<p>Achieving value chain decarbonization requires carbon accounting frameworks that integrate firm-scale heterogeneity with multi-tier industrial linkages. In China, small and medium-sized enterprises (SMEs)—comprising over 98% of manufacturing firms—are deeply embedded in production networks yet remain underrepresented in emission inventories. This study develops a scalable framework to structurally decompose direct, upstream, and downstream carbon footprints across 42 sectors and two enterprise scales from 2017 to 2020. Three key patterns emerge: First, manufacturing serves as the central carbon transmission hub, characterized by substantial direct, upstream, and downstream emissions. Second, a tier-based decomposition reveals systematic architectural differences—large enterprises’ upstream emissions are highly concentrated in Tier-1 suppliers (51.6%), whereas SMEs show balanced reliance across Tier-1 (42.4%) and Tier-2 (31.0%) suppliers. Third, in key processing sectors such as petroleum processing, SMEs—despite generating only a small share of sectoral revenue—bear indirect emission intensities several times higher than large enterprises, reflecting their concentration in low-value-added, high-material-throughput activities. These findings expose how carbon responsibilities are redistributed along value chains and identify SMEs in specific high-intensity sectors as critical, yet overlooked, leverage points for systemic decarbonization.</p>

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The value chain carbon footprint of small and medium-sized enterprises: a systemic analysis of China’s manufacturing sector and its linkages

  • Wenbin Liu,
  • Wenping Wang,
  • Peiyi Yao,
  • Aohan Wang

摘要

Achieving value chain decarbonization requires carbon accounting frameworks that integrate firm-scale heterogeneity with multi-tier industrial linkages. In China, small and medium-sized enterprises (SMEs)—comprising over 98% of manufacturing firms—are deeply embedded in production networks yet remain underrepresented in emission inventories. This study develops a scalable framework to structurally decompose direct, upstream, and downstream carbon footprints across 42 sectors and two enterprise scales from 2017 to 2020. Three key patterns emerge: First, manufacturing serves as the central carbon transmission hub, characterized by substantial direct, upstream, and downstream emissions. Second, a tier-based decomposition reveals systematic architectural differences—large enterprises’ upstream emissions are highly concentrated in Tier-1 suppliers (51.6%), whereas SMEs show balanced reliance across Tier-1 (42.4%) and Tier-2 (31.0%) suppliers. Third, in key processing sectors such as petroleum processing, SMEs—despite generating only a small share of sectoral revenue—bear indirect emission intensities several times higher than large enterprises, reflecting their concentration in low-value-added, high-material-throughput activities. These findings expose how carbon responsibilities are redistributed along value chains and identify SMEs in specific high-intensity sectors as critical, yet overlooked, leverage points for systemic decarbonization.