Identifying critical transmission sectors by a new approach: Intermediate-based accounting

Identifying transmission sectors that may not be revealed by existing indicators, such as production-based emission (PBE) and consumption-based emission (CBE) accounting, is significant in emission reduction policies and provides insights into novel opportunities for companies and industries to reduce emissions. This study proposed an intermediate-based emission (IBE) accounting approach that considers indirect emissions from intermediate goods production and a case study was conducted using Exiobase 3.8. The highest IBE sector was ‘basic iron’ (1131 Mt-CO₂), and the sector's IBE was higher than its PBE (1052 Mt-CO₂). Additionally, the material sector, such as aluminum products (326 Mt-CO₂), was identified as a key transmission sector, although PBE (21 Mt-CO₂) and CBE (3 Mt-CO₂) of the sector is very low. In addition, IBEs were observed to be closely related to overall supply chain emissions in Germany, Japan, and Asia, and cooperation is required to reduce the emissions. The method enables approaching supply chains with large emissions from three perspectives (production-, consumption-, and intermediate-based accounting) and exploration of the emission reduction responsibilities of the three key sectors. The utility and discussion of the approach are consistent with Scope 3 emissions and facilitate fair allocation of emission reduction responsibilities to a larger number of countries and industries.