Where the three scopes come from
The scopes are defined in the GHG Protocol Corporate Standard, the international rulebook for company greenhouse gas accounting. They exist so that two businesses never both count the same emissions as their own direct emissions. Your electricity is Scope 2 for you and Scope 1 for the power station. Your supplier's boiler is Scope 1 for them and part of your Scope 3.
The UK government's own reporting guidance, the Environmental Reporting Guidelines, uses the same three scopes. So do SECR reports, PPN 006 Carbon Reduction Plans and the new UK Sustainability Reporting Standards. Learn them once and they apply everywhere.
Scope 1: direct emissions
Emissions from sources your organisation owns or controls. For a typical UK business that means:
- Fuel burned in buildings: mains gas, heating oil, LPG, and diesel for generators.
- Fuel burned in vehicles you own or lease: diesel and petrol for company cars, vans, lorries and plant.
- Refrigerant leaks: air conditioning, heat pumps, chillers and fridges lose gas over time. Refrigerants are potent, so a few kilograms can matter. The amount your engineer tops up each year is a good measure of what leaked.
- Process emissions: gases released by chemical reactions in some manufacturing, such as making cement or lime. Rare for SMEs.
Scope 2: purchased energy
Emissions from generating the electricity, heat, steam or cooling you buy. For most UK businesses this is simply grid electricity. The GHG Protocol asks you to report Scope 2 in two ways:
| Method | What it uses | Effect of a green tariff |
|---|---|---|
| Location-based | The average UK grid factor: 0.13096 kg CO2e per kWh in the 2026 government factors | None |
| Market-based | Your supplier's fuel mix, or zero for electricity backed by REGO certificates | Can bring Scope 2 to zero |
SECR and PPN 006 both work with the location-based figure, so always calculate it. If you are on a renewable tariff, show the market-based figure alongside, and say which is which. The GHG Protocol is revising its Scope 2 guidance; it published feedback from its public consultation in July 2026 and the rules have not changed yet.
Scope 3: the rest of your value chain
Every other emission your business causes but does not control. The GHG Protocol splits it into 15 categories: eight upstream (from your suppliers and staff) and seven downstream (from what happens after you sell). Our guide to the 15 Scope 3 categories explains each one. The ones SMEs meet most often are:
- Category 1, purchased goods and services: everything you buy, from stock to software and accountants.
- Category 3, fuel- and energy-related activities: well-to-tank emissions from producing your fuels, and electricity lost in the grid.
- Category 4, upstream transport: couriers and hauliers bringing goods to you, or that you pay for.
- Category 5, waste: what happens to your rubbish, recycling and wastewater.
- Category 6, business travel: trains, flights, hotels, taxis and staff's own cars on business.
- Category 7, employee commuting: getting to work, and homeworking if you include it.
Where common activities belong
| Activity | Scope | Notes |
|---|---|---|
| Gas for the office boiler | 1 | From your gas bills, in kWh |
| Diesel in company vans | 1 | Fuel card litres are the best data |
| Air conditioning top-ups | 1 | From your maintenance records, in kg of refrigerant |
| Charging company electric vans at your premises | 2 | Already in your electricity bill |
| Office electricity | 2 | Including a share of a landlord's supply if you can get it |
| Heat from a district heat network | 2 | Bought heat, not fuel you burn |
| Well-to-tank and grid losses for your energy | 3 (category 3) | Calculated from the same kWh and litres |
| Staff mileage in their own cars, reimbursed | 3 (category 6) | SECR counts this fuel too |
| Flights, trains and hotels | 3 (category 6) | From your travel booking reports |
| Staff commuting | 3 (category 7) | Usually estimated from a staff survey |
| Waste collections | 3 (category 5) | Tonnes from your waste contractor |
| Cloud hosting, IT kit, professional services | 3 (category 1 or 2) | Equipment you keep for years is category 2, capital goods |
Try your own energy and fuel figures in our kWh to CO2e calculator, which shows the Scope 1 or 2 figure and the Scope 3 well-to-tank element separately.
Which scopes UK rules ask for
| Requirement | Scope 1 | Scope 2 | Scope 3 |
|---|---|---|---|
| SECR (large unquoted companies and LLPs) | From UK gas and transport fuel | UK electricity | Only fuel for business travel in employee or hire cars; the rest is optional |
| PPN 006 Carbon Reduction Plan | All | All | Categories 4, 5, 6, 7 and 9 |
| UK SRS S2 (listed companies from 2027) | All | Location-based, plus contractual instruments | Material categories, with one year of relief |
| Customer questionnaires | Varies. Most ask for Scope 1 and 2 at least, and increasingly some Scope 3 | ||
Not sure whether SECR applies? Use our SECR checker. Need a Carbon Reduction Plan? Our free PPN 006 template sets out the scopes in the order evaluators expect.
Choosing your boundary first
Before you sort anything into scopes, decide what counts as "your" business. Most UK SMEs use operational control: you include everything your organisation runs day to day, whether you own it or lease it. Under that approach a leased office you run is in your Scope 1 and 2. A building you let to a tenant who runs it is not; it is in your Scope 3, category 13, if you report it at all. Write the choice down, because PPN 006 and SECR both expect you to apply the same boundary every year.
Common mistakes
- Counting a renewable tariff as zero without also reporting the location-based figure.
- Putting employees' own cars in Scope 1. Only vehicles the business owns or leases go there.
- Forgetting refrigerants. They are Scope 1 and easy to miss.
- Double counting electric vehicle charging: if you charge at your premises it is already in your electricity bill.
- Using a mix of factor years. Use the government set for your reporting year throughout.
Ready to put numbers on each scope? Our step-by-step footprint guide walks through a full worked example.
How Carbon Recycling helps
You add bills, fuel cards, mileage claims and waste reports, and Carbon Recycling sorts every line into the right scope and Scope 3 category automatically, with the government factor for your reporting year. Location-based and market-based Scope 2 are both calculated, and each figure shows its factor ID so a buyer or auditor can check it.