Category 4 — Upstream Transportation and Distribution covers GHG emissions from the transportation and distribution of products purchased by the company in the reporting year - specifically, movements in vehicles and facilities not owned or operated by the reporting company. It also includes third-party warehousing and storage of purchased inputs.
Scope of Category 4
Category 4 captures the logistics between the company's suppliers and the company's own facilities. This includes:
- Road transport (trucks and vans operated by third-party logistics providers)
- Rail freight
- Air freight
- Ocean freight (container ships, bulk carriers, tankers)
- Inland waterway transport
- Third-party warehousing and cold storage
Category 4 covers upstream logistics only - the movement of goods coming into the company. The movement of finished goods going out to customers is Category 9 (Downstream Transportation and Distribution). This boundary prevents double-counting.
What Is Not Included
Category 4 does not include:
- Transport in vehicles owned or operated by the reporting company (those are Scope 1)
- Transport of goods between the company's own facilities if in company-owned vehicles (Scope 1)
- Transport of employees (Category 6: Business Travel; Category 7: Employee Commuting)
Calculation Methods
The standard provides four methods for Category 4, reflecting the range of data availability:
Method 1: Fuel-Based Method (Most Accurate)
Requires data on actual fuel consumed by third-party carriers for the company's shipments. Rarely available directly - logistics providers seldom track fuel by individual customer.
Category 4 - Fuel-Based Method
Fuel-Based Emissions
Total transport emissions calculated from actual fuel consumed, in tCO₂e
Fuel Consumed
Volume or mass of fuel burned by third-party carriers for the company's shipments (litres or kg)
Fuel Emission Factor
tCO₂e per litre or kg of fuel burned
Method 2: Distance-Based Method (Common)
Uses distance shipped and freight mass, combined with vehicle-type emission factors (tCO₂e per tonne-kilometre). This is the most widely used method because companies can typically obtain shipment weights and distances from logistics bills.
Category 4 - Distance-Based Method
Distance-Based Emissions
Total transport emissions calculated from shipment mass and distance, in tCO₂e
Mass
Weight of goods shipped, in tonnes
Distance
Distance shipped, in km
Emission Factor
tCO₂e per tonne-km for the transport mode and vehicle type
Emission factors vary by transport mode and vehicle type:
| Transport Mode | Typical Emission Factor (kgCO₂e/tonne-km) |
|---|---|
| Large ocean container ship | 0.010-0.016 |
| Rail freight | 0.022-0.030 |
| Heavy-duty truck (>32 tonnes) | 0.062-0.098 |
| Medium truck (7.5-17 tonnes) | 0.098-0.160 |
| Air freight (long-haul) | 0.600-1.020 |
Method 3: Spend-Based Method (Screening)
Applies EIO emission factors per unit of spend on logistics and freight services. Less accurate but useful for initial estimates when shipment data is unavailable.
Method 4: Average-Data Method
Uses emission factors per unit of product shipped (e.g., tCO₂e per tonne of product shipped), derived from industry-average logistics studies.
A company ships 200 tonnes of components from a supplier 1,500 km away by heavy-duty truck. The emission factor for heavy trucks is 0.082 kgCO₂e per tonne-km. What are the Category 4 emissions from this shipment in tCO₂e?
Including Third-Party Warehousing
Warehousing and storage emissions are calculated based on floor space occupied and duration, multiplied by an energy use and emission factor for the facility type (refrigerated vs. ambient).
Category 4 - Warehousing Emissions
Warehousing Emissions
Total emissions from third-party storage of purchased goods, in tCO₂e
Floor Space
Area occupied in the warehouse, in m²
Time
Duration of storage, in days
Energy Intensity
Energy consumed per unit area per day, in kWh/m²/day
Grid Emission Factor
tCO₂e per kWh of electricity consumed
Reducing Category 4 Emissions
Once measured, Category 4 data supports decisions on:
- Mode shift: Switching from air to ocean freight can reduce per-tonne-km emissions by 50-100x
- Supplier nearshoring: Reducing distances by qualifying regional suppliers
- Load optimisation: Consolidating shipments to improve vehicle fill rates
- Route planning: Minimising empty return legs through load-matching platforms
Ocean freight accounts for roughly 2.5% of global GHG emissions. The International Maritime Organization (IMO) adopted a revised strategy in 2023 to reach net-zero by or around 2050, with interim targets of 30% reduction by 2030 and 80% by 2040 (vs. 2008 baseline). For companies with significant ocean freight in Category 4, the emissions intensity of shipping will improve substantially if IMO targets are met - but companies relying on current emission factors for long-term scenario analysis should account for this trajectory by using sector-specific shipping decarbonisation pathways in their projections.
Key Takeaways
- 1Category 4 covers upstream logistics - transport of purchased goods from suppliers to the company in vehicles not owned by the company
- 2The distance-based method (mass x distance x emission factor per tonne-km) is the most widely used approach, using data from logistics bills
- 3Air freight emits 50-100x more per tonne-km than ocean shipping - mode selection is the most powerful Category 4 reduction lever
- 4Third-party warehousing emissions are also included, calculated from floor space, storage duration, and facility energy intensity
- 5Practical reductions come from mode shifts, supplier nearshoring, load consolidation, and route optimisation to minimise empty return legs