HOUSTON—Scope 3 emissions are widely thought of as the Boogeyman, according to Allyson Anderson Book, vice president of energy transition for Baker Hughes Co.
“People do not want to have to report it. It’s inconvenient. There’s a lot of negativity around that—with some good reason,” she told attendees of Hart Energy’s Energy ESG conference.
However, there are many ways to manage such emissions as the world shifts to a lower carbon economy, she added.
Sometimes called value chain emissions, Scope 3 emissions are defined by the U.S. Environmental Protection Agency as emissions from activities at assets not owned or controlled by the reporting company but that the company indirectly impacts in its value chain. Such emissions typically make up the bulk of an organization’s greenhouse gas emissions.
While Scope 3 emissions are seen as critical in addressing climate change, collecting and managing data, defining value chain boundaries and determining universal reporting methodologies are seen as challenges for the energy sector.
Many companies have been reluctant to disclose that information, Book said, noting fears could include incorrect data, possible penalties by the government or concerns about influencing consumer choices without negatively impacting company profitability.
“Depending on what you’re working on, it’s easier to think a little more about the carbon intensity space with respect to our products,” instead of absolute emissions, Book said.
For Baker Hughes, addressing Scope 3 emissions starts with studying emissions from each product line, working with the people who engineer the products and examining how that product functions in the hands of customers or end-users, Book said. “Once you start to see where the emissions really sit, it actually gives you really good perspective.”
Reducing emissions doesn’t necessarily mean having to spend more money.
“You can energize an employee base to really look for ways of growing margins with stronger operations by being a little bit more responsible in the decisions that you make,” she said. “Removal of carbon can be synonymous with removal of certain costs as well and that any company can materialize. It starts with energy efficiency.”
In the oil field, that could be ensuring there is no methane leakage or switching from diesel to natural gas generators.
Baker Hughes is taking aim at all scopes of emissions, focusing on carbon capture and storage, hydrogen, geothermal energy, integrated power and emissions management as potential growth areas, Book added, noting she is a huge fan of geothermal and its power applications with baseload to avoid intermittency problems.
Speaking to resistance from employees in reporting Scope 1, 2 and 3 emissions, Book shared how sentiment has changed in the last two years as work from home and remote monitoring ramped up. The company started a program in which emissions at employees’ homes were monitored, with their permission, to gauge whether their behavior changed once they learned of savings. It did.
“The resistance is coming down as people understand we’re not trying to phase out fossil fuels. It’s really about finding low carbon solutions.”
Baker Hughes has consistently stepped up its Scope 3 emissions reporting, working from a 2019 baseline that included disclosed travel-related emissions and a subset of its logistics-related emissions. The following year, according to the company’s website, emissions from the capital goods acquisition of property, plant and equipment; an expanded view of international shipping across the Baker Hughes enterprise, waste generated from our operations; and a portion of the use of sold products were added.
A significant ramp-up came in 2021 when the company added purchased goods and services, fuel- and energy-related activities, use of sold products and services, a complete view of upstream and downstream transportation and distribution, employee commuting, a complete view of business travel, waste generated in operations, and investments to its Scope 3 emissions reporting.
That year, Baker Hughes added emissions from use of sold products (Category 11) to its reporting. The move caused its Scope 3 emissions to jump mainly due to Turbomachinery & Process Solutions segment equipment sales, in turn driving the company’s focus on low-emission products and services.
Baker Hughes reported more than 237 million metric tons CO2e in 2021, up from about 180 million metric CO2e. With the exception of emissions from use of sold products, waste generated in operations and investments, emissions from other Scope 3 categories dropped.
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