GHG Emission Calculations in Steel: Scope 1, 2 and 3

Owners and general contractors now ask for construction greenhouse gas emissions figures on every major steel package, and the numbers from suppliers rarely line up: one covers the mill only, another adds transport, a third quotes short tons while the LEED consultant needs metric tons. GHG emission calculations exist to make those figures comparable, and this guide explains how they work for structural steel.

It covers CO2-equivalent (CO2e) arithmetic, Scope 1, 2 and 3 emissions for a fabricator, how to calculate Scope 3 emissions for a steel package, defensible emission factors, and what LEED, Buy Clean and parent-company greenhouse gas reporting expect.

GHG emission calculations multiply activity data (fuel burned, electricity purchased, steel bought) by an emission factor to give emissions in CO2-equivalent (CO2e), using global warming potentials to convert methane, nitrous oxide and other gases into the equivalent mass of carbon dioxide. The formula is simple; the work lies in boundaries, data and defensible factors.

Two frameworks govern that work. The GHG Protocol Corporate Standard defines the scope structure most companies report against and covers the seven Kyoto Protocol gases. ISO 14064-1:2018 sets requirements for quantifying and reporting an organization’s emissions and removals, grouping direct and indirect emissions into categories that map closely to the GHG Protocol scopes.

An organizational GHG inventory covers a company’s annual emissions across its operations and value chain; a life cycle assessment covers one metric ton (1,000 kg, about 2,205 lb) of a fabricated product from cradle to gate or cradle to grave. Our guide to life cycle assessment in steel construction takes the product view; this article takes the inventory view and the point where they meet: the embodied carbon of purchased steel.

The GHG Protocol sorts emissions into three scopes so that no two companies count the same ton within one scope.

Scope 1: Direct Emissions

Scope 1 covers sources the fabricator owns or controls: natural gas or propane burned in heaters, paint ovens and preheating; diesel in forklifts, cranes and company vehicles; carbon dioxide released from CO2-bearing shielding gas in welding, small yet reportable; and fugitive refrigerant losses.

Scope 2: Purchased Energy

Scope 2 covers purchased electricity, steam, heat and cooling: for most shops, the power behind saws, drill lines and welding. The GHG Protocol Scope 2 Guidance defines a location-based method, using the average emission rate of the local grid region (EPA’s eGRID data in the U.S.), and a market-based method reflecting contractual instruments such as renewable energy certificates. Report both; an owner needs to know whether a low number reflects a clean grid or a purchased certificate.

Scope 3: Value Chain Emissions

Scope 3 covers everything else, in fifteen categories defined by the GHG Protocol Scope 3 Standard. For a fabricator the relevant ones are purchased goods and services (category 1: steel, bolts, consumables), upstream transportation (category 4: mill to shop), waste generated in operations (category 5), downstream transportation (category 9: shop to site) and end-of-life treatment of sold products (category 12).

Purchased steel is usually the largest share of a fabricator’s footprint, because making a metric ton of steel takes far more energy than cutting, drilling, welding and coating it; category 1 normally exceeds Scope 1 and 2 combined, though the margin depends on mill route, grid mix and fabrication intensity.

To calculate Scope 3 emissions for a building’s steel, work at the level of the fabricated package, in five steps.

Step 1. Build the bill of materials by section, grade and mill or heat. From the detailing model or shop drawings, list each item with shape, grade and mass, keep purchased (gross) and installed (net) mass separate because offcuts become scrap under waste, and tie each line to a mill test report and heat number.

Step 2. Choose emission factors in a data-quality hierarchy: first a supplier-specific Type III EPD from the mill that produced the heat, using its cradle-to-gate (A1 to A3) global warming potential per declared unit, usually one metric ton; then an industry-average EPD such as AISC’s industry-wide EPDs for fabricated hot-rolled sections, HSS and plate; and generic database factors only as a last resort. Electric arc furnace (EAF) steel made largely from recycled scrap generally carries a lower factor than blast furnace steel from iron ore, so the route behind a factor matters.

Step 3. Add transport: mass times distance for each leg (mill to shop, shop to site) in short ton-miles or tonne-kilometres, times a truck, rail or barge factor from EPA’s GHG Emission Factors Hub.

Step 4. Allocate fabrication energy: the shop’s Scope 1 fuel and Scope 2 electricity for the period, divided by tons processed, times the package tonnage. If Step 2 used a fabricated-product EPD, fabrication is already inside A1 to A3, so do not add it twice.

Step 5. Report kg CO2e per metric ton and a project total, stating the boundary: cradle to gate (A1 to A3) covers mill and fabrication; cradle to site (A1 to A4) adds delivery. Show each factor’s source, edition year and route, and the share of tonnage on mill-specific data, so the GHG emissions calculation can be reproduced.

An emission factor is only as defensible as its source and vintage, so build GHG emission calculations on public references and cite them line by line.

• EPA GHG Emission Factors Hub and eGRID: default factors for combustion, electricity (eGRID grid rates for location-based Scope 2), transportation, travel, commuting and waste, updated annually (2025 edition, January 2025) with sources documented.
• GHG Protocol Scope 3 Calculation Guidance: category-by-category methods, including supplier-specific, hybrid, average-data and spend-based approaches for purchased goods.
• Mill EPDs published by third-party program operators under ISO 14025, plus the worldsteel life cycle inventory methodology behind many steel datasets.
• AISC industry-wide EPDs for fabricated hot-rolled sections, HSS and plate as the industry-average tier.

For every factor, record source, edition or data year, table or EPD number, value, unit, boundary, global warming potential basis (IPCC Fifth or Sixth Assessment Report) and access date, and freeze the factor set for each reporting year.

GHG emission calculations become useful when they fit the framework the owner reports into; four frameworks drive most steel requests.

LEED. LEED v4.1 Materials and Resources credits reward whole-building life cycle assessment against a baseline design and product disclosure through Environmental Product Declarations; LEED v5 sharpens the focus on embodied carbon.

Federal Buy Clean and GSA. The U.S. General Services Administration published low embodied carbon material requirements under the Inflation Reduction Act for concrete, cement, masonry units, asphalt, steel and glass, including hot-rolled sections, HSS, plate and rebar. Compliance rests on a product-specific Type III EPD conforming to ISO 14025 and ISO 21930, judged against Top 20 percent, Top 40 percent and better-than-average limits; the program’s status and thresholds have changed over time, so confirm current requirements with the contracting agency.

State Buy Clean programs. California’s Buy Clean California Act requires facility-specific EPDs for structural steel, rebar, flat glass and mineral wool board insulation on covered state projects and sets maximum GWP limits, for example 1,010 kg CO2e per metric ton for unfabricated hot-rolled sections (values effective January 1, 2025). Colorado’s Buy Clean Colorado Act applies a comparable structure.

Corporate targets and investor reporting. Owners and general contractors with targets validated by the Science Based Targets initiative (SBTi) need purchased steel in their Scope 3 category 1 line by reporting year, as do investor-facing climate disclosures. U.S. subsidiaries of Japanese companies pass the same figures to parent-company inventories built on the GHG Protocol, so a report organized by scope, with factors and boundaries stated, transfers directly.

To serve all four, a fabricator’s GHG report must state the reporting period and boundary; Scope 1 and 2 totals (location- and market-based); package embodied carbon per metric ton and in total, with its module boundary; factor source, vintage and route per tonnage line; transport legs; the share of tonnage on mill-specific EPDs; and heat-number traceability to the mills.

Seven errors recur in first-year inventories.

• Double counting: a fabricator’s Scope 1 and 2 are the buyer’s Scope 3 category 1; never add shop energy on top of a fabricated-product EPD that already includes it.
• Mixing boundaries: comparing cradle-to-gate with cradle-to-grave, or A1 to A3 with A1 to A4, produces differences that reflect scope rather than performance.
• Wrong route: a global average factor on domestic EAF sections, or an EAF factor on imported blast furnace plate, can move the result by a wide margin.
• Omitting transport: freight is small relative to steelmaking yet material relative to fabrication.
• Unstated factor vintage: a factor without an edition year cannot be reproduced.
• Confusing a GHG inventory with an LCA: one is organizational and annual, the other product-based and per declared unit.
• No per-ton intensity: only kg CO2e per metric ton lets an owner compare packages, mills and years.

The cure is a written methodology fixing boundary, factors, allocation and units before the first number is calculated, plus a data trail from heat number to mill EPD.

American Katerra, LLC, the U.S. subsidiary of Yamaguchi Heavy Industries Ltd., treats greenhouse gas reporting, and the GHG emission calculations behind it, as part of delivering a steel package. Life cycle assessment covers the fabricated product, and GHG reporting covers the supply chain behind it. Both draw on data our project teams already maintain: the bill of materials from the detailing model, mill test reports tied to heat numbers, transport records and allocated fabrication energy. Our LCA services quantify energy use, GHG emissions and waste across the steel life cycle in line with ISO 14040 and LEED material credits, and the documentation arrives with the steel for owners pursuing LEED credits or corporate carbon targets. Through our Green & Blue Carbon Steel™ program we source lower-carbon steel where the project allows and quantify the reduction against a conventional supply scenario using the same factors and boundaries. See our embodied carbon page and our SCM services, which keep one data thread from mill order to site.

How are GHG emissions calculated?

GHG emissions are calculated by multiplying activity data, such as fuel, electricity or steel purchased, by an emission factor, then converting each gas to CO2-equivalent with its global warming potential. Results are grouped into Scope 1, 2 and 3 under the GHG Protocol or into categories under ISO 14064-1.

What is the difference between Scope 1, 2 and 3 emissions?

Scope 1 is direct emissions from sources a company owns or controls, such as fuel burned in equipment and vehicles. Scope 2 is indirect emissions from purchased electricity, steam, heat and cooling. Scope 3 is all other value chain emissions, from purchased steel to freight, waste and end of life.

How do you calculate Scope 3 emissions for construction materials?

Build a bill of materials by product, grade and supplier, multiply each mass by a cradle-to-gate emission factor from a supplier-specific EPD where available (an industry-average EPD otherwise), then add transport as ton-miles times a mode factor. Report kg CO2e per metric ton and a project total with the boundary stated.

What is the difference between a GHG inventory and a life cycle assessment?

A GHG inventory measures an organization’s emissions over a reporting period, sorted into scopes; a life cycle assessment measures the impacts of one product or declared unit across defined life cycle stages. The embodied carbon of purchased steel is where an inventory’s Scope 3 draws on LCA data.

If your project needs Scope 3 figures for a steel package, LEED documentation or a supply chain GHG report your parent company can consolidate, our LCA and GHG team can scope the work with you. We confirm boundaries, factor sources and the format your framework requires before fabrication planning starts, so the numbers arrive with the steel. Learn more about our LCA services or contact our team to discuss an upcoming project.