Having conducted a carbon inventory does not mean that Scope 3 is in place. This is a blind spot currently faced by many Taiwanese manufacturing plants in Southeast Asia: emissions from Scope 1 and Scope 2 are already recorded, but European buyers are starting to inquire about the indirect carbon emissions of the entire supply chain, which is Scope 3.

Scope 3 is broader than carbon inventory, encompassing all indirect greenhouse gas emissions within a company's value chain, including emissions from upstream suppliers' production, the carbon footprint of raw material procurement, emissions from outsourced processes, and emissions generated by downstream customers using the products. For manufacturing plants, the most challenging aspect is often the upstream supplier segment, as that data is not readily available to them.

Why are European buyers starting to ask about Scope 3?

The EU's Supply Chain Due Diligence Directive (CSDD) and Corporate Sustainability Reporting Directive (CSRD) are extending Scope 3 requirements from large companies to the entire supply chain. When European brand manufacturers or buyers are required to declare their own Scope 3 emissions, they must request data from their suppliers, and you are one of their Scope 3 sources.

In 2025, some European buyers began to include carbon emissions questionnaires in their supplier reviews, asking not only about the factory's own electricity emissions, but also about the raw materials. This trend is expected to accelerate after 2026.

Three common obstacles

Southeast Asian factories most often encounter the following three difficulties when working on the Scope 3.

First, suppliers lack carbon emissions data. Many local raw material or component suppliers have not conducted any form of carbon inventory. If you ask them about the carbon footprint of their products, they don't know how to answer. This is particularly prevalent in local supply chains in Vietnam, Thailand, and Malaysia.

Second, the data formats and calculation standards are inconsistent. Even if some suppliers have data, the calculation boundaries, emission factor sources, and reporting formats may differ. This complicates the data aggregation process and makes it difficult to generate comparable figures.

Third, it is unclear which layer to report to. Scope 3 is divided into 15 categories in the GHG Protocol. Factories may not know which categories they need to report to, or which layer of the supply chain they need to trace back to. This causes many factories to get stuck before they even start.

Three ways to get started immediately

There are three pragmatic approaches to addressing these obstacles.

First, categorize suppliers. Don't aim for full traceability initially, but classify them into high, medium, and low tiers based on purchase amount or raw material carbon emission density, prioritizing suppliers with high carbon emission contributions. This allows you to establish key data with limited resources, rather than requiring all suppliers to provide complete reports from the outset.

Second, use industry factor data to fill in the gaps. For suppliers who cannot provide actual data, you can use the Ecoinvent, GHG Protocol toolkit, or industry average emission coefficients published by various governments as substitute values. This is not the most accurate method, but it can help you establish a magnitude estimate so you know roughly where your Scope 3 falls.

Third, proactively inquire about the needs of your European clients. Different European clients have different requirements for Scope 3 data; some only require Category 1 (purchases of goods and services), while others have broader requirements. Clarifying their specific needs beforehand will make your preparations more targeted and avoid doing unnecessary work.

Reasons to start now

Building up Scope 3 data takes time, especially the supplier communication phase, which often takes several months to obtain the first batch of useful data. Start compiling your supplier list and identifying data gaps now, so that when European clients formally make their requests, you won't be starting from scratch.

Scope 3 is not a one-time declaration, but a supply chain data system that requires continuous maintenance. The earlier this capability is established, the more significant the competitive advantage will be in supplier selection.

Further Reading

The following articles can be used in conjunction with this one:

Southeast Asian factories exporting to Europe: The 2026 CBAM carbon tariff is coming – three steps to check your exposure level.

Finding Carbon Reduction Pathways from Carbon Inventory: Three Key Steps in ESG for Manufacturing

From Compliance to Competitiveness: The S-15 Supply Chain Cybersecurity Offense and Defense