The increasing ambitions towards net zero stipulated by the Paris Agreement, the EGD and via voluntary targets from companies, implies that accounting and complying for indirect emissions from Scope 2 and 3 will play an ever increasing role in achieving these pledges. It is also important to mention that most companies, regulated under EU or national obligations, have significant Scope 2, 3 and impact Scope 4 emissions.
From the regulatory standpoint, a holistic view on how Scope 2 and 3 emissions are addressed and accounted for has been lacking. The main directives which currently govern EU’s ambition and corporate compliance are set through Scope 1 emissions.
This fall ERCST launched a new workstream which will gather multiple stakeholders to discuss the role of indirect emissions in decarbonization and compliance. The exploration of this approach will start with flexibility mechanisms such as the role of domestic offsets in the EU ETS, as well as the relationship between EU ETS and Effort Sharing Regulation.