Steering towards circularity is rewarded even more in version 4.0 of the CO2 Performance Ladder than in version 3.1. This makes circular choices more attractive for you as a certificate holder. In this blog, we explain what circularity is and how you can incorporate it using version 4.0 of the Ladder.
Circularity and CO₂ reduction are inextricably linked. Circularity mainly concerns the reuse of raw materials, materials or products. Working in a circular way means that raw materials retain their value because ‘waste’ is considered the basis for a new product. Using fewer new raw materials and products benefits both people and the environment: it prevents pollution, poor working conditions during resource extraction and production, and CO₂ emissions.
Circularity can also relate to how renewable a resource is. Wood is a good example. Instead of emitting CO₂ during production – as is the case with concrete and steel – wood actually stores CO₂. With a sustainable design, a wooden structure can store that CO₂ for a long time. Due to these benefits, wood is increasingly used as a sustainable alternative to concrete and steel.
In the context of circularity and the circular economy, the waste hierarchy is an important reference point. This distinguishes six forms of circularity, and the preference order:
Even with circular practices, CO₂ emissions still occur, for example, through transport, processing, or modification of materials. The more sustainable these processes are, the lower the emissions. Despite these emissions, circular practices almost always lead to a net CO₂ reduction over the long term compared to using non-renewable resources or new materials.
The CO₂ Performance Ladder can support your efforts in circular entrepreneurship. The Measure list includes various circular actions that lead to CO₂ reductions, aimed at reducing emissions up to 2050. Furthermore, you are encouraged to consider emissions outside your value chain that you can still influence, referred to as Other Influenceable Emissions (OIE).
Taking circular measures can lead to CO₂ reductions. For example, reusing materials like concrete, paving stones, and asphalt results in lower scope 3 emissions because no (or less) new production is required. By extending the lifespan of a material or product, CO₂ emissions are spread out over a longer period. This CO₂ benefit can be included in your carbon accounting system. This was already possible in version 3.1 and remains the case in version 4.0.
A new feature in version 4.0 of the CO₂ Performance Ladder is that you are also rewarded for circular choices that reduce emissions outside your direct value chain: Other Influenceable Emissions (OIE). By giving materials a second life or storing CO₂ through the use of wood, you help ensure that another party emits less or no CO₂. Although these avoided emissions cannot be included in your CO₂ bookkeeping, they can be reported under OIE.
There are various ways in which circular choices can influence emissions outside your value chain. Some examples:
If your company is active in earthworks or demolition, you need to determine what to do with released raw materials generated by your activities. You could dispose of or burn them, but from an OIE perspective, you could also look for parties that can reuse the soil, concrete, or steel.
In previous versions of the CO₂ Performance Ladder, this approach was disadvantageous to your accounting because it added steps like transport and processing resulting in more emissions in scope 1, 2, or 3. Thanks to the inclusion of OIE, finding a circular destination is now rewarded, as actions are also evaluated for their impact outside the scopes.
Architects and engineering firms are now more rewarded for circular decisions thanks to OIE. For example by designing buildings and structures with renewable materials or materials that can be reused after their initial purpose is complete. But it’s not just about materials. How something is built also plays a role. Modular design, for instance, makes it easier to disassemble and reuse a structure after use.
Other Influenceable Emissions (OIE) are emissions that, according to the GHG Protocol, fall outside scope 1, 2, or 3 for the organisation. This is because they are short-cycle, like biogenic emissions, or occur outside the organisation’s value chain. If the organisation can significantly influence these emissions, they are still relevant for contributing to global climate neutrality.
OIE includes three types:
Note: CO₂ compensation is explicitly not part of OIE.
This blog provides more information about Other Influenceable Emissions (OIE).
Step 1 imposes limited circularity requirements, as it only focuses on your own direct emissions (scopes 1 and 2). Circular measures are mentioned in the measures list, but you are not yet expected to take action.
In Step 2, you look beyond your own direct emissions and are required to indicate which circular measures you take. However, you’re not yet required to calculate the exact CO₂ reduction outside your value chain.
In Step 3, you again indicate which circular measures you take, but now you do have to calculate the CO₂ benefit. For example, by showing what it saves when renewable materials are used in a design. The Ladder provides several methods for quantifying these emission savings.
This blog provides more information about the requirements for Steps 2 and 3 regarding OIE, including a video of the related webinar.
The CO₂ Performance Ladder is a valuable tool for steering towards circularity. Using reclaimed materials, choosing materials that store CO₂, or finding new destinations for materials from your project all significantly contribute to reducing emissions. In version 4.0 of the Ladder, you are rewarded for this through the introduction of Other Influenceable Emissions (OIE).
If you have any questions about the CO₂ Performance Ladder, please contact SKAO.
More and more organisations certified under the Ladder are embracing circularity. One example is Dura Vermeer, one of the largest construction companies in the Netherlands. In this case study, Eldar Biro of Dura Vermeer shows how the company applies circular practices, including through a materials marketplace and circular hubs.
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