GHG Protocol — Scope 3 Category 3: fuel- and energy-related activities

The GHG Protocol Scope 3 Standard defines Category 3 as:

Emissions related to fuel- and energy-related activities not included in Scope 1 or Scope 2.

It captures the upstream and network-level greenhouse gases that sit around your energy use but don’t show up in Scope 1 (which tracks combustion you control) or Scope 2 (which tracks the generation of the electricity and heat you buy). In Dcycle, Category 3 is calculated automatically once your Scope 1 and Scope 2 data is in — there’s no separate upload step, but understanding what it contains helps you interpret your dashboard and answer stakeholder questions.

The four sub-activities

The GHG Protocol splits Category 3 into four activities, labelled A through D.

Activity A — Upstream emissions from purchased fuels

Extracting, processing and transporting natural gas, diesel, petrol, or any other fuel to your facility generates emissions before the fuel even arrives. Activity A captures those upstream impacts.

What drives it: every unit of fuel you burn in Scope 1 also triggers a proportional upstream chain.

Data source in Dcycle: derived automatically from your Scope 1 combustion records (stationary combustion, mobile combustion, fugitive emissions). No extra entry needed.

Activity B — Upstream emissions from purchased energy

Similar to Activity A, but for the electricity, steam, heat and cooling you buy (your Scope 2 consumption). Generating that energy requires fuel — typically gas or coal — and that fuel had its own upstream chain before it reached the power plant.

What drives it: your Scope 2 electricity and heat consumption.

Data source in Dcycle: derived from your electricity and gas invoices recorded as Scope 2.

Activity C — Transmission and distribution (T&D) losses

When electricity travels from a power plant through the grid to your meter, some of it is lost as heat in cables and transformers. To deliver you 100 kWh, the grid had to generate roughly 106–110 kWh (depending on the country). The extra generation needed to cover those losses has emissions, and those emissions belong to you — proportional to how much electricity you consumed.

Formula:

Emissions = Electricity consumed (kWh) × Upstream emission factor (kg CO₂e / kWh) × T&D loss rate (%)

Data source in Dcycle: derived from your electricity invoices. Dcycle applies a country-level T&D loss rate and an upstream emission factor automatically.

Activity D — Generation of electricity, steam, heat or cooling that is purchased and resold

This activity applies only to energy utilities or companies that buy energy in bulk and resell it to third parties. If you purchase electricity from a supplier and then charge it through to a tenant, for example, those downstream sales generate emissions attributed here.

Most organisations do not report Activity D — it is only relevant if your business model includes energy resale.

How Category 3 appears in Dcycle

Dcycle calculates Category 3 automatically from your existing Scope 1 and Scope 2 data. The table below shows exactly what each upload triggers:

What you upload	Dcycle calculates automatically
Fuel invoice (stationary combustion)	Scope 1 combustion + Category 3 Activity A (WTT upstream)
Vehicle fuel consumption	Scope 1 mobile combustion + Category 3 Activity A (WTT upstream)
Electricity invoice	Scope 2 electricity + Category 3 Activity B (upstream generation) + Category 3 Activity C (T&D losses)

You’ll see Category 3 broken out in the Scope 3 → Category 3 row of your emissions dashboard, with Activities A, B, and C shown separately where the data is available.

Checking which emission factor databases Dcycle uses

For Category 3, Dcycle uses country-level upstream and T&D emission factors sourced from the International Energy Agency (IEA). You can verify this directly in the app:

Step 1. Click Data in the left navigation, then click Emission factors.

Step 2. Click Electricity production & T&D.

Step 3. The table shows every record with its Type (Production or T&D), the Database used (IEA), and the EF Version. The Default databases panel on the right lists the source databases by country for both sub-activities.

You’ll see two row types — Production (Activity B, upstream generation) and T&D (Activity C, transmission and distribution losses). For most countries the source is IEA; where a more specific national database is available, Dcycle uses it and lists it as an alternative.

This view is read-only — it is informational only, so you can share the source with auditors or stakeholders.

Reference: GHG Protocol sources

Category 3 is defined in detail in:

• GHG Protocol Corporate Value Chain (Scope 3) Standard, Chapter 5, pp. 33–46
• Technical Guidance for Calculating Scope 3 Emissions, Category 3, pp. 37–48

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Frequently asked questions

Why does Category 3 show emissions if my energy is renewable?

This is one of the most common surprises in a GHG inventory. Here’s the short answer: the Scope 2 market-based method (which can give you zero) and the Category 3 T&D loss calculation use different emission factors.

When you hold a Guarantee of Origin (GoO) or renewable energy certificate for 100% of your electricity:

• Scope 2 (market-based): the emission factor for your electricity is zero, because your certificate matches you to a renewable generator. Dcycle reflects this as 0 kg CO₂e for Activity A2.
• Category 3, Activity C (T&D losses): the emission factor used here is the grid average upstream factor, not your supplier’s factor. This represents the mix of fuels that had to be extracted and burned somewhere in the system to keep the grid running and cover transmission losses — including losses on lines that carried your electricity to you. Even if your electrons came from a wind farm, the distribution network is shared and some of its losses were covered by fossil generation.

In other words: your GoO cancels the emissions from generating the electricity you consumed. It does not cancel the emissions embedded in the losses that occurred while the electricity was being transported to you.

Practical implication: a company with 100% renewable electricity will still see a small but non-zero figure in Category 3, Activity C. This is correct and expected under the GHG Protocol. It is not a data error.

Is Category 3 mandatory to report?

Under the GHG Protocol Scope 3 Standard, companies must evaluate the relevance of all 15 Scope 3 categories and include those that are significant. Category 3 is typically considered relevant for any organisation with material Scope 1 or Scope 2 emissions, so in practice most reporters include it. CSRD (ESRS E1) also expects disclosure of Scope 3 where material.

Can I reduce my Category 3 emissions?

Indirectly, yes — reducing Scope 1 and Scope 2 consumption automatically reduces the upstream and T&D activity in Category 3. Beyond that, choosing suppliers with lower upstream emission factors (for fuel or electricity) also reduces Activities A and B. The T&D loss component (Activity C) is largely outside your direct control; it depends on grid infrastructure.

Why is the upstream emission factor different from the Scope 2 location-based factor?

The Scope 2 location-based factor covers combustion emissions at the power plant only. The upstream factor for Category 3 adds the extraction, processing, and transport of the fuel used at the power plant — the full lifecycle up to the point of combustion. This is why the Activity B and C factors are always slightly higher than the Scope 2 location-based factors you might be used to seeing.