Scope 3 Regulatory Pressure Mounts on Ports

A UK Supreme Court ruling has sent shockwaves through the infrastructure world, making downstream emissions, known as Scope 3, legally mandatory in Environmental Impact Assessments (EIAs). For the shipping and ports industry, the implications are immediate and unavoidable. As lawsuits surge, EU regulations tighten and green investors demand full transparency, PortXchange is urging ports to stop delaying and start measuring what matters most.

“Ports don’t operate in a vacuum. They are central to global supply chains and the emissions those chains produce,” said Sjoerd de Jager (pictured, below), Managing Director and Co-Founder of PortXchange. “This ruling confirms what many of us have argued for years, if we want real decarbonisation, Scope 3 can’t be ignored. The industry needs to move from reporting what’s easy to measuring what matters.”

The Supreme Court’s decision in Finch v Surrey County Council Invalidated a fossil fuel permit for failing to assess emissions from the fuel’s end use. That precedent is now fuelling active legal challenges against North Sea oil and gas developments, including Rosebank and Jackdaw, with Greenpeace, Uplift and Friends of the Earth all filing suits. Their position is unequivocal: if emissions are generated, they must be assessed and mitigated. The same principle applies to port expansions and infrastructure development. This legal strategy is gaining momentum, and ports are firmly in scope.

Yet many ports continue to publish ESG reports that overlook the largest source of their emissions: the ships that call, the trucks that queue, and the rail networks on which they depend. This selective reporting is no longer acceptable to courts, regulators, or the public.

Adding urgency, the European Commission is now reviewing key components of its Fit for 55 climate package, with strong indications that ports will be required to track and report vessel emissions at berth as part of the expanded EU ETS (Emission Trading System) and MRV (Monitoring, Reporting, Verification) schemes. For ports that haven’t digitised emissions tracking or haven’t addressed Scope 3 emissions, this won’t just be a legal risk; it will become a commercial one.

“Ports that fail to act now are going to find themselves locked out of the next wave of green growth,” said de Jager. “Scope 3 isn’t just about compliance, it’s about credibility, capital and competitiveness.”

That commercial pressure is already here. Institutional investors and green bond providers are starting to reject infrastructure projects that exclude Scope 3 emissions from their ESG disclosures. To access EU taxonomy-aligned or sustainability-linked finance, ports will be expected to show end-to-end emissions transparency. “Pretending it’s someone else’s footprint won’t fly with lenders anymore,” he added.

Even as this pressure mounts, the UK Government last week announced a £30 million funding package to accelerate maritime decarbonisation, investing in shore power, clean fuels, and digital infrastructure. While PortXchange welcomed the move, de Jager warns that grants and pilots won’t be enough on their own.

“We applaud the investment, but innovation without accountability is a missed opportunity,” he said. “Ports need full visibility into their emissions profile and the ability to act on it. That’s exactly what EmissionInsider delivers.”

PortXchange’s EmissionInsider platform provides real-time, multimodal emissions tracking across ships, trucks, and rail, producing a complete, defensible view of Scope 1, 2, and 3 emissions. With built-in tools for scenario modelling, heatmap detection, and compliance-grade reporting, EmissionInsider is already helping leading ports close the Scope 3 gap before regulators or litigators do it for them.

PortXchange is actively working with ports, terminal operators, and regulators across the UK, Europe and the Americas to overhaul their emissions strategies and align with today’s rapidly changing legal landscape. The company is now offering rapid onboarding and support for port executives preparing for infrastructure permits, investor reporting, or green finance audits. “Ports don’t get to call themselves sustainable while ignoring 80% of their emissions,” said de Jager. “Scope 3 is where the accountability is. It’s where the credibility is. And now it’s where the law is.”

The Supply Chain in 2025: Trends and Challenges

2024 was a complicated year for the supply chain; from disruptions to shipping on the Red Sea through to rail strikes, port closures and announced changes to trade tariffs by the leading economic power internationally, the challenges to unhindered trade were many and diverse. So what’s in store for 2025? Simon Thompson (pictured), VP Northern Europe at JAGGAER, delves into a dozen major trends.

1. Cost Savings
Cost management and achieving savings remain a top concern for businesses worldwide. Investments in AI-driven analytics will enable businesses to identify cost-saving opportunities across the supply chain by identifying inefficiencies, optimizing supplier performance, and negotiating better contract terms — ultimately enhancing the bottom line without compromising quality.

2. Risk Management
2024 was a complex year for supply chains globally. It saw disruptions caused by Houthi attacks on vessels in the Red Sea, Canadian rail strikes and the closure of Ningbo Port in China due to a container explosion on the YM Mobility to name a few. Whether geopolitical, economic, or environmental, the vulnerabilities of the supply chain have been evident and savvy businesses have made moves to derisk their operations. Using technology and data to improve transparency and communications all along the chain, it is in fact possible to prevent bottlenecks and rapidly identify alternative routes or suppliers.

3. AI and data quality
It’s becoming a mantra that AI is only as good as the data it uses. As businesses leverage AI automation to make processes more efficient, sourcing error-free timely data from across the supply chain can be a thankless task for both suppliers, inputting information, and buyers, analysing it without automation. As effective AI increases the demand for large volumes of high-quality data with transparent and traceable data sources, it will become crucial to leverage automation to drive efficiency.

4. Blockchain Technology
Blockchain technology is expected to play a crucial role in making supply chains more transparent and traceable. With its decentralized ledger system, blockchain offers unparalleled data integrity, making it easier to track the provenance of goods and ensure compliance with ethical and environmental standards. Although this technology is still at an early stage, we can expect the debate to heat up around blockchain in 2025.

5. Cybersecurity
More use of technology, however, also means more exposure to cyber threats. As businesses place more and more of their data and systems on the cloud, it is becoming more and more complex to protect sensitive customer data as mandated by international regulations. Investing in systems and governance to protect the business across all its international operations is key.

6. Regulatory Compliance
Greater consumer awareness of sustainability and ethical issues along the supply chain, in addition to calls for greater user safety and quality, are driving increasing scrutiny from regulators. The EU Deforestation Act 2023/1115 and the US Uyghur Forced Labor Prevention Act (H.R. 6256) are just two examples of regulations concerning the supply chain. Organizations must stay ahead of the curve by setting up systems to proactively and simply assess their suppliers along the chain to ensure ethical sourcing, anti-corruption measures, and environmental responsibility.

7. Scope 3
As businesses strive to achieve their sustainability goals, Scope 3 emissions — those indirectly resulting from the supply chain — are increasingly coming under scrutiny as they typically account for the majority of carbon footprint. Improving communication channels with suppliers and gathering information regarding their eco-friendly practices, responsible sourcing of raw materials, and reduced energy consumption, is key to ensuring that Scope 3 emissions are curbed. Shifting the focus from cost cutting to creating partnerships for sustainability is key to creating greater transparency and flexibility as well as an environment that fosters sustainable innovation along the supply chain.

8. Supplier relationship management
More resilient supply chains depend on better collaboration between parties. Stronger partnerships are created through transparent communication channels that make transmitting key information on certifications, potential bottlenecks, low stock or by provisioning difficulties in real-time without overburdening the supplier with an enormous admin onus. Providing seamless and streamlined systems to expedite information sharing can create the ideal environment to develop new strategies such as new shipping routes, new raw or component product suppliers or even co-investment in new technologies and innovation to improve end products.

9. Nearshoring, Reshoring
As the new United States president steps into his role on 20th January, the world will be holding its breath to find out whether the tariff increases threatened on international trade will take effect. With Chinese products risking “an additional 10% tariff, above any additional tariffs”, Mexico and Canada an increase to 25% and EU businesses anything between 10% and 20%, it is likely US businesses will be increasingly sourcing from national providers. Closer to home alternatives, such as sourcing from Mexico would shorten the supply chain and enhance control over logistics, as well as reducing environmental impact by reducing the distance goods travel.

10. Sourcing from Emerging Markets
Finally, another strategy to respond to tariff will be sourcing from emerging markets. This strategy, useful to help diversify and thus risk-proof the supply chain, can also benefit sustainability provided regions with lower carbon footprints or renewable energy sources are selected.

Conclusion

The global supply chain has been put under significant pressure in 2024, and response has highlighted vulnerabilities as well as ideal pathways to resilience. Technologies and strategies taking the lead in 2025 will build on these as businesses continue to bolster their supply chain against volatility and disruptions, while strengthening areas of potential exposure with increased intelligence derived from greater transparency along the entire supply chain.

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Tariffs and Trade Barriers as Top Concern of Supply Chain Leaders

 

Top 100 UK Supply Chains Emit 3 billion tonnes of CO2

The supply chains of FTSE 100 companies emitted 3 billion tons of CO2 last year, shows research by supply chain experts INVERTO, a subsidiary of Boston Consulting Group.

These latest figures show just how far the UK’s biggest businesses still have to go in achieving Net Zero in their supply chains (i.e. the raw materials, goods and services that FTSE 100 companies use).

The Top 5 emitters alone accounted for 86% of the FTSE 100 total (2.56bn tonnes of CO2), while the Top 10 accounted for 93% (2.79bn tonnes of CO2). The Top 10 was dominated by oil & gas, mining and engineering firms. Supply chain emissions – also known as Scope 3 emissions – include all indirect emissions occurring in the upstream and downstream activities of an organisation, e.g. from the goods and services it purchases.

Sushank Agarwal, Managing Director at INVERTO, argues that though much work remains, progress is being made towards Net Zero emissions in FTSE 100 supply chains. “Even though there’s still a long way to go, we’re in a much better place than we were on supply chain decarbonisation just a couple of years ago. There’s now a lot of awareness and strong senior sponsorship, but many are still in the process of turning that into concrete action.

“Those businesses that have started their journey are mainly focusing on reducing their Scope 3 emissions through embedding sustainability measures into their sourcing processes and working directly with key suppliers to reduce emissions throughout the value chain. The bulk of supply chain emissions reductions are relatively achievable in the medium term, with only a minority requiring further technological advancement or very large-scale investment. That’s what businesses should be focusing on today – the low-hanging fruit in their supply chains.”

Still too few FTSE 100 companies setting Net Zero targets

There is concern that not enough FTSE 100 companies have made explicit commitments for when they will achieve Net Zero. INVERTO’s research shows that so far, only 53 FTSE 100 companies have set a clear target date for fully decarbonising their supply chains. With an average target date of 2043 (see table below), INVERTO says that more FTSE 100 companies should be setting challenging targets for faster supply chain decarbonisation.

Agarwal says there is also a lack of FTSE 100 companies setting interim targets on their roadmap to Net Zero. This tactic means companies are more likely to commit resources to decarbonisation today, rather than hoping to catch up in 10 or 20 years’ time. “All companies should have a clear deadline for achieving Net Zero and milestones in place to get there. If they are targeting 2050 for complete decarbonisation of their supply chains, they should make clear where they will reach by 2030 and 2040 too. While some sectors will of course take much longer to get there, their progress will undoubtedly quicken over time.”

Far more reporting needed from the UK’s biggest listed companies

INVERTO says there is also a lack of regular and precise reporting on progress in reducing supply chain emissions by FTSE 100 companies. Overall, 57 FTSE 100 companies report their progress to shareholders, although the quality of the reporting varies significantly. While 57 companies have reporting in place, only 44 are reporting by using a clear metric – most often a percentage change on the year before. This is a sign that improvement is necessary, says Agarwal.

Highest-emitting sectors account for lion’s share of overall supply chain emissions

Despite the FTSE 100 as a whole emitting some 3 billion tonnes of CO2, just two sectors accounted for five sixths of the total: oil & gas with 49.6% and mining with 34.3%. Between them both, oil & gas and mining amount to just eight FTSE 100 companies.

Agarwal concludes: “All companies have a responsibility to bring down their supply chain emissions, but some more so than others. It’s expected that oil & gas and mining account for the lion’s share of emissions, so these sectors have the most to contribute to decarbonisation. Their efforts will automatically have a huge effect on other companies Scope 3 emissions as well.”

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