Do I have to report all 15 Scope 3 categories?

No. Under the GHG Protocol Scope 3 Standard you report the categories that are relevant to your business and explain any you leave out. A PPN 006 Carbon Reduction Plan needs five: categories 4, 5, 6, 7 and 9.

Which Scope 3 categories does PPN 006 require?

Category 4 upstream transportation and distribution, 5 waste generated in operations, 6 business travel, 7 employee commuting and 9 downstream transportation and distribution.

What if a category doesn't apply to my business?

Say so and give the reason. For example, a consultancy that sells no physical products can state that category 9 is not applicable. Don't leave it blank.

Is the spend-based method good enough?

As a starting point, yes. It turns money spent into emissions using average factors for each industry. It is quick but rough, so replace it with activity data or supplier figures for your biggest sources over time, and say which method you used.

Where are well-to-tank emissions reported?

In Scope 3 category 3, fuel- and energy-related activities, along with electricity transmission and distribution losses. They are not part of Scope 1 or 2.

The 15 Scope 3 categories: which ones an SME needs to report

The GHG Protocol splits Scope 3 into 15 categories: eight upstream, such as purchased goods, business travel and commuting, and seven downstream, such as transport and use of the products you sell. A UK SME usually needs categories 1 to 7 and sometimes 9, and a PPN 006 Carbon Reduction Plan must include five: categories 4, 5, 6, 7 and 9.

Updated 3 October 2026 by the Carbon Recycling team. Figures use the official UK government conversion factors and are checked against the current gov.uk guidance.

Why Scope 3 has categories

Scope 3 is every indirect emission in your value chain that is not purchased energy. That is a lot, so the GHG Protocol's Scope 3 Standard divides it into 15 categories. Each category has a clear boundary, which stops the same emissions being counted twice within your own report, and lets buyers compare like with like. If you are new to the scopes, start with our Scope 1, 2 and 3 guide.

All 15 categories at a glance

Category	What it covers	Does it matter for an SME?	Typical data
1. Purchased goods and servicesUpstream	Making everything you buy that isn't a capital item: stock, materials, office supplies, software, professional services, cleaning, catering, water.	Often the largest category, and the hardest to measure well.	Spend by supplier type, multiplied by spend-based factors; supplier-specific figures for your biggest suppliers.
2. Capital goodsUpstream	Making things you keep for years: vehicles, machinery, IT equipment, furniture, building work.	Relevant in years you buy vans, plant or a fit-out. Report the whole purchase in the year you buy it, not depreciated.	Fixed asset additions from your accounts, with spend-based factors.
3. Fuel- and energy-related activitiesUpstream	Extracting, refining and transporting the fuels you use (well-to-tank), and electricity lost in the grid (transmission and distribution losses).	Easy and worth including: it uses the same kWh and litres as your Scope 1 and 2.	Your energy and fuel data, with the well-to-tank and T&D factors in the government set.
4. Upstream transportation and distributionRequired by PPN 006Upstream	Transport of goods you buy from suppliers, and any transport or storage you pay a third party for, including outbound delivery you pay for.	Relevant to anyone using couriers, hauliers or third-party warehouses.	Tonne-kilometres from carriers, or spend on carriage with a spend-based factor.
5. Waste generated in operationsRequired by PPN 006Upstream	Disposal and treatment of your waste and wastewater by third parties.	Nearly every business has some. Usually small, but buyers expect to see it.	Tonnes by type and treatment from your waste contractor's reports; water bills for wastewater.
6. Business travelRequired by PPN 006Upstream	Travel for work in vehicles you don't own: trains, flights, taxis, hire cars, staff's own cars, and hotel stays.	Relevant to almost everyone.	Mileage claims, travel booking reports, expense data.
7. Employee commutingRequired by PPN 006Upstream	Staff travel between home and work, and optionally the energy used when working from home.	Relevant to everyone with staff. Often bigger than people expect.	A short staff survey of distance, mode and days in the office; homeworking hours.
8. Upstream leased assetsUpstream	Running assets you lease that are not already in your Scope 1 and 2.	Rarely needed: under operational control, leased offices and vehicles you run are already in Scope 1 and 2.	Energy data for the leased asset, or floor area estimates.
9. Downstream transportation and distributionRequired by PPN 006Downstream	Transport and storage of products you sell that you don't pay for, such as when the customer arranges collection or pays the carrier.	Relevant to businesses that ship goods. Service businesses can usually say it doesn't apply, and why.	Estimated tonne-kilometres of deliveries to customers.
10. Processing of sold productsDownstream	Energy your business customers use to process intermediate products you sell, such as turning your components into finished goods.	Manufacturers of parts and materials only.	Customer process data or industry averages.
11. Use of sold productsDownstream	Emissions when customers use what you sell, such as fuel burned in vehicles or energy used by appliances.	Significant for sellers of anything that uses energy or fuel; zero for most services.	Product energy use, expected lifetime and units sold.
12. End-of-life treatment of sold productsDownstream	Disposal of the products and packaging you sell at the end of their life.	Relevant to product businesses, especially consumer goods and packaging.	Weight of products and packaging sold, with UK waste treatment averages.
13. Downstream leased assetsDownstream	Running assets you own and lease to others, which they control.	Landlords and equipment hire firms.	Tenants' energy data or floor area estimates.
14. FranchisesDownstream	Emissions of franchisees operating under your brand, for franchisors.	Franchisors only.	Franchisee energy and fuel data.
15. InvestmentsDownstream	Emissions of companies you invest in or lend to.	Mainly banks, insurers and investors. Most SMEs can say it doesn't apply.	Investee emissions, apportioned by your share.

The five PPN 006 categories

The Cabinet Office's technical standard for Carbon Reduction Plans asks for all of Scope 1 and 2 plus five Scope 3 categories: 4, 5, 6, 7 and 9. All five can be estimated mostly from your own records, without waiting for data from suppliers. If one does not apply, say so in the plan. Our Carbon Reduction Plan guide covers the rest of the plan, and our free template has a row for each category.

Two of the five catch people out. Category 9 only covers transport you do not pay for; delivery you pay a courier for is category 4. Category 7 needs commuting data you will not find in your accounts, so plan a short staff survey early: home postcode district or distance, usual mode of travel, and days a week in the workplace.

Which categories an SME should report

Outside PPN 006, a sensible order of work for most small and medium-sized businesses is:

Categories 3, 5, 6 and 7. Cheap to measure from data you already hold, and expected by most buyers.
Categories 4 and 9 if you move goods.
Categories 1 and 2 using the spend-based method from your accounts. These are often the largest categories, which is why customers and investors increasingly ask for them.
Categories 10 to 14 only if your business model makes them relevant: you make parts others process, sell energy-using products, lease out property or run franchises.

The GHG Protocol does not ask you to measure categories that are not relevant, but it does ask you to explain exclusions. The usual tests of relevance are size, influence, risk, what stakeholders expect, and whether the activity is outsourced.

Three ways to calculate Scope 3

Method	How it works	When to use it
Activity-based	Physical quantities (miles, tonnes, room nights) × UK government conversion factors	Travel, commuting, waste, freight. The default for the PPN 006 categories
Spend-based	Money spent × average emissions per £ for that industry	Purchased goods, services and capital goods, as a first estimate
Supplier-specific	Emissions your supplier calculates and allocates to you	Your biggest suppliers, once they can provide it

The UK government's conversion factors cover the activity-based categories. For spend-based estimates, Defra publishes emissions per pound of spending by industry as part of its UK carbon footprint statistics. These factors are averages and are updated less often, so treat the results as estimates and say so. Our footprint guide has a worked example that uses both methods.

Avoiding double counting

Company-owned vehicles are Scope 1. Only travel in vehicles you do not own or control belongs in category 6.
Fuel you buy is Scope 1; the emissions from producing that fuel are category 3. They are separate and both count.
A courier you pay is category 4 even if it delivers to your customer. Category 9 is only for transport you do not pay for.
Do not put the same purchase in category 1 and category 2. Capital items go in category 2 only.

How Carbon Recycling helps

Every activity you add is placed in its Scope 3 category automatically, using the government factor for your reporting year. Business travel, commuting surveys, homeworking, waste, water and freight are built in, and on the Growth plan you can request emissions data from your suppliers and record it against the right category. Your Carbon Reduction Plan pulls the five PPN 006 categories straight through.