Uncertainty in Carbon Accounting: The Challenge of Hard-to-Abate Sectors

In boardrooms across industries, sustainability conversations often begin with confidence. Emissions are measured. Reports are published. Targets are set. Everything appears precise, until a simple question is raised:

How accurate are these numbers, really?

Because behind every carbon figure lies a level of uncertainty especially in industries where emissions are hardest to measure and even harder to reduce.

Carbon Accounting: Structured, Yet Complex

Greenhouse Gas (GHG) accounting is designed to bring clarity. It follows a defined process:

• Setting organizational and operational boundaries

• Identifying emission sources across Scope 1, 2, and 3

• Applying standardized emission factors

• Calculating total emissions

On the surface, this framework provides consistency and comparability. But in practice, the reliability of these numbers depends heavily on the quality of data, assumptions, and system boundaries and areas where uncertainty often persists.

The Balance We’re Trying to Measure

Greenhouse gases are not inherently harmful. They play a critical role in maintaining Earth’s temperature and enabling life. The real challenge lies in maintaining balance. Too little and the planet becomes uninhabitable. Too much and we face accelerating climate risks.

Carbon accounting, therefore, is not just about measurement, it’s about managing this delicate balance. And doing so requires a level of precision that is not always achievable.

Why Hard-to-Abate Sectors Are Different

Not all sectors face the same level of complexity. In industries like ICT, emissions are relatively easier to quantify largely linked to electricity use, infrastructure, and operations. However, in hard-to-abate sectors such as steel manufacturing, the picture is far more complex. Emissions are embedded across multiple stages:

• Raw material extraction

• Energy production

• High-temperature industrial processes

• Transportation and logistics

• Downstream fabrication

  
  

Each stage introduces both direct and indirect emissions many of which are difficult to capture with accuracy.

Where the Uncertainty Lies

Despite structured methodologies, several challenges persist:

1. Incomplete System Boundaries

Certain emission sources such as fugitive methane leaks, emissions from natural gas extraction, or exported off-gases are often underreported or excluded.

2. Variability in Industrial Processes

Differences in technology, operational efficiency, and fuel sources make standardization difficult. Two facilities producing the same output can have significantly different emission profiles.

3. Scope 3 Complexity

Indirect emissions across the value chain depend on external data—often inconsistent, estimated, or unavailable. This makes Scope 3 one of the largest yet least certain components of carbon accounting.

4. Reliance on Emission Factors

Most calculations depend on generalized emission factors, which may not reflect real-time or location-specific conditions.

The Illusion of Precision

We often report highly precise numbers built on layers of estimation. This does not invalidate carbon accounting but it does highlight a critical insight:

Not all emissions data carries the same level of confidence.

In hard-to-abate sectors, uncertainty is not an exception, it is inherent to the system.

Moving Forward: From Precision to Transparency

If uncertainty cannot be eliminated, it must be acknowledged. Organizations can strengthen their approach by:

• Investing in better data collection and monitoring systems

• Enhancing supply chain transparency and collaboration

• Increasing the use of clean energy and recycled materials

• Adopting innovative technologies to reduce process emissions

  
  

More importantly, there must be a shift from reporting perfect numbers to communicating honest insights.

A Call for More Realistic Sustainability Narratives

Sustainability is not just about metrics it’s about decision-making under uncertainty. Recognizing the limitations of carbon accounting does not weaken climate action. Instead, it strengthens it by making strategies more grounded, adaptive, and credible. This is particularly important for hard-to-abate sectors, where the path to decarbonization is complex and evolving.

References:

• Carbon Research (2024). Greenhouse gas control in steel manufacturing: inventory, assurance, and strategic reduction review.

• The World Bank. Measuring the Emissions & Energy Footprint of the ICT Sector.