What are Scope 1, 2 and 3 emissions?
The three scopes come from the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard. They sort an organisation's greenhouse gas emissions by where they happen and who controls the source.
- Scope 1, direct emissions: from sources your organisation owns or controls, such as boilers, furnaces and vehicles, and from chemical production in your own process equipment.
- Scope 2, energy indirect emissions: from generating the electricity, heat, steam and cooling you buy. They happen at the power station or heat plant, not on your site.
- Scope 3, other indirect emissions: a consequence of your activities, but from sources you do not own or control. Examples include purchased materials, business travel, waste disposal and the use of products you sell.
The UK Government uses the same split. Its GHG conversion factors, published by the Department for Energy Security and Net Zero (DESNZ), are grouped by scope, and its guidance defines each scope in the same terms.
The Corporate Standard says companies must account for and report Scope 1 and Scope 2 separately, at a minimum. Scope 3 is optional under that standard. A second GHG Protocol standard, the Corporate Value Chain (Scope 3) Standard, sets out how to report it in 15 categories.
Whether a vehicle or building is Scope 1 or Scope 3 depends on the boundary you set: financial control, operational control or equity share. Choose one and apply it consistently. A van your company owns is Scope 1. An employee's own car used for a business trip is Scope 3.
Scope 1 emissions: examples for a UK business
Scope 1 covers the fuel you burn and the gases you release yourself. For a typical UK office, shop or small factory that means:
- Natural gas burned in your own boilers, taken in kWh from your gas bills.
- Diesel and petrol used in cars and vans your company owns or controls.
- Heating oil, LPG or gas oil used in boilers, generators or site machinery.
- Refrigerant gas that leaks from air conditioning, heat pumps and fridges. DESNZ suggests measuring the leak as the amount topped up during the year.
- Process emissions from chemical production in equipment you own or control.
Refrigerant leaks are easy to miss and can be large. In the 2026 UK Government factors, each kilogram of R410A, a common air conditioning refrigerant, counts as 1,924 kg CO2e. A 2 kg top-up therefore adds 3.85 tCO2e to Scope 1.
Carbon dioxide from burning biomass, such as wood pellets, is not included in Scope 1 under the GHG Protocol. It is reported separately.
If you generate renewable electricity on site, for example from solar panels, DESNZ says to report those kWh under Scope 1 with zero emissions.
Scope 2 emissions: location-based and market-based
Scope 2 is the emissions from generating the electricity, heat, steam and cooling your organisation buys and uses. For a typical UK business that is grid electricity, plus district heating where a site is on a heat network.
The GHG Protocol Scope 2 Guidance (2015) sets out two methods:
- Location-based: uses the average emissions intensity of the grid where the electricity is used. In the UK that is the UK Government grid factor: 0.13096 kg CO2e per kWh for 2026 and 0.177 for 2025.
- Market-based: uses emission factors from your contracts, such as a supplier-specific rate, or a renewable tariff backed by certificates such as Renewable Energy Guarantees of Origin (REGOs).
Under the GHG Protocol, companies with operations in markets that offer these contracts must report both figures, which it calls dual reporting. The government's Environmental Reporting Guidelines, which cover SECR, encourage location-based grid average factors for electricity and recommend showing any market-based figure alongside the location-based one. DESNZ's conversion factor guidance puts it more firmly: a market-based figure may be reported, but only in addition to the location-based figure.
On a renewable tariff? Still report the grid figure
A green tariff can lower your market-based Scope 2, but your location-based figure still uses the UK grid average. DESNZ suggests adding a note on whether your contract leads to additional renewable generation.
Electricity lost in the wires between the power station and your meter is not Scope 2. DESNZ publishes a separate transmission and distribution (T&D) factor for these losses, reported in Scope 3. It describes reporting T&D as voluntary but best practice for UK reporting.
Purchased heat and steam, including district heating, has a 2026 factor of 0.17529 kg CO2e per kWh, the same as in 2025.
What are Scope 3 emissions?
Scope 3 emissions are all the indirect emissions in your value chain that are not Scope 2. They happen at your suppliers and customers, at waste sites, and in the trains, planes and cars your staff use.
They are often the hardest to measure because the data sits with other organisations. The Cabinet Office's technical standard for Carbon Reduction Plans says Scope 3 emissions can represent up to 80% of an organisation's carbon emissions.
The GHG Protocol splits Scope 3 into upstream emissions, linked to the goods and services you buy (categories 1 to 8), and downstream emissions, linked to the goods and services you sell (categories 9 to 15).
Where you lack activity data, you can estimate. NHS England notes that, in line with the GHG Protocol, spend-based methods using conversion factors can be used for Scope 3. DESNZ says Defra's spend-based emissions multipliers, which are separate from the company reporting factors, can give an initial assessment of supply chain emissions from what you spend.
The 15 Scope 3 categories
These are the 15 categories in the GHG Protocol Corporate Value Chain (Scope 3) Standard, with everyday UK examples.
| Category | Stream | What it covers | UK example |
|---|---|---|---|
| 1. Purchased goods and services | Upstream | Making and transporting the goods and services you buy (cradle to gate) | Raw materials, stationery, IT and cleaning services |
| 2. Capital goods | Upstream | Making the long-life assets you buy | Machinery, vehicles, IT hardware, buildings |
| 3. Fuel- and energy-related activities | Upstream | Producing and delivering the fuel and energy you use, where not in Scope 1 or 2, including grid losses | Well-to-tank emissions of your gas and diesel; electricity T&D losses |
| 4. Upstream transportation and distribution | Upstream | Transport and storage of products you buy, between your direct suppliers and you, plus transport services you pay for, including deliveries to customers | A courier or haulier you pay to bring in stock or ship orders |
| 5. Waste generated in operations | Upstream | Disposal and treatment of your waste and wastewater at facilities you do not run | General waste to landfill, recycling collections |
| 6. Business travel | Upstream | Staff travelling for work in vehicles you do not own or operate; hotel stays are optional | Trains, flights, taxis, hire cars and staff's own cars on business trips |
| 7. Employee commuting | Upstream | Staff travelling between home and work; homeworking can be included | Staff driving or taking the train to the office |
| 8. Upstream leased assets | Upstream | Running assets you lease, where not already in your Scope 1 or 2 | Energy used in leased premises not counted in Scope 1 or 2 |
| 9. Downstream transportation and distribution | Downstream | Transport, storage and retail of products you sell, between you and the end customer, where you do not pay for it | A retailer storing and selling your goods; optionally, customers travelling to the shop |
| 10. Processing of sold products | Downstream | Processing of intermediate products you sell, by other companies | A manufacturer machining the parts you supply |
| 11. Use of sold products | Downstream | End use of the goods and services you sell | Electricity used by appliances you sell; fuel burned in vehicles you sell |
| 12. End-of-life treatment of sold products | Downstream | Disposal and treatment of products you sell at the end of their life | Packaging and products thrown away by customers |
| 13. Downstream leased assets | Downstream | Running assets you own and lease to others, where not in your Scope 1 or 2 | Energy used by tenants in a building you let |
| 14. Franchises | Downstream | Running franchises, reported by the franchisor | Energy used at franchised outlets |
| 15. Investments | Downstream | Emissions linked to your investments, mainly for investors and financial services | Equity and debt investments, project finance |
A PPN 006 Carbon Reduction Plan needs categories 4, 5, 6, 7 and 9. For each, the Cabinet Office technical standard uses the GHG Protocol minimum boundary: the Scope 1 and Scope 2 emissions of the hauliers, distributors, retailers, waste firms, transport operators and employees involved.
Which scope? Common UK sources
| Source | Scope | Note |
|---|---|---|
| Gas for your own boilers | Scope 1 | kWh from gas bills |
| Fuel in cars and vans your company owns or controls | Scope 1 | Litres of fuel, or distance driven |
| Refrigerant leaks from air conditioning | Scope 1 | Kilograms topped up in the year |
| Grid electricity for offices, shops or a factory | Scope 2 | Location-based figure; any market-based figure alongside it |
| District heating | Scope 2 | Heat and steam factor |
| Staff using their own or hire cars for work trips | Scope 3, category 6 | Includes reimbursed business mileage; mandatory under SECR for large unquoted companies and LLPs where they are responsible for purchasing the fuel |
| Trains, flights, taxis and hotels for work | Scope 3, category 6 | Hotel stays are optional |
| Commuting and homeworking | Scope 3, category 7 | Homeworking is optional |
| Couriers and hauliers you pay | Scope 3, category 4 | Inbound and outbound deliveries |
| Waste and recycling collections | Scope 3, category 5 | Tonnes by waste type and disposal route |
| Office supplies, IT services and professional services | Scope 3, category 1 | Can be estimated from spend |
| Grid losses and fuel production (well-to-tank) | Scope 3, category 3 | Optional in DESNZ guidance; apply consistently |
DESNZ says organisations should decide whether to include well-to-tank emissions and then apply that choice to all fuels and activities.
How to calculate Scope 1, 2 and 3 emissions
The UK Government method is simple: emissions equal activity data multiplied by a conversion factor. DESNZ publishes the factors each year.
- Set your boundary and reporting year, and use the same 12 months for every source.
- Collect activity data: kWh from gas and electricity bills, litres of fuel, kilograms of refrigerant topped up, distances travelled and tonnes of waste.
- Choose the factor set for that year. DESNZ says to use the factors that match the year of your data, so 2026 data uses the 2026 factors. See our guide to the GHG conversion factors.
- Multiply each activity by its factor to get kg CO2e, then divide by 1,000 for tonnes (tCO2e).
- Total each scope separately, and record the method and factor year you used.
| Source | Activity | 2026 factor | Emissions | Scope |
|---|---|---|---|---|
| Natural gas (boilers) | 40,000 kWh (gross CV) | 0.18231 kg CO2e per kWh | 7,292 kg = 7.29 tCO2e | Scope 1 |
| Diesel (company vans) | 3,000 litres | 2.58354 kg CO2e per litre | 7,751 kg = 7.75 tCO2e | Scope 1 |
| R410A refrigerant top-up | 2 kg | 1,924 kg CO2e per kg | 3,848 kg = 3.85 tCO2e | Scope 1 |
| Grid electricity | 50,000 kWh | 0.13096 kg CO2e per kWh | 6,548 kg = 6.55 tCO2e | Scope 2 (location-based) |
| National rail, business trips | 10,000 passenger.km | 0.03092 kg CO2e per passenger.km | 309 kg = 0.31 tCO2e | Scope 3, category 6 |
| Commercial and industrial waste to landfill | 5 tonnes | 520.58023 kg CO2e per tonne | 2,603 kg = 2.60 tCO2e | Scope 3, category 5 |
In this example Scope 1 is 18.89 tCO2e, Scope 2 is 6.55 tCO2e, and the two Scope 3 sources add 2.91 tCO2e. A Carbon Reduction Plan would also need figures for categories 4, 7 and 9.
Check units before you multiply. DESNZ notes that most energy billing is on a gross calorific value (CV) basis, which matches the unit of the natural gas factor, kWh (Gross CV).
Same electricity, lower figure in 2026
At the 2025 factor of 0.177, the same 50,000 kWh would be 8.85 tCO2e. The 2026 factor is 26% lower, partly because DESNZ changed its method to use more recent grid data. Bear this in mind when comparing years.
Which scopes do UK rules require?
| Rule | Who it applies to | Scopes required |
|---|---|---|
| SECR, quoted companies | UK quoted companies | Global Scope 1 and Scope 2, plus global energy use. Scope 3 is voluntary but strongly encouraged. |
| SECR, large unquoted companies and LLPs | Large unquoted companies and large limited liability partnerships | UK energy use and emissions from gas, electricity and transport fuel. This includes business travel in rental cars or employees' own vehicles where the company is responsible for purchasing the fuel, which is Scope 3. Other Scope 3 is voluntary but strongly encouraged where material. |
| PPN 006 Carbon Reduction Plan | Suppliers bidding for in-scope central government contracts above £5 million a year (including VAT), in procurements advertised on or after 24 February 2025 | All Scope 1 and Scope 2, plus Scope 3 categories 4, 5, 6, 7 and 9 |
| NHS 2024 CRP (from 1 April 2027) | NHS contracts below £5 million a year (including VAT) and above the relevant procurement thresholds | As PPN 006: Scope 1, Scope 2 and Scope 3 categories 4, 5, 6, 7 and 9, with a UK boundary as a minimum |
| 2027 NHS CRP (from 1 April 2027) | NHS contracts of £5 million a year or more (including VAT), and all new NHS frameworks | Scope 1, Scope 2 and all relevant Scope 3 categories on a global boundary, with an explanation for any category judged not relevant |
SECR has applied to financial years starting on or after 1 April 2019. Low energy users, which consumed 40MWh or less in the period, do not have to give the detailed figures but must state why in their report.
Under PPN 006, emissions must be calculated in tCO2e using the UK Government conversion factors, and the plan should be reviewed and updated each year. There is no requirement to have the footprint audited.
For procurements that start on or after 1 April 2027, NHS England's new requirements replace its previous Carbon Reduction Plan and Net Zero Commitment requirements. A plan that meets the 2027 NHS standard also meets PPN 006.
Need a Carbon Reduction Plan?
Our Carbon Reduction Plan builder works out your Scope 1, Scope 2 and the five required Scope 3 categories with the UK Government conversion factors for your reporting year, then produces the plan in the PPN 006 format. £99, no VAT.
Common mistakes to avoid
- Counting staff's own cars as Scope 1. Business trips in employees' own or hire cars are Scope 3, category 6. Only vehicles you own or control are Scope 1.
- Mixing commuting with business travel. Trips between home and work are category 7. Trips made for work are category 6.
- Reporting only a market-based figure. UK government guidance recommends showing any market-based figure alongside the location-based one, and the GHG Protocol requires both figures in markets like the UK where contracts such as renewable tariffs are available.
- Putting grid losses in Scope 2. Transmission and distribution losses are Scope 3.
- Using the wrong year's factors. Match the factor set to the year your activity data covers.
- Forgetting refrigerants. Air conditioning top-ups are Scope 1 and carry high factors per kilogram.
Questions
What are scope 1, 2 and 3 emissions?
Scope 1 is direct emissions from sources you own or control, such as boilers and company vehicles. Scope 2 is emissions from the electricity, heat, steam and cooling you buy. Scope 3 is all other indirect emissions in your value chain, from purchased goods to business travel and waste.
What are examples of scope 3 emissions?
Common examples are purchased goods and services, business travel by train, plane or taxi, staff commuting, waste sent to landfill or recycling, deliveries by couriers you pay, and the use and disposal of products you sell.
What are the 15 categories of scope 3 emissions?
Upstream: 1 purchased goods and services, 2 capital goods, 3 fuel- and energy-related activities, 4 upstream transportation and distribution, 5 waste generated in operations, 6 business travel, 7 employee commuting, 8 upstream leased assets. Downstream: 9 downstream transportation and distribution, 10 processing of sold products, 11 use of sold products, 12 end-of-life treatment of sold products, 13 downstream leased assets, 14 franchises, 15 investments.
Is electricity scope 1 or scope 2?
Electricity you buy is Scope 2. Losses in the grid on the way to you are Scope 3. DESNZ says renewable electricity you generate on site, for example from solar panels, is reported under Scope 1 with zero emissions.
Are company cars scope 1 or scope 3?
Cars and vans your business owns or controls are Scope 1. Staff using their own cars, or hire cars, for business trips is Scope 3, category 6. Commuting between home and work is Scope 3, category 7.
Is scope 3 reporting mandatory in the UK?
Not in general. It is optional under the GHG Protocol Corporate Standard and voluntary for quoted companies under SECR. Large unquoted companies and LLPs must include business travel in rental cars or employees' own vehicles where they are responsible for purchasing the fuel. Central government suppliers on in-scope contracts above £5 million a year must report five categories under PPN 006. In NHS procurements starting on or after 1 April 2027, suppliers on contracts of £5 million a year or more must report all relevant categories, and lower-value contracts above the procurement thresholds need the same five categories as PPN 006.
Which scope 3 categories does a Carbon Reduction Plan need?
Under PPN 006: category 4 upstream transportation and distribution, 5 waste generated in operations, 6 business travel, 7 employee commuting and 9 downstream transportation and distribution, plus all of Scope 1 and Scope 2.
What is the difference between location-based and market-based scope 2?
Location-based uses the average emissions of the grid where you use the electricity, which in the UK is the government grid factor (0.13096 kg CO2e per kWh for 2026). Market-based uses factors from your energy contracts, such as a certificate-backed renewable tariff. UK government guidance encourages the location-based figure and treats market-based as an optional addition shown alongside it. The GHG Protocol asks for both where such contracts are available, as they are in the UK.
Are refrigerant leaks scope 1?
Yes, for equipment you own or control. DESNZ suggests taking the amount of refrigerant topped up in the year and multiplying it by the gas's factor, for example 1,924 kg CO2e per kg for R410A.
What conversion factors should UK businesses use?
The UK Government GHG Conversion Factors for Company Reporting, published by DESNZ each year. Use the set that matches the year of your activity data.
Sources
- GHG Protocol: A Corporate Accounting and Reporting Standard, revised edition (PDF) (checked 10 October 2026)
- GHG Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard (PDF) (checked 10 October 2026)
- GHG Protocol: Scope 2 Guidance (2015) (checked 10 October 2026)
- DESNZ: Greenhouse gas reporting, conversion factors 2026 (checked 10 October 2026)
- DESNZ: Conversion factors 2026, full set (Introduction, UK electricity, Transmission and distribution, Fuels and Refrigerant worksheets) (checked 10 October 2026)
- DESNZ: Conversion factors 2026, major changes report (PDF) (checked 10 October 2026)
- DESNZ: Greenhouse gas reporting, conversion factors 2025 (checked 10 October 2026)
- GOV.UK: Environmental reporting guidelines, including Streamlined Energy and Carbon Reporting requirements (checked 10 October 2026)
- legislation.gov.uk: The Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 2018/1155) (checked 10 October 2026)
- Cabinet Office: PPN 006, Taking account of Carbon Reduction Plans (checked 10 October 2026)
- Cabinet Office: PPN 006 technical standard for completion of Carbon Reduction Plans (checked 10 October 2026)
- NHS England: 2027 NHS Carbon Reduction Plan requirements for the procurement of NHS goods, services and works (updated 21 July 2026) (checked 10 October 2026)
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