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AEM publishes Scope 3 Category 11 GHG emissions reporting guidance for off-highway OEMs
11 February 2024
The guidance is intended to promote consistency in reporting.
Environmental, social and governance (ESG) reporting offers many benefits to equipment OEMs. In a Wolters Kluwer blog post entitled 鈥�,鈥� Fabrizio Tocchini and Grazia Cafagna said ESG reporting helps organizations 鈥渟hine in the eyes of [the] public, stand above the competition and attract investors and financing.鈥�
Nonetheless, ESG reporting can be challenging, particularly when it comes to greenhouse gas (GHG) reporting throughout the value chain for manufacturers. As such, the Association of Equipment Manufacturers (AEM) to help OEMs monitor, track and report Scope 3, Category 11 emissions as defined by the Greenhouse Gas Protocol.
Curt Blades, senior vice president of Agriculture Services & Forestry for AEM, said that in reviewing guidance published by the Greenhouse Gas Protocol, Scope 1 and Scope 2 emissions reporting seemed typically straightforward for OEMs. Scope 3, however, was not.
Addressing Negative Perceptions About Equipment Emissions
In addition to getting OEMs to agree to an approach for emissions reporting, the Association of Equipment Manufacturers (AEM) also works to alter public perceptions about off-highway equipment emissions. Curt Blades, senior vice president of Agriculture Services & Forestry for AEM, saw first-hand the disconnect that still exists between what diesel emissions are today in a Tier 4 Final/Stage 5 world and what they once were.
鈥淟ast year, we had a celebration of construction on the National Mall,鈥� he said. 鈥淲e brought a bunch of construction equipment and parked it on the National Mall. It was to talk to the public, to the regulators and policymakers. [It was] wildly successful, because it鈥檚 fun to see kids try crawling up into bulldozers and excavators 鈥� it鈥檚 just awesome. And their eyes get really big.鈥�
Blades said AEM distributed bulldozer coloring pages to the children at the event. He was surprised by something he saw on most of the completed pages. 鈥淪o many of these kids put black smoke coming out of the bulldozer. And the irony 鈥� a bulldozer produced in the last 20 years does not produce black smoke. In fact, bulldozers today don鈥檛 even have smokestacks. So it鈥檚 like, that perception is these kids probably have never seen a bulldozer with black smoke. But in their minds, bulldozers have black smoke.鈥�
He added that the cleanliness of diesel emissions extends to commercial vehicles, as well. 鈥淰olvo over-the-road trucks do not have smokestacks,鈥� Blades said. 鈥淧eterbilts do. But it鈥檚 all for aesthetics. Trucks are cool when they have smokestacks.鈥�
Countering this perception of 鈥渄irty diesel engines鈥� is a priority for AEM. 鈥淲e love telling this, because we鈥檙e doing great things,鈥� Blades said. 鈥淏ut we鈥檙e having to overcome this long-standing perception. It鈥檚 there. We can鈥檛 deny that it鈥檚 there. We just have to do our best to do great things every day, which we continue to do.鈥�
鈥淪cope 3 was really fuzzy,鈥� he said. 鈥淲hat we quickly realized 鈥� it was very fuzzy because the laws were very specific about, how do you treat things such as end of life? The Greenhouse Gas Protocol was written by folks that may not be completely familiar with the off-road equipment market and the heavy industrial equipment market. We recognized that you may have an engine that could last 50 years. It鈥檚 been remanufactured multiple times throughout that 50 years. Well, there鈥檚 no provision for that in the Greenhouse Gas Protocol.鈥�
The lack of definition around this often led to inconsistency in reporting. 鈥淲e had some members who were saying that鈥檚 considered a brand-new engine when it鈥檚 been remanufactured,鈥� Blades said. 鈥淲e had other members say, well, we wouldn鈥檛 consider that to be a new engine.鈥�
Given that the greenhouse gases produced by an engine over its entire 50-year lifespan are different than those produced by something having only a three-year lifespan, it was important to ensure that all equipment OEMs 鈥� from large companies such as Caterpillar and John Deere down to smaller manufacturers 鈥� were 鈥渦sing the exact same formula and the exact same definitions,鈥� Blades said.
AEM said the guidance document 鈥渁lso helps create harmonized product definitions, value chain GHG boundaries, emissions calculation principles, as well as the verification process of measurement and reporting.鈥�
Blades said AEM鈥檚 mission is to align the industry. 鈥淏ecause we all want to do what鈥檚 right,鈥� he said. 鈥淲e have a history of 125 years of doing what鈥檚 right. But the regulations and the guidance and all of that kind of public sentiment is coming so fast that we鈥檙e doing our best to catch up and make sure that we鈥檙e all telling the story in the same way.鈥�
In developing its guidance document, Blades said AEM worked to ensure it would have the best chance of being officially recognized by the Greenhouse Gas Protocol as a 鈥渂uild-on鈥� document.
鈥淭he way the Greenhouse Gas Protocol works is, there鈥檚 a set of frameworks that we can work with, and then there is a build-on process,鈥� he said. 鈥淭his document is currently being applied for as a build-on. So we鈥檒l work within the framework, and then we are seeking that stamp of approval.鈥�
He added that AEM adopted much of that same language as that used by the Greenhouse Gas Protocol in writing its guidance document.
According to Blades, the Scope 3, Category 11 guidance document is not the only ESG reporting item the AEM intends to publish.
鈥淲hether it鈥檚 a guidance document like this, that鈥檚 pretty prescriptive because it鈥檚 very specific, or whether it is a position paper that we as an industry can use to tell our story, or whether it鈥檚 a consistent reporting tool, if you will, for ESG, all those things kind of fall in line of the things that we can do,鈥� he said.
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