Calculating and Distributing Scope 1, 2, and 3 Emissions Using Business Activity Forms and Allocation Schemes

Objective

After completing this lesson, you will be able to calculate and distribute scope 1, 2, and 3 emissions using business activity forms and allocation schemes.

Process Flow: High Level

This process flow represents a comprehensive, systematic approach to carbon accounting, ensuring accurate measurement, allocation, and reporting of an organization's greenhouse gas emissions.

The process flow outlines a comprehensive approach to carbon emissions calculation using business activity forms and allocation schemes.

You begin the process with setting up the foundational elements by uploading master data to define organizational boundaries and scope.

In the next steps, you define operational boundaries, including business activities and direct emissions sources. Then incorporate emission factors. You can either upload new packages or reuse existing ones, such as the United States Environmental Protection Agency (EPA) emission factor package.

Next, create business activities for different scopes (1, 2, and 3) and locations.

Then, create allocation schemes to distribute emissions across various business activities and products.

When these steps are complete, start the periodic inventory calculations. In the final stages, ensure data readiness and review the results in CO2 equivalents.

This figure diagrammatically illustrates the process of setting organizational boundaries, defining scopes, uploading emission factor packages, creating business activity sub-categories, and conducting periodic inventory calculations to obtain emissions data in CO2 equivalents.

Process Flow Deep Dive

Step 1: Upload master data

In the first step, you input fundamental information about the organization. You define the company structure, identifying all relevant locations (such as offices, factories, warehouses), and set the organizational boundaries. This step is crucial as it determines the scope of operations for which emissions will be calculated and reported.

Step 2: Define footprint inventory scope

In this step, you identify all business activities that contribute to emissions, create an inventory of products, list direct emission sources and energy consumption points. This step essentially outlines what will be measured and reported in terms of emissions.

You start with the Manage Footprints Inventory Scope application.

This figure shows a user interface for managing source data, specifically highlighting options like managing footprint inventory scopes, calculation variants, plausibility checks, emission factors, purchased product footprints, and supplier footprints within an SAP platform.

Next, you deep dive into the business activity allocation bakery example.

This figure displays the SAP interface for managing footprint inventory scopes, listing seven scopes with details such as ID, description, periodicity, assigned company, and validity dates.

Upon clicking bakery, you can see that to define the footprint inventory scope, all the relevant value chain steps are selected which are related to manufacturing a product. You can also see that the forms related to "Waste Generated in Operations" and "business Activities" are activated.

This figure demonstrates the selection of various value chain steps for footprint calculation within a bakery business context, along with activated GHG data forms for waste generated in operations and business activities, highlighting scope and data collection guidance.
Step 3: Upload emission factor packages

Emission factors are crucial for converting activity data into actual emissions. You can either upload your own emission factor packages (if you have industry-specific or more accurate data) or use standard packages such as those provided by the Environmental Protection Agency (EPA).

Step 4: Create Business Activity

In this step, you categorize emissions according to the Greenhouse gas (GHG) Protocol scopes and create business activities for scope 1, 2 and 3 categories.

In the Manage Business Activities application, click on Create and fill the Business Activities Details such as ID, Description, Plant, GHG category, Validity Period. In addition, fill in the details for emission factors such as Preferred Footprint Type, and so on.

You can create the business activities for various locations and plants as shown in the screen below.

This figure shows a screenshot from a SAP interface for managing business activities, listing various activities, their plants, GHG categories, and validity dates.

Note

You have learned about the detailed steps to create a business activity in the Unit 2 of Beginner Learning Journey Establishing Corporate Carbon Footprint Emissions with Simple Configuration.

Step 5: Use a rule-based approach for allocating business activity emissions to products and resources

In this step, you create allocation schemes for different locations and define rules for how emissions from various business activities (sender nodes) are allocated to products (receiver nodes).

Alternatively, you can choose a resource in your allocation rules to distribute emissions from a business activity to that resource and use the service confirmation transactional data of the resource to correlate the emissions to a production document.

Step 6: Start the periodic inventory calculation

In this step, you initiate the actual calculation process. You use the previously defined scope and apply the relevant allocation schemes to calculate emissions for each location or plant.

Step 7: Check data readiness

Before finalizing calculations, you conduct a data readiness check to ensure all the required input data is available. Once verified, initiate the periodic inventory calculation.

Step 8: Review calculation results

Finally, you analyze the calculated results. Emissions are typically expressed in CO2 equivalents, allowing for a standardized comparison across different greenhouse gases.

Use a Rule-based Approach for Allocating Business Activity Emissions to Products and Resources

Let us start by looking at an example. In the Manage Footprint Calculations application, click on Calculate Footprints.

This figure shows a dashboard from SAP with various options for managing and analyzing corporate and product footprints related to transport, including calculating footprints, recording GHG data, and managing business activities.

Select Bakery with New Allocation.

This figure displays a SAP interface showing the status of product footprint inventories, including calculated results, review status, footprint inventory scope, and periods, highlighting entries with errors or warnings.

You can view that we have used a combination of energy flow model and allocation scheme.

This figure displays the Organizational Footprint Inventory for a bakery with new allocation, showing the calculation status as successful and detailing the allocation scheme and energy flow model for the Amaka Bakery Munich plant for December 2024.

Now, if you go to the Data Readiness tab, you can view that we use Business Transaction Data, Energy Bills and Meter Readings, and Form-Based Data Collection for calculating the carbon emissions.

This figure displays the SAP Organizational Footprint Inventory with a successful calculation status for December 2024, showcasing data readiness across business transactions, energy bills, and emissions, with 100% completion in essential areas.

Note

There are no Manual Emissions as Manual Emissions are zero.

We now use the Allocation Scheme ‘New Allocation with Business Activities and Waste Types’ to distribute the emissions to the product.

This figure shows an SAP application interface for a bakery's organizational footprint inventory, indicating successful calculation for the period of December 2024 with specific allocation schemes and energy flow models.

Select the Manage Allocations application.

This figure displays a dashboard from an SAP system featuring options for managing facilities and source data, including allocations, master data import, footprint inventories, calculation variants, and more within corporate and transport sectors.

You can view that for the defined scope, the plant B5100 is linked to the ‘New Allocation with Business Activities and Waste Types’ allocation scheme. Click on the plant details.

This figure shows a SAP interface for managing allocation schemes for different plants, with two allocations listed for Almika Bakery Munich and one for Almika Steel Plant, all with a Released status.

You can view that three allocation rules are created for the plant to allocate the emissions from direct emissions, fugitive emissions and waste emissions.

This figure displays an SAP Allocation Scheme titled New Allocation with Business Activities and Waste types, detailing specific allocation rules for a bakery plant, with the scheme set to be valid indefinitely starting January 1, 2024.

For each allocation rule there will be a unique sender node which is a business activity.

This figure shows the SAP Allocation Rule interface for setting up a new allocation of direct CO2 emissions to an oven, categorized under Scope 1 Process Emissions, with validity from January 1, 2024, to December 31, 9999.

Watch the following video to learn how to use a rule-based approach for allocating business activity emissions to products and resource.

You know that a form is used to collect the business activity emission and then we use the allocation scheme and allocation rule to distribute this business activity emission to a resource, process infrastructure and product.

Now, you have now learned to use a rule-based approach for allocating business activity emissions to products and resource.

Watch the following video to recap how to use a rule-based approach for allocating business activity emissions to products, process infrastructure and resource.

Apply the Relevant Allocation Schemes to Calculate Emissions for each Location or Plant

In this section, you will learn to apply the relevant allocation schemes to calculate emissions for each location or plant.

Go to the calculate footprints application. Search for the plant ID and then click on Go.

You link the relevant allocation schemes to calculate emissions for each location or plant and trigger the periodic calculation. After the calculation status displays Calculated Successfully, you can access the results by clicking on Show Results.

This figure displays a successful calculation status for the organizational footprint inventory of a bakery, specifically for December 2024, with detailed administrative and plant settings information.

Click on Chocolate Cake.

This figure provides an overview of the carbon footprints associated with various organizational and product items for December 2024, displaying their status, item type, and total CO2e emissions in tons.

You can view that the total emissions for the chocolate cake is 3.64 tons. You understand that the total carbon emissions for chocolate cake arise from the various production documents. In addition to that there are two allocations, one is Food Waste and second is Packaging Waste which are directly linked to the product.

This figure illustrates the carbon footprint report for Almika Bakery Munich's chocolate cake production in December 2024, showing a total CO2e output of 3.64144 tons, with a detailed breakdown of input emissions and waste allocations.

Let us investigate the production document, 1316. You can view that the production order 1316 was used in a chocolate assembly, and it also had some goods issue to production, which are dark chocolate and biscuit.

So, the emissions from raw materials went into the production order, and as the chocolate cake is produced from the production order, these emissions also went to the chocolate cake.

Note that the production order also has a service confirmation in the chocolate assembly.

This figure shows the carbon footprint of Almika Bakery Munich's production for December 2024, highlighting a total CO2 emission of 1.0378 tons, with inputs from dark chocolate, biscuit, and resource usage contributing to the production of chocolate cake.

In the allocation rule, you saw that the direct emissions were allocated to the oven.

This figure illustrates the SAP interface for allocating direct emissions from a business activity (CO2 emission by catalyzer) to a specific resource, the Oven (S001), using a fixed allocation ratio.

The biscuit was baked in the oven.

This figure shows the carbon footprint in terms of CO2e emission contributions from inputs such as dark chocolate, biscuit, and chocolate assembly, used in producing chocolate cake at the Almika Bakery Munich plant in December 2024, with a total output of 1.0378 tons.

If you click on Biscuit, you can view the various production orders for biscuit.

This figure displays a CO2 emission analysis for biscuit production at Almika Bakery Munich in December 2024, detailing input and output contributions in tons and categorizing them by emission levels.

If you enter one of the production orders for biscuit, you can view that the oven is used as a resource in the production of biscuit.

This figure shows the carbon footprint analysis for Production 1291 at Almika Bakery Munich, detailing resource usage and input-output flow for December 2024, with a total CO2e of 0.12003 tons.

When you click on Oven, you can view the business activity for Oven, which is ‘Direct CO2 Emission by Catalysator’.

This figure presents the total CO2 emissions of 0.36927 tons for an oven at Almika Bakery Munich during December 2024, detailing inputs from energy and allocation, and their distribution across various production units.

Note

The Business Activity for oven is ‘Direct CO2 Emission by Catalysator’ in the Allocation Rule, "Allocate direct emissions to Oven’.

This figure displays an SAP interface showing the allocation of direct emissions to an Oven, with detailed information about the allocation rule, sender type, business activities, and receiver allocation ratio.

Now, click the business activity, ‘Direct CO2 Emission by Catalysator’.

This figure details the CO2 emissions for Almika Bakery Munich's oven resource in December 2024, showing a total of 0.36927 tons of CO2e, including energy from the baking oven and direct emissions by the catalyst, with a breakdown of resource usage across various productions.

You can view that 0.2 tons of carbon emissions are allocated to the oven from the business activity, ‘Direct CO2 Emission by Catalysator’.

This figure shows the direct CO2 emissions from a catalyst at Almika Bakery Munich, totaling 0.2 tons, for December 2024, categorized under Business Activity with a publishing status of Cannot Publish.

Then, go to the Input tab, and click the details for the business activity ‘Direct CO2 Emission by Catalysator’.

This figure displays the direct CO2 emission by a catalyst at Almika Bakery Munich, reporting a total of 0.2 tons of CO2 equivalent, with 2 kilograms of CO2e per unit, for December 2024, and indicates the status as successful but unable to publish.

You can see that 100 kilogram of catalysator was used in the production process, so we are allocating 0.2 ton of carbon emissions to 100 kilograms of catalysator used in the oven.

This figure displays a successful business activity related to direct CO2 emissions by a catalyst, detailing the emissions in kilograms and tons, valuation methods, and breakdown values for the Aninka Bakery Munich.

Now, let us move to the Manage Business Activities application.

This figure shows a dashboard for managing various aspects of carbon footprint and emissions, including footprint calculations, facilities, and source data in an SAP environment.

View the details for oven.

This figure displays a list of business activities categorized by ID, description, plant, GHG category, and validity dates within the SAP Manage Business Activities interface.

The business activity, ‘Direct CO2 Emission by Catalysator’, has an emission factor of 2-kilogram carbon equivalent for Scope 1 Process Emissions.

This figure presents you with a screenshot from an SAP system showing the emission factor period settings, including the scope, quantity-based footprint details, emissions factor reference, and administrative details for Almika Bakery Munich's direct CO2 emissions from January 1, 2024 to December 31, 9999.

Now that you have learned how the business activity for the oven is defined, understand that you would have collected the data for the business activity. Go back and click on the Manage GHG Data Collections application.

This figure shows an interface from the SAP system for managing and analyzing carbon footprints, including sections for communication, analysis, and calculation of footprints and greenhouse gas data.

For the relevant allocation, some data was collected in the month of December for the plant B510.

This figure displays the SAP interface for managing GHG data collections, showing various inventory scopes with their recording completion status, including the Bakery (BusAct Allocations) scope marked as completed for December 2024.

Navigate into the details of the Almika Bakery Munich Plant.

This figure shows the GHG data collection status for Bakery (BusAct Allocation) (SF100) for the period from December 1, 2024, to December 31, 2024, indicating 100% completion for plant and business activities.

You can view that there are three business activities, namely ‘Direct CO2 Emission by catalysator’, ‘Refrigerant R22’ and ‘Refrigerant R410A) for which we collected data through the form.

This figure displays a completed GHG Data Form for Almika Bakery Munich (B5100) covering business activities between December 1 to December 31, 2024, with details on process and fugitive emissions totaling CO2 equivalent amounts.

You have already seen that 0.2 tons of carbon emissions are 100% allocated to the oven using the allocation rule.

This figure provides an overview of the direct CO2 emissions, totaling 0.2 tons, from the catalysator at Almika Bakery Munich during the December 2024 period, indicating a high CO2e allocation for the business activity Oven within SAP's footprint analysis tool.

Now, you will learn to use the service confirmation transactional data of the resource to correlate the emissions to a production document.

This figure displays the CO2e footprint of an oven at Almika Bakery Munich for December 2024, showing a total emission of 0.36927 tons with allocation from gas and direct CO2 and its usage across various production instances.

If you go into one of the production documents, say 1309, you can see the output is biscuit.

This figure shows a production report from SAP for the Almika Bakery Munich, detailing the carbon footprint of product items in December 2024, with biscuits resulting in 0.09709 tons of CO2 emissions.

This biscuit was given as an input or goods issue to another production document.

This figure displays the CO2e emissions associated with the production and output of biscuits at Almika Bakery Munich during December 2024, quantifying a total of 0.48655 tons of CO2e and 3.28749 kilograms of CO2e per unit, with the production being ready for publication.

That production document was used in the production of cake.

This figure from SAP illustrates the carbon footprint of Almika Bakery Munich's chocolate cake production in December 2024, totaling 1.0378 tons of CO2e, detailing input sources such as dark chocolate and biscuits, and showing the resource usage for chocolate assembly.

Going back to the oven, understand that the production orders for biscuit had a service confirmation for the resource oven.

This figure illustrates the CO2 emissions associated with producing biscuits at the Almika Bakery Munich, highlighting that the process generates a total of 0.09709 tons of CO2 equivalent emissions.

If you click on the Input tab, you can see that the oven was used for 81 minutes. So, for 81 minutes, whatever amount of emission was released by the oven went into the production document for biscuit.

This figure shows the SAP item footprint for Production 1309 at Almika Bakery Munich for December 2024, indicating its successful status and displaying resource usage of 81 minutes each for two ovens with a total CO2e emission of 0.09709 tons.

Note

There are two ovens which means when you see the service confirmation, ovens are not just indicated at resource level but at business activity level in ovens. For one activity oven is used at 120 degrees Celsius, while for the other activity, oven is used at 170 degrees Celsius.

If you go back to the Overview tab, you can see that the emission from oven is 0.36 tons.

This figure represents the carbon footprint for bakery production item 1309, showing input and output CO2 emissions, totaling 0.09709 tons for a successful production at Almika Bakery Munich from baking mixture and oven usage, but cannot be published.

Of the total 0.36 tons emission from the oven, 0.2 tons of emissions come from the business activity, ‘Direct CO2 Emission by Catalyser’, and 0.16 tons from the gas meter, indicating that the oven used some gas as well.

This figure illustrates the CO2e input and output levels associated with an oven at Almika Bakery Munich for December 2024, detailing the energy inputs from a gas meter and direct CO2 emissions as well as the distribution across various production units.

You have now learned to allocate direct emissions to a resource, in our case, an oven.

Watch the following video to recap how to allocate direct emissions to resources.

Let us now see how to allocate fugitive emissions to the process infrastructure.

This figure shows an SAP interface detailing a new allocation scheme for Almika Bakery Munich, highlighting three allocation rules based on fixed allocation ratios for emissions and waste from Jan 1, 2024, to Dec 31, 9999.

Let us go back to the chocolate assembly, you can see that a cooling system and electricity meter are used as input in the chocolate assembly.

This figure shows the input and output CO2 emissions for the Almika Bakery Munich's chocolate assembly process in December 2024, with a total of 1.79129 tons CO2 generated, a breakdown of energy sources, and specific production outputs.

If you further investigate the cooling system, you can see that emissions are coming from refrigerant gasses R22 and R410A into the cooling system. Now, this emission of refrigerant gasses is a business activity.

This figure shows the carbon footprint of the cooling system at Almika Bakery Munich, indicating a total CO2e of 1.61359 tons for December 2024, and detailing the input sources, including electricity and gas meter for cooling, along with refrigerant allocations, with outputs directed to chocolate and fruitcake assembly.

When you click on the refrigerant gas R22, you can see that 0.3110 ton of emissions are 100% allocated to the cooling system as the business activity is directly related to the cooling system.

This figure shows the carbon footprint calculation for Refrigerant R22 at Almika Bakery Munich, amounting to 0.31 tons of CO2e for the period December 2024, with a CO2e per unit of 1,550 kilograms per cubic meter.

Now, go back and look at the allocation rule for fugitive emissions.

This figure displays an SAP Allocation Scheme for Almika Bakery Munich, detailing allocation rules and administrative details, valid from January 1, 2014, to December 31, 9999, and marked as released.

You notice that the allocation ratio for the refrigerant gasses R22 and R410A is 1, indicating that all the emissions coming from R22 and R410A guess gets distributed to the cooling system.

This figure displays an SAP interface for allocating fugitive emissions of coolant to a cooling system, detailing allocation rule information, sender and receiver data, and administrative details.

From the cooling system, cool air is being consumed as a carrier into the chocolate assembly. In addition, note that for the cooling system there were emissions being allocated from the business activity and the energy flow model.

This figure displays the CO2e emissions from the cooling system of the Almika Bakery Munich's process infrastructure for December 2024, highlighting the input sources (electricity, gas, and refrigerants) and output items (chocolate and fruitcake assembly), with a total CO2e footprint of 1.61359 tons.

So, 1.5 tons of emissions come from the cooling system into the chocolate assembly.

This figure shows the CO2 emissions breakdown for the chocolate assembly at Almika Bakery Munich, indicating a total CO2 emission of 1.79129 tons predominantly influenced by the cooling system and tracked via energy resource usage over December 2024.

Now you have learned to allocate fugitive emissions to the process infrastructure.

Watch the following video to recap how to allocate fugitive emissions.

Let us learn to allocate waste in operations to the product.

This figure shows an SAP interface for a new allocation scheme with business activities and waste types at Almika Bakery Munich, detailing allocation rules with fixed allocation ratios for emissions and waste, and administrative information.

Let us go back to the chocolate assembly, you can see that the emissions from Food Waste and Packaging Waste also enter the chocolate assembly.

This figure displays the carbon footprint of chocolate cake production at Almika Bakery Munich, indicating a total CO2e of 3.64144 tons for December 2024, with contributions from production and waste sources.

Navigate to the Manage Waste Footprints application.

This figure shows a dashboard layout from SAP, featuring various options for managing facilities and source data, such as energy flows, allocations, and waste footprints.

Click on the details for packaging waste treated with Landfill.

This figure displays a waste footprint management screen in SAP, showcasing various waste types, treatment methods, regions, validity periods, emission factors, and references.

You can see that if one euro is spent to dispose the packaging waste in landfill, it creates 0.18 tons of emission.

This figure displays a SAP Waste Footprint dashboard providing emission details for Packaging Waste, indicating 0.1857 kgCO2e per Euro spent, sourced manually, for a validity period from December 1, 2023, to December 31, 9999, with the total CO2 emission being 0.1857 kilograms.

Similarly, if you check the details for food waste treated with landfill.

This figure shows a SAP interface for managing waste footprints, detailing different waste types, treatment methods, country/region, and emission factors associated with each.

You can view that for 907.16 kilogram of food waste disposed in landfill, 670 kilogram of carbon emission is generated. This is where we also link the emission factor to the waste type.

This figure shows the calculation of CO2 emissions from food waste in Germany, with a waste quantity of 907.184 kg resulting in 670 kg of CO2 emissions using the landfill emission factor.

Go back to the GHG Data Collections app and navigate into the form details for Waste generated in operations to view the various waste generated for the plant.

This figure presents the SAP GHG Data Collection overview, showing completed data recording for Aimka Bakery Munich, covering business activities and waste generated in operations for the period of December 1, 2024, to December 31, 2024.

From the various line items, food waste and packaging waste is related to the chocolate assembly. You can view that the food waste is 50 kilograms, 100 euros is spent on incinerating packaging waste, 30 euros is spent on treating packaging waste via landfill and 50 euros is spent on recycling the packaging waste.

This figure displays the waste generated at Almika Bakery Munich in December 2024, categorized by waste type and method with recorded amounts, all marked as completed.

You can notice that for the 50 kilograms of food waste, 0.022 tons of carbon emission is generated and distributed to the chocolate assembly.

This figure shows the carbon footprint of producing chocolate cakes at Almika Bakery Munich for December 2024, with a total CO2e of 3.64144 Tons, highlighting inputs, outputs, and waste contributions.

Now this carbon emission of food waste comes through the waste specialized form.

This figure shows the food waste data for Almika Bakery Munich in December 2024, indicating a total of 0.03693 tons of CO2e emissions from 0.03693 tons of waste processed through landfill, allocated between chocolate and strawberry cakes.

Now, for this waste in the allocation rule, the allocation ratio of 40 was given to strawberry cake and an allocation ratio of 60 was given to the chocolate cake. This implies that of the total waste coming from food and packaging, 40 percent waste is allocated to strawberry cake and 60 percent waste is allocated to the chocolate cake.

This figure from SAP shows a waste allocation rule specifying the allocation of packaging waste and food waste between two products, Strawberry Cake and Chocolate Cake, with allocation ratios of 40% and 60%, respectively.

Thus, 40% of 0.36 tons is 0.014 ton which goes to strawberry cake and 60% of 0.36 tons is 0.02 tons which goes to the chocolate cake.

This figure provides an overview of food waste management at Almika Bakery Munich for December 2024, highlighting landfill treatment and output allocation to chocolate and strawberry cakes, with a total CO2 emission of 0.03693 tons.

In the Output tab, you can see the carbon emissions getting distributed for the strawberry and chocolate cake.

This figure displays the food waste allocation for Almika Bakery Munich in December 2024, indicating successful CO2e allocation for chocolate and strawberry cakes leading to a total CO2e of 0.03693 tons and a CO2e per unit of 0.73855 kg per kilogram, with the publishing status marked as Cannot Publish.

You have now learned how to allocate the emissions from direct emissions, fugitive emissions, and waste emissions to a resource, process infrastructure and product.

Watch the following video to recap how to allocate waste in operations to product.

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