Does buying a new machine go in Scope 3 Category 1 or Category 2, and in which year?

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Senseible · Accepted Answer

A machine you capitalise as a fixed asset goes in Category 2, capital goods, with all its cradle-to-gate emissions in the year you acquire it. Parts, tools and consumables you expense go in Category 1. Follow your own accounts: the GHG Protocol tells companies to use their financial accounting treatment to draw the line. The Scope 3 Standard defines capital goods as final products with an extended life that a company uses to make products or provide services, and tells companies to follow their financial accounting: if it is capitalised in the fixed asset register, it is Category 2; if it is expensed, it is Category 1. New CNC machine, press, compressor, boiler, forklift: Category 2. Replacement motor or gearbox that you capitalise: Category 2; if expensed as repairs: Category 1. Cutting tools, dies you write off in the year, lubricants, spares: Category 1. Building and civil works for a new shed: Category 2. A machine taken on lease rather than bought: not Category 1 or 2; Scope 1 and 2 or Category 8, depending on your boundary approach. The year of acquisition, in full. It is not spread over the asset's life as depreciation would be. If a machine is delivered in March and installed in May, use the date it is recorded as acquired in your accounts, and apply that rule every year. A large purchase can make Category 2 jump in one year and fall the next. Report it as it is, explain the purchase in a note, and keep it out of any intensity metric you use to show operational improvement, or show that metric both with and without it.