What are avoided emissions?

Quick Answer: Avoided emissions are reductions in greenhouse gas emissions that occur because a product, service, or technology was used instead of a higher-emitting alternative. They represent emissions that would have happened under a baseline scenario but did not, because of a specific choice or intervention. Avoided emissions sit outside a company's own carbon footprint and are reported separately from Scope 1, 2, and 3 emissions.

What Are Avoided Emissions?

Avoided emissions are the difference between the greenhouse gas emissions of a chosen product or activity and the emissions that would have resulted from a reference scenario, typically called the baseline. If a company sells LED lighting that uses 80% less energy than a standard incandescent bulb, the emissions the customer does not produce by switching represent avoided emissions attributable to the LED product.

The concept is most commonly used by companies whose products or services help others reduce their emissions. Renewable energy providers, energy efficiency technology manufacturers, and low-carbon logistics companies all frequently report avoided emissions as a way of quantifying their positive climate contribution.

Avoided emissions are sometimes called enabled emissions reductions or Scope 4 emissions, though neither term has been formally standardised across major accounting frameworks.

How Are Avoided Emissions Calculated?

Calculating avoided emissions requires three inputs: a clearly defined baseline, the actual emissions of the product or activity being assessed, and a system boundary that determines what is included in the comparison.

The baseline is the counterfactual: what would have happened if the lower-emitting product or service had not been used. Choosing the right baseline is the most contested part of the calculation. Common baseline options include:

• Market average: the average emissions intensity of competing products currently available
• Regulatory minimum: the lowest-performing product permitted by current regulations
• Business as usual: the specific product or process the customer would have used otherwise

The avoided emissions figure is then: baseline emissions minus actual emissions, multiplied by the volume of activity (units sold, kilometres travelled, kilowatt hours generated, and so on).

For example, if a conventional vehicle emits 180 gCO2e per kilometre and an electric vehicle emits 60 gCO2e per kilometre over the same distance, the avoided emissions per kilometre are 120 gCO2e. Across a fleet of 500 vehicles each travelling 20,000 km per year, that figure becomes 1,200 tCO2e of avoided emissions annually.

The World Resources Institute (WRI) published guidance on avoided emissions accounting in 2023, setting out a framework for consistent, credible calculation. The guidance emphasises that avoided emissions must always be reported alongside, not instead of, a company's own footprint.

How Do Avoided Emissions Differ from a Company's Carbon Footprint?

A company's carbon footprint covers its own Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) emissions. Avoided emissions are categorically different: they describe emissions reductions that occur elsewhere, in a customer's or end-user's operations, as a result of using a company's product or service.

This distinction matters for reporting. A company cannot subtract avoided emissions from its own footprint to arrive at a net figure. Doing so would misrepresent the company's actual emissions and undermine the integrity of its GHG inventory. The GHG Protocol, which sets the international standard for corporate carbon accounting, does not include avoided emissions within Scope 1, 2, or 3 reporting boundaries.

Avoided emissions are reported as a separate, supplementary metric, clearly labelled and accompanied by the methodology used to calculate them. This keeps the company's actual footprint accurate while still allowing it to communicate the climate value of its products.

Why Do Avoided Emissions Matter for Sustainability Reporting?

For companies whose core business reduces emissions elsewhere, avoided emissions are a meaningful way to tell the full climate story. A manufacturer of heat pumps, a provider of plant-based food products, or a developer of carbon management software may have a relatively modest operational footprint but generate significant avoided emissions across their customer base.

Avoided emissions are increasingly relevant in several reporting and commercial contexts:

• Investor and stakeholder communication: showing the climate benefit of a product portfolio alongside the operational footprint gives a more complete picture of a company's climate position
• Product-level claims: avoided emissions calculations underpin marketing claims about the climate benefit of specific products, provided the methodology is disclosed
• Supply chain engagement: buyers assessing supplier sustainability sometimes look at avoided emissions as evidence of a supplier's contribution to shared climate goals
• Science-based target alignment: the Science Based Targets initiative (SBTi) encourages companies to quantify and report avoided emissions as part of demonstrating a beyond-value-chain mitigation strategy, though these figures remain separate from target-setting calculations

The risk of avoided emissions reporting lies in overclaiming. If a company reports avoided emissions without disclosing the baseline assumption, the system boundary, or the methodology, the figure becomes difficult to verify and easy to challenge. Credible reporting requires transparency on all three.

What Are the Common Pitfalls in Avoided Emissions Reporting?

The most significant pitfall is using avoided emissions to offset or neutralise a company's own footprint. This is methodologically incorrect and, if presented in a misleading way, risks greenwashing accusations. Avoided emissions do not cancel out Scope 1, 2, or 3 emissions.

Other common issues include:

• Optimistic baseline selection: choosing a high-emitting baseline inflates the avoided emissions figure. A credible approach uses a baseline that reflects realistic market conditions, not the worst-case alternative.
• Double counting: if both the product manufacturer and the customer claim the same avoided emissions, the figure is counted twice. Clear agreement on who reports what is needed.
• Ignoring the full lifecycle: a product that avoids emissions during use may generate significant emissions in its manufacture or disposal. Lifecycle analysis (LCA) data gives a more accurate picture.
• Lack of additionality: if the lower-emitting alternative would have been adopted regardless of the company's product, the avoided emissions cannot be fully attributed to that product.

For companies working through their carbon footprint tracking for the first time, avoided emissions are not the starting point. Getting the operational footprint right, covering Scope 1, 2, and 3 accurately, comes first. Seedling's carbon accounting process is built around that foundation, with expert support to make sure the footprint is accurate and the methodology is defensible before any supplementary metrics are considered.

Avoided emissions reporting is still maturing as a practice. As frameworks like the WRI guidance and emerging ISO standards develop further, the expectation for rigour and transparency will increase. Companies that build credible calculation methods now will be better placed to use avoided emissions as a genuine indicator of climate contribution, rather than a headline figure that does not hold up to scrutiny.