Scope 4, avoided emissions—what are we talking about?
The fight against climate change inevitably requires a reduction in global emissions. Everyone must take action and set goals to reduce their own emissions. Climate neutrality is projected for 2050!
To ensure this process is as effective as possible, every company should conduct its own Greenhouse Gas (GHG) Inventory. This inventory provides a comprehensive assessment of the quantity of emissions produced by the company or local government. It is, in fact, an accurate and detailed inventory prepared in accordance with an official methodology (ISO, the GHG Protocol, or the Bilan Carbone method).
To address climate challenges, a comprehensive assessment requires taking into account all three regulatory emission scopes:
- Scope 1: Direct Emissions
- Scope 2: Indirect emissions related to energy
- Scope 3: Other significant indirect emissions resulting from the legal entity’s operations and activities, as well as, where applicable, from the use of the goods and services it produces
A few years ago, the GHG Protocol raised the idea of a Scope 4 to enable the calculation of avoided emissions. Since then, various international methodologies and standards have addressed this issue.
This article aims to review the various definitions, methodologies, and reporting methods currently specified in regulations.
1. Avoided emissions, Scope 4—is the definition the same?
2. Methodology for calculating avoided emissions?
2.1. Avoided Emissions: How Are They Calculated?
2.2. Avoided Emissions vs. Reduced Emissions: Don't Confuse the Two
3. Manage avoided emissions and align carbon reporting
Managing Emissions Avoided: A Communication Challenge
Avoided Emissions and Reporting: Methodologies and Alignment
Avoided Emissions, Scope 4—Is the Definition the Same?
Scope 4, as defined by the GHG Protocol, includes emissions avoided when a product is used as a substitute for other goods or services that perform the same functions but have a low carbon intensity. In addition, the GHG Protocol also takes into account emissions avoided through the recycling of a product.
The French regulatory method developed by ADEME (through the ABC), the Bilan Carbone® method, and the ISO standards do not use the term “Scope 4,” but refer only to “emissions avoided.”
According toADEME and the Bilan Carbone® methodology, these emissions represent the carbon footprint reductions achieved through a company’s activities, products, and/or services, when such reductions occur outside the company’s scope of operations. A company can thus avoid emissions by offering low-carbon solutions or services, as well as by financing projects.
By definition, Scope 4 represents onlya portion of the avoided emissions as defined by the French regulatory method and the ISO 14069 standard.
The Methodology for Calculating Avoided Emissions
By quantifying avoided emissions, a company has the opportunity to highlight the climate benefits of its products and services throughout their entire lifecycle.
In this way, it offers its customers complete transparency and insight into the carbon footprint of its products, enabling them to better understand their environmental impact.
For a rapidly growing company—and one that is therefore facing an increase in its Scope 3 emissions—calculating its avoided emissions can still allow it to position itself positively as a low-carbon player.
📊Avoided emissions: How are they calculated?
Several standards have provided definitions and methods for calculating avoided emissions, such as the GHG Protocol, ISO 14069, the French regulatory method, and the Bilan Carbone® method. In addition, the Net Zero Initiative and Carbone 4 have also published a guide detailing the preferred methodology for calculating avoided emissions, as well as guidance on reporting and communication.
The scope of each standard is indicated in the table below.
| Reference Framework | Scope |
| GHG Protocol | Products that replace other, more emission-intensive products Products that help reduce emissions elsewhere. |
| ADEME/French Regulatory Methodology | Production and provision of low-carbon solutions or services Financing of "low-carbon" projects |
| BC Method | Recovering materials and energy from waste Producing renewable energy and steam Selling products whose use and end-of-life contribute to reducing greenhouse gas emissions Financing carbon offset projects |
| ISO 14069 | Sale of low-carbon products and services Financing of carbon offset projects |
| NZI | Contributions to solutions marketed by companies in which the company has invested Financial contributions to projects aimed at reducing or avoiding emissions |
Although the scope may vary slightly from one standard to another, the calculation method is very similar.
In fact, these are calculated as the difference between the emissions associated with the new solution (known as a “low-carbon” solution) and the emissions associated with a baseline scenario that would have occurred if the low-carbon solution, service, or project had not existed.
As stated in the carbon footprint methodology, this baseline scenario must answer the question, “What would have happened if my solution had not been implemented?” ISO 14069 advises organizations to determine this baseline scenario based on their industry and the nature of their solution.
Understanding Net-Zero Initiatives
🌿Avoided Emissions vs. Reduced Emissions: Don't Confuse the Two
It is important to highlight the difference between reduced emissions—which result from an actual reduction in a company’s greenhouse gas (GHG) emissions over a fixed period following the implementation of an action plan to reduce its carbon footprint—and avoided emissions, which are determined by comparing a low-carbon product or service to a baseline scenario.
Avoided emissions can take two forms:
➡️ Emissions reductions if the baseline scenario corresponds to the previous situation.
➡️ A smaller increase in emissions when projects result in a smaller increase than the counterfactual scenario.
Manage avoided emissions and align carbon reporting
📢Managing Emissions Avoided: A Communication Challenge
The accounting of avoided emissions is referred to in ISO 14069 as “intervention accounting.” Unlike carbon accounting, these emissions must never be included in or subtracted from the greenhouse gas (GHG) inventory. In fact, the GHG Protocol, the “Méthode Bilan Carbone®,” and French regulatory guidelines all emphasize the importance of reporting avoided emissions and greenhouse gas (GHG) emissions separately.
Communication regarding avoided emissions must also be carefully considered so as not to undermine the credibility of their measurement. The Pillar B guide, drafted by the Net Zero Initiative and Carbone 4, highlights the importance of linking avoided emissions to a business outcome. For example, a company can report the percentage of sales associated with the amount of emissions avoided.
⚙️Avoided Emissions and Reporting: Methodologies and Alignment
By providing transparency and visibility to an organization, avoided emissions help highlight its contribution to low-carbon products or projects.
Although the scope may vary depending on the framework, the calculation methodologies are very similar, comparing the emissions of two scenarios with the same technical characteristics, one of which proposes a low-carbon solution.
These standards are also aligned with regard to GHG reporting. Avoided emissions must never be accounted for or reported in the greenhouse gas inventory.
Thus, whether we are talking about Scope 4 or avoided emissions, the calculation methodology and the reporting of emissions are similar. Only the scope of these emissions may differ slightly, since the term “Scope 4” is used exclusively by the GHG Protocol.
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