How to calculate Scope 1, 2 and 3 emissions for a small UK business

Scope 1 covers greenhouse gas emissions from sources your company owns or controls directly. For most small UK businesses, this means gas heating and company vehicle fuel — and if you have neither, your Scope 1 may legitimately be zero.

According to the GHG Protocol, Scope 1 includes:

• Natural gas — burned in your office or premises for heating. You find this on your gas bill in kWh.
• Company vehicles — fuel burned in vehicles owned or leased by your company. You need litres of petrol or diesel, or mileage if you claim it.

If you do not have gas heating and do not own company vehicles, your Scope 1 emissions may be zero. According to DEFRA, that is perfectly normal for many service businesses and should be reported honestly in your CRP.

Scope 2 is the electricity you buy from the grid, and it is the simplest scope to calculate. Your electricity bill shows your annual consumption in kWh, which you multiply by the DEFRA grid factor.

According to DEFRA's 2024 conversion factors, the UK grid electricity factor is approximately 0.20705 kgCO2e per kWh — meaning every 1,000 kWh of electricity produces roughly 0.207 tonnes of CO2. You can learn more about how we apply these factors on our methodology page.

Scope 3 covers all indirect emissions in your value chain, from business travel to purchased goods. The GHG Protocol defines 15 categories, but PPN 006 only requires you to report a minimum of five.

According to the GHG Protocol Corporate Value Chain Standard, Scope 3 typically accounts for 70-90% of a company's total emissions. For most small businesses, the most relevant and easiest to calculate categories are:

• Business travel — flights, rail, taxis, and hotel stays
• Employee commuting — estimated from average commute distances
• Waste generated in operations — estimated from waste collection frequency and bin sizes
• Water supply and treatment — from your water bill in cubic metres
• Purchased goods and services — often estimated using spend-based factors

You need 12 months of utility bills and basic information about your business operations. Most of this data is already in your accounts or can be requested from your energy supplier.

To calculate your full carbon footprint, gather the following:

• 12 months of gas bills (kWh)
• 12 months of electricity bills (kWh)
• Fuel receipts for company vehicles (litres or mileage)
• Business travel records (flights, rail, car mileage)
• Number of employees and average commute distance
• Water bill (cubic metres, if available)

CarbonPass extracts the data from your uploaded bills automatically and fills in standard estimates for categories where you do not have exact figures. According to DEFRA, using estimates with documented methodology is acceptable for Scope 3 categories.

DEFRA publishes updated emission factors every year, and using them is mandatory for PPN 006 compliance. These are the official conversion rates that translate your activity data into tonnes of CO2 equivalent.

According to DEFRA's 2024 greenhouse gas reporting guidelines, the key conversion factors for small businesses are:

CarbonPass uses the latest DEFRA 2024 factors for all calculations, so you do not need to look them up or apply them manually. You can see how we use these factors on our methodology page.

What are Scope 1 emissions?

Scope 1 emissions are direct greenhouse gas emissions from sources your company owns or controls. For most small businesses, this means natural gas burned in boilers and fuel used in company-owned vehicles.

What are Scope 2 emissions?

Scope 2 emissions are indirect emissions from the generation of purchased electricity, steam, heating, and cooling. For most UK businesses, this is simply the electricity you buy from the grid.

What are Scope 3 emissions?

Scope 3 emissions are all other indirect emissions that occur in your value chain — both upstream and downstream. For PPN 006, you must report at least five categories, typically including business travel, employee commuting, waste, water, and purchased goods and services.

Do I need to calculate all 15 Scope 3 categories?

No. PPN 006 requires a minimum of five Scope 3 categories. Most small businesses report business travel, employee commuting, waste disposal, water supply, and one purchased goods category. CarbonPass guides you through the most relevant categories.

What are DEFRA emission factors?

DEFRA (Department for Environment, Food and Rural Affairs) publishes annual conversion factors that translate activity data — like kWh of gas or litres of fuel — into tonnes of CO2 equivalent. Using DEFRA factors is mandatory for PPN 006 compliance.

How do I find my energy consumption in kWh?

Your gas and electricity bills show your consumption in kWh. If you only have costs, your energy supplier can provide consumption data. CarbonPass can also extract kWh figures from uploaded bill images automatically.

What if my Scope 1 emissions are zero?

That is perfectly normal. Many service businesses that rent office space and do not own company vehicles have zero Scope 1 emissions. You still report zero in your CRP — it is a valid and honest figure.

How accurate do my emission calculations need to be?

According to the GHG Protocol, you should use the best available data and recognised conversion factors. DEFRA factors are the accepted standard for UK businesses. Estimates are acceptable for Scope 3 categories where exact data is unavailable, provided you document your methodology.