, separated because almost every organisation has it and because it is not literally emitted at your site. Scope 3 is everything else in your value chain — which is deliberately allowed to overlap with other companies' Scope 1, because your Scope 3 is somebody's direct emissions and both of you should see it.
Scope 1 — what you burn
Direct emissions from sources your company owns or controls.
- Stationary combustion
- Fuel burned in fixed equipment: generators, boilers, furnaces, kilns, dryers. For most Nigerian companies, diesel generation is the single largest line in the entire inventory.
- Mobile combustion
- Fuel burned in vehicles you own or operate — fleet, cash-in-transit, plant, marine craft.
- Process emissions
- Released by chemical reactions rather than combustion. Calcination in cement production is the classic case and frequently exceeds the fuel used to drive the kiln. If your process releases CO₂ chemically and your disclosure shows only fuel and electricity, you have missed it.
- Fugitive emissions
- Unintentional releases: refrigerant leakage from cooling systems, methane from gas infrastructure, SF₆ from electrical switchgear. Small volumes, occasionally large CO₂-equivalent figures.
Scope 2 — what you buy as energy
Scope 2 covers emissions from electricity, steam, heating or cooling that you purchase. You do not emit them; a power station does. They are counted as yours because your demand caused them.
Two methods exist. The location-based method applies an average grid factor for the system you draw from, which is what IFRS S2 requires. The market-based method reflects contractual instruments — a power purchase agreement with a specific generation profile, for example — and may be disclosed in addition where relevant.
For most Nigerian companies Scope 2 is the most tractable figure in the inventory: metered consumption, a bill as evidence, and one multiplication. If you can only get one number right in a first cycle, get this one.
The Nigerian boundary sits in a different place
In most markets Scope 2 dominates a company's operational footprint because grid supply is continuous. Here, every hour on a generator moves emissions out of Scope 2 and into Scope 1 at a materially different factor. A site that runs grid for eight hours and diesel for the rest has a completely different split from one that does not — and software that assumes continuous grid supply will report both identically.
Scope 3 — the fifteen categories
Eight upstream, seven downstream. You report those that are material and explain the basis for excluding the rest.
| # | Category | Direction | Typical Nigerian relevance |
|---|---|---|---|
| 1 | Purchased goods and services | Upstream | High — usually the largest upstream line |
| 2 | Capital goods | Upstream | Spikes in capex years |
| 3 | Fuel and energy not in Scope 1 or 2 | Upstream | Includes grid transmission losses |
| 4 | Upstream transport and distribution | Upstream | High — long inland distances |
| 5 | Waste from operations | Upstream | Data quality is the constraint |
| 6 | Business travel | Upstream | Easy to collect, rarely material |
| 7 | Employee commuting | Upstream | Often excluded with a stated reason |
| 8 | Upstream leased assets | Upstream | Situational |
| 9 | Downstream transport and distribution | Downstream | High for manufacturers and FMCG |
| 10 | Processing of sold products | Downstream | High for raw material producers |
| 11 | Use of sold products | Downstream | Dominant for fuels, vehicles, energy-using goods |
| 12 | End-of-life treatment | Downstream | Low to medium |
| 13 | Downstream leased assets | Downstream | Situational |
| 14 | Franchises | Downstream | Situational |
| 15 | Investments | Downstream | Dominant for banks, insurers, pension operators |
The classification errors that cost the most
Generator electricity put in Scope 2
The most common Nigerian error. You did not purchase that electricity — you made it. Fuel in a generator you own is Scope 1, always.
Process emissions omitted entirely
A cement, lime, glass, ceramics or chemicals producer reporting only fuel and electricity has missed a category that often exceeds combustion.
Contracted logistics put in Scope 1
If you bought a transport service rather than the fuel, it is Scope 3 categories 4 or 9. Control decides it, not who paid.
Refrigerants forgotten
Fugitive releases from cooling are Scope 1 and are routinely missed, particularly in food, beverage and retail operations.
Scope 3 dismissed without assessment
Declaring Scope 3 immaterial without a screening assessment is the claim most likely to be challenged, because for most companies it is the majority of the footprint.
Questions
Is double counting across scopes a problem?
Not for the integrity of your own inventory. Your Scope 3 is someone else's Scope 1 by design — the value chain is counted more than once across the economy and that is how the framework works. What matters is that you do not double count inside your own boundary.
Do we have to report all fifteen Scope 3 categories?
No. You report the material ones and explain the basis for excluding others. IFRS S2 also gives relief from Scope 3 entirely in the first annual reporting period — use it to screen and start collecting, not to ignore it.
Which scope is a leased building?
It depends on your consolidation approach and the lease type. Under operational control, a building you operate is inside your boundary and its energy is your Scope 1 and 2. Under financial control the accounting treatment decides. Assets you lease out are category 13. State your approach and apply it consistently.
What about emissions we avoid or offset?
Reported separately, never netted off. Your gross Scope 1, 2 and 3 figures are reported as gross. Purchased carbon credits are disclosed separately with their type and quality, and avoided emissions are not part of an inventory at all.
Check this yourself
A summary of a regulation is not the regulation. These are the primary documents this page is based on.
- The Greenhouse Gas Protocol Corporate Standard
World Resources Institute and WBCSD
- Corporate Value Chain (Scope 3) Standard
Greenhouse Gas Protocol
Defines the fifteen categories and the accepted method for each.
- GHG Protocol Scope 2 Guidance
Greenhouse Gas Protocol