Buyers reduce emissions by co-financing projects at their suppliers
Buyers share the cost of one emissions reduction at a supplier with its other buyers, and receive verified credits in proportion to what each contributes. They can commit early with future credits once the project is validated.
Buyers answer for emissions that other companies produce
For most manufacturers and retailers, Scope 3 is the large majority of the footprint, and purchased goods and services are usually the largest category. Those emissions sit in plants the buyer does not operate, often several tiers away. Many inventories still use spend-based averages, so a supplier’s real improvement may not show up at all. A single buyer is also rarely a large enough customer to justify a supplier’s investment alone. Scope 3 is the part of a climate target that matters most and is controlled least.
What buyers gain
Buyers get a verified emissions reduction at a supplier they already buy from, paid for jointly and documented for assurance.
Shared cost
Buyers that share a supplier co-fund one project instead of each negotiating separately. A buyer with a 30% share pays 30% of the project cost and receives 30% of the verified credits.
Evidence for assurance
Each credit carries the named supplier, the project, the measured baseline, the validation and verification reports and its full transfer history, which is the documentation an assurance provider asks for.
Counted once
Each tonne has one serial number and one holder. Once a buyer retires a credit it is closed permanently, so no other buyer, and not the supplier, can claim it.
Spend that can come back
Credits a buyer does not need for its own reporting can be sold to other buyers in the same value chain, which recovers part of the contribution.
Future credits: finance before the reduction happens
Buying future credits at validation helps finance the project. Realized credits stand for tonnes already verified.
Commit early, usually at a lower price
A buyer can take future credits as soon as the project is validated. They are usually priced lower than realized credits because the buyer carries the delivery risk, and they secure the buyer’s share of the project from the start.
Future credits
From validation- For a planned reduction that has not happened yet.
- Issued to the project developer once the validation report confirms the project.
- Labeled Future on the Carbon3 registry.
- The holder carries the delivery risk, so they are usually priced lower.
Realized credits
After verification- For a reduction that has already happened.
- Issued to the project developer, one per tonne in the verification report.
- The independent verifier has confirmed the tonnes.
Both kinds are issued to the project developer and recorded on the Carbon3 registry. Every credit shows its category, so it is always clear which kind is held.
How a buyer funds an emissions reduction in its own chain
The buyer is involved from scoping onwards. Validation confirms the project before money is spent on implementation.
- 1Buyers and supplier
Scoping and project definition
Use the Data Hub to find the hotspots in what key suppliers report, including emissions, targets and announced projects. Then agree the project, the baseline, the shares and the timeline with the supplier and any other buyers that share it.
- 2Independent verifier
Validation report
An independent verifier confirms the project scope, baseline, methodology and additionality before implementation. Buyers see the report before paying further tranches.
- 3Supplier
Implementation
The supplier installs the change and records the monitoring data. Buyers pay as agreed.
- 4Independent verifier
Verification report
After each monitoring period, the verifier checks the data and states the verified reduction.
- 5Project developer, on the Carbon3 registry
Issuance to the project developer
Realized credits, one per tonne in the verification report, are issued to the supplier and recorded on the Carbon3 registry. Future credits can also be issued to it earlier, once the project is validated. They stay labeled Future, and buyers who take them carry the delivery risk. The verifier does not issue credits.
- 6Supplier
Allocation
The supplier transfers credits to each buyer in line with what it paid.
- 7Buyer
Sale or retirement
Retire credits for the Scope 3 report, with the validation and verification reports attached. Sell any surplus to other buyers.
Shared cost, separate claims
Several buyers of one supplier fund one project. Each receives its own credits, and no two buyers hold the same tonne.
Buyer A
Lead buyer, often the largest customer
Other buyers
Other customers of the same supplier
Supplier
Implements the project
Each tonne goes to one buyer only. Shares are fixed in the co-funding agreement before the first credit is issued.
Three buyers share one paper mill
Three consumer-goods companies buy corrugated packaging from the same paper mill. They fund the mill’s switch from a gas boiler to an electrode boiler for drying steam.
Who pays what
| Funder | Share | Pays | Credits, years 1 to 5 | Of which future credits (years 1 and 2) |
|---|---|---|---|---|
| Buyer A | 50% | €300,000 | 6,300 t | 1,800 t |
| Buyer B | 30% | €180,000 | 3,780 t | 1,080 t |
| Buyer C | 20% | €120,000 | 2,520 t | 720 t |
| Total | 100% | €600,000 | 12,600 t | 3,600 t |
Future and realized credits in this example
1At validation
The 3,600 tonnes planned in years 1 and 2 are bought as future credits, so the money funds the implementation and the holders carry the delivery risk.
2After each verification
The 9,000 tonnes verified in years 3 to 5 are issued as realized credits, one per tonne in the verification report.
Cost per verified tonne
Spread over 5 years of credits, the project cost comes to €48 per verified tonne, a figure to compare with the internal carbon price or with the CBAM certificate cost an importer faces. Real prices are not shown.
Assumptions
- Project cost €600,000.
- Full rate of 3,000 t a year from year 3.
- Each buyer pays its share once, up front.
- Credits are split in line with what each funder paid.
- One credit equals one verified tonne of CO₂e.
- No real companies, prices or projects. Fees are not shown.
- Illustrative split: the credits for years 1 and 2 are bought as future credits at validation; later years are taken as realized credits after each verification. The real split is agreed project by project.
Credits for each buyer over five years
Credits per year by buyer, with the running total.
Credits per year, in tonnes
- Buyer A (50%)
- Buyer B (30%)
- Buyer C (20%)
- Future credits, bought at validation
12,600 t in total over 5 years
Assumptions
- Same project and shares as the worked example.
- Scope 3 treatment depends on the GHG Protocol revision.
- Real results depend on verification.
- Illustrative split: the credits for years 1 and 2 are bought as future credits at validation; later years are taken as realized credits after each verification. The real split is agreed project by project.
How a buyer can report it
A reduction at a supplier the buyer purchases from is treated differently from one elsewhere in its industry. Each card shows both.
GHG Protocol: Scope 3 Standard
- What the standard is
- The Greenhouse Gas Protocol sets the accounting rules most companies use for their emissions. Its Corporate Value Chain (Scope 3) Standard, published in 2011, covers the emissions in a company’s value chain in 15 categories, from purchased goods and transport to the use of sold products. It has no market-based method for Scope 3, so purchased certificates or credits do not change the Scope 3 figure, unlike electricity in Scope 2.
- A reduction in the company’s own supply chain
- A reduction at a supplier the company buys from lowers its Scope 3 inventory when it shows up in the data the company uses, for example a supplier-specific emission factor for the goods it purchases. A spend-based average will not show it.
- One in its industry, outside its chain
- A reduction at a producer outside the company’s own supply chain is not part of its inventory under any method. It can be disclosed separately as an action, not as a lower Scope 3 figure.
- What an inset credit does
- When a supplier in the buyer’s own chain reduces emissions, the buyer’s Scope 3 goes down through lower supplier emissions data. The inset credit is the proof of that emissions reduction and who funded it, and it is not counted a second time. An emissions reduction outside the buyer’s own chain is reported separately, not as a lower Scope 3 figure. The GHG Protocol’s Actions and Market Instruments workstream is developing a market-based approach for Scope 3. A consolidated draft is expected for public consultation in the second quarter of 2027, and the revised standard in the fourth quarter of 2028. Each Carbon3 credit records the supplier, project, baseline and verification report, so it can be reported under the current rules and reassessed under the new ones.
Science Based Targets initiative (SBTi)
- What the standard is
- The SBTi validates whether a company’s emissions reduction targets are consistent with climate science. Its Corporate Net-Zero Standard V2.0 was published on 11 June 2026. Validations under it open on 1 February 2027, and it becomes mandatory for new target submissions from 1 February 2028. Targets already validated under the earlier version stay valid for their cycle. Target ambition is always set on the company’s physical inventory.
- A reduction in the company’s own supply chain
- Reductions that show up in the company’s inventory support emissions reduction claims. A project implemented by or on behalf of the company in its own value chain, with measured outcomes reported in proportion to its contribution, can support target implementation and an “alignment” claim.
- One in its industry, outside its chain
- Action in a shared system the company draws on, such as a supply shed or logistics network, or at sector level, counts only where direct action in its own chain is constrained. It supports a separate “system contribution” claim, reported apart from the inventory.
- What an inset credit does
- Projects must be measured, additional and verifiable. Their outcomes must be uniquely attributed, with serialized tracking to prevent double counting. Credits a company sells on cannot also count for that company. The SBTi plans interim guidance on reporting projects and market instruments for consultation in the fourth quarter of 2026, so how a received inset credit is assessed is not yet fully settled.
EU rules on green claims
- What the standard is
- From 27 September 2026, EU consumer law (Directive 2024/825) bans claims that a product has a neutral, reduced or positive climate impact when the claim rests on compensating emissions with credits. Claims about measured reductions in the product’s own life cycle remain possible if they are substantiated.
- A reduction in the company’s own supply chain
- A product claim can rest on measured, substantiated reductions in that product’s own life cycle, which includes reductions at its suppliers.
- One in its industry, outside its chain
- A reduction outside the product’s life cycle cannot support a claim that the product has a neutral, reduced or positive climate impact.
- What an inset credit does
- Inset credits support Scope 3 reporting and progress towards targets, not product neutrality claims. A product claim has to rest on measured reductions in that product’s life cycle. Credits never replace a company’s own emissions reductions.
Counting each tonne once
- What the standard is
- Double counting happens when two companies claim the same tonne, when one tonne is sold twice, or when a reduction is credited by two programs. Standards such as the SBTi’s now require serialized tracking to prevent it.
- A reduction in the company’s own supply chain
- Several companies in one chain can fund the same project. Each receives its own serialized credits, so no tonne has two holders.
- One in its industry, outside its chain
- The same rule applies wherever the tonne sits: one serial number, one holder, and no credit for a reduction already credited by another program.
- What an inset credit does
- Each credit has a serial number and exactly one holder on the Carbon3 registry. A transfer moves it rather than copying it, and retirement closes it permanently. A reduction already credited elsewhere is excluded at validation.
General information as of October 2026, not legal, accounting or reporting advice. Standards and regulations change; check the current text.
Questions from buyers
When a supplier in the buyer’s own chain reduces emissions, the buyer’s Scope 3 goes down through lower supplier emissions data. The inset credit is the proof of that emissions reduction and who funded it, and it is not counted a second time. An emissions reduction outside the buyer’s own chain is reported separately, not as a lower Scope 3 figure. The GHG Protocol’s actions and market instruments work is developing a market-based approach for Scope 3. A consolidated draft is expected for public consultation in the second quarter of 2027, and the revised standard in the fourth quarter of 2028. Under the SBTi’s Corporate Net-Zero Standard V2.0, a project implemented on behalf of the company in its own value chain can support target implementation, subject to integrity criteria. Carbon3 records each credit so it can be reported under the current rules and reassessed under the new ones.
Start with current suppliers
Carbon3 shows how a project would run with the suppliers already on the books.