Decarbonising industries by ANZSIC code

Decarbonisation is the process of reducing and ultimately eliminating net greenhouse gas (GHG) emissions. This involves a multifaceted approach: stopping unnecessary or redundant activities, increasing energy efficiency, adopting zero or low-emission energy sources, and implementing carbon sequestration techniques for residual GHG emissions as a last resort. The goal is to achieve ‘net zero’ – a state where the amount of GHG emissions produced is balanced by the amount removed from the atmosphere.

Several methods exist for decarbonising (aiming for net zero emissions) your business, and they can best be categorised into four approaches, as shown below.

Scope 1, 2 and 3 GHG emissions definitions

When thinking about decarbonisation, it is helpful to start by baselining the different GHG emissions sources in your operations to understand where you can exert influence.

Scope 1

Direct emissions: These typically occur from sources owned or controlled by your business and may include diesel or gas consumed on-site to create energy, the fuel used on the business's vehicles, emissions from chemical or biological processes, and emissions from unintended leaks.

Scope 2

Indirect electricity emissions: Account for the emissions associated with your consumption of purchased electricity, heat, or steam. These emissions typically occur at the facility where the electricity is generated from coal, gas or other fossil fuels.

Scope 3

Other indirect GHG emissions: All other indirect emissions that are a consequence of the activities of the company but occur from sources not owned or controlled by the company.

They are divided into:

  • Upstream emissions - related to purchased or acquired goods and services
  • Downstream emissions - related to sold goods and services.

 

The approach an organisation takes to decarbonise their operations may be determined by several factors, not limited to:

  • The complexity and emissions intensity of their value chain
  • The relative proportions and prioritisation of emissions from each scope
  • The energy-consuming activities, equipment and fuel sources used in operations
  • The technical and commercial maturity of available technology for reduction methods
  • The upfront investment required
  • The strategic objectives to be achieved by decarbonisation.

Overview of GHG Protocol scopes and emissions across the value chain


(Click on the image to enlarge) 

Each organisation’s decarbonisation journey is unique. However, being aware of common approaches relevant to your sector may help fast-track your efforts and can be adapted to support the transition. Below is a handy guide of suggestions for reducing GHG emissions, categorised by Australian and New Zealand Standard Industrial Classification (ANZSIC) sector code, which could be integrated into your organisation’s decarbonisation plan.
 

Download Guide
 

How can BDO help

Organisations in Australia may face unique challenges in their decarbonisation journey. As a large country historically reliant on emission-intensive industries, meeting the ambitious targets set for 2050 will undoubtedly be a challenge. Here’s where BDO can help:

  • Expertise: We have a large and diverse team of local and global experts, ready to put their knowledge and wealth of experience to work for you
  • Rigour: We work with organisations to provide a level of rigour around processes and targets
  • Support: We can assist you at any stage of your progress, provide an end-to-end solution, and be your trusted adviser throughout this journey.

Please contact our sustainability team to learn more about how we can help you on your decarbonisation journey.