Scope 1, 2 and 3 Emissions
A tonne of CO₂ from a gas-fired power station reaches the atmosphere once. On paper it can appear three times: in the generator’s footprint, in the footprint of the factory that buys the power, and in the footprint of everyone who buys the factory’s products. None of those reports is wrong.
The scopes are not three kinds of emissions — they are three answers to one question: whose emission is this?
Scope 1 is emissions from sources a company owns or controls. Scope 2 is from the electricity, heat and steam it buys. Scope 3 is every other emission in its value chain, upstream and downstream. Together they make up a GHG Protocol inventory.
What the three scopes are
Scopes 1, 2 and 3 are the GHG Protocol’s way of dividing a company’s greenhouse-gas emissions by where they happen relative to the company. Scope 1 is direct; scopes 2 and 3 are indirect. Every emission in a corporate inventory belongs to exactly one of them.
The framework comes from the GHG Protocol Corporate Standard, first published in 2001 and revised in 2004. It solved a practical problem. Companies had been reporting whatever emissions they chose, so two firms with the same operations could publish wildly different totals. The scopes gave everyone the same three boxes, with a fixed rule for what goes in each.
The split follows control. Emissions from sources the company owns or controls — its boilers, furnaces, vehicles and process equipment — are scope 1. Emissions released at someone else’s power station to make the electricity the company buys are scope 2. Everything else the company’s activity causes, from the steel in its products to its staff’s commute to the fuel its customers burn using what it sells, is scope 3.
Scope 2 gets its own box for a reason. Purchased electricity is a large, measurable and controllable emission for almost every organisation, and it is the one indirect source a company can change quickly — by using less, or buying differently. Separating it from the rest of the value chain makes that lever visible.
The scopes side by side
| Scope 1 | Scope 2 | Scope 3 | |
|---|---|---|---|
| In one line | What you burn, leak or process yourself | The energy you buy | Everything else in your value chain |
| Direct or indirect | Direct | Indirect | Indirect |
| Where it physically happens | At your own sites and vehicles | At the power station or heat plant | At suppliers, carriers, customers, waste sites |
| Typical sources | Combustion in boilers and vehicles, process chemistry, refrigerant leaks | Grid electricity, purchased heat, steam and cooling | Purchased goods, freight, business travel, commuting, use and end of life of sold products |
| Structure | Four source types | Two methods: location-based and market-based | 15 categories, upstream and downstream |
| Data quality | High — your own meters and invoices | High — energy bills × published factors | Mixed — much of it estimated |
| Governing document | Corporate Standard | Scope 2 Guidance (2015) | Scope 3 Standard (2011) |
How the GHG Protocol defines them
Direct and indirect. “Direct GHG emissions are emissions from sources that are owned or controlled by the company.” “Indirect GHG emissions are emissions that are a consequence of the activities of the company but occur at sources owned or controlled by another company.”
Scope 1. “Companies report GHG emissions from sources they own or control as scope 1.”
Scope 2. “Scope 2 accounts for GHG emissions from the generation of purchased electricity consumed by the company.” The standard adds that scope 2 emissions “physically occur at the facility where electricity is generated.” The 2015 Scope 2 Guidance extends this to purchased heat, steam and cooling.
Scope 3. “Scope 3 is an optional reporting category that allows for the treatment of all other indirect emissions. Scope 3 emissions are a consequence of the activities of the company, but occur from sources not owned or controlled by the company.”
Note the word optional. Under the 2004 Corporate Standard, scopes 1 and 2 are required and scope 3 is not. The 2011 Scope 3 Standard set out how to report it in full, and most modern disclosure rules now require it, but the GHG Protocol itself never made it mandatory. That history is why so many companies still publish scope 1 and 2 only.
The Scope 2 Guidance is itself being revised. The GHG Protocol held a public consultation from 20 October 2025 to 31 January 2026 and received nearly 1,100 responses from 56 countries. In July 2026 its Independent Standards Board called for further work on market-based reporting approaches before any final text. Until a revised standard is published, the 2015 Guidance — with dual location-based and market-based reporting — is what applies.
How to decide which scope an emission is in
Most classification questions are settled by three tests, applied in order. The first is about the boundary, not the emission.
- Is the source inside your organisational boundary? You choose one consolidation approach — operational control, financial control or equity share — and apply it to every site and vehicle. That choice decides what counts as “owned or controlled”.
- If yes, is the emission released at that source? Fuel burned in your boiler, refrigerant leaking from your chiller, CO₂ from your kiln’s chemistry: scope 1.
- If no, is it from generating energy you bought? Electricity, heat, steam or cooling delivered to you: scope 2. Anything else caused by your activity — including the upstream emissions of extracting and transporting that same fuel and power — is scope 3.
The edge cases follow from these tests. A delivery van you lease and run is usually scope 1 under operational control; the same journey by a hired courier is scope 3. Fuel you burn to make your own electricity is scope 1, not scope 2. The well-to-tank emissions of the diesel in your van are scope 3, category 3. When in doubt, the scope classification checker walks through the same tests.
The scopes do not stop the same tonne being counted by different companies — they are designed so that it is. What they stop is one company counting the same tonne twice.
That is the deliberate design. Your scope 2 is your utility’s scope 1; your scope 3 is your suppliers’ scope 1 and 2. Summing scope 3 across companies therefore double counts by construction, which is why double counting between companies is accepted and double counting within one inventory is not.
Why scope 3 is usually the biggest
For most companies outside heavy industry and energy, scope 3 dwarfs the other two. Scopes 1 and 2 cover what happens at the company’s own sites. Scope 3 covers the energy and materials embedded in everything it buys and the emissions from everything it sells, which is usually far more.
Average ratio of upstream scope 3 supply-chain emissions to scope 1 + 2 emissions, companies disclosing to CDP, 2023 data. Downstream scope 3 is not included. Source: CDP and BCG, Scope 3 Upstream: Big Challenges, Simple Remedies, June 2024.
That 26× is an average across sectors, and it counts only the upstream half. Downstream categories can be larger still: for a car maker or an oil producer, the use of sold products — fuel burned in customers’ engines — is often the largest single item in the whole inventory. The opposite also happens. A cement plant or a power generator has a scope 1 that outweighs most of its value chain.
The practical point is that a scope 1 and 2 footprint often describes a small fraction of a company’s climate impact. Read a “carbon footprint” without scope 3 as a partial figure unless the company says why scope 3 is immaterial.
How each scope is calculated
All three scopes use the same basic equation — activity data × emission factor — but the data and the factors behave very differently.
| Scope | Activity data | Typical factor | Example factor (UK, current) |
|---|---|---|---|
| Scope 1 | Fuel volumes, refrigerant top-ups, process outputs | Fuel combustion factors; GWPs for leaked gases | Diesel 2.58354 kg CO₂e per litre |
| Scope 2 | kWh of electricity and heat from bills or meters | Grid average (location-based) or contract-specific (market-based) | UK grid 0.131 kg CO₂e per kWh |
| Scope 3 | Spend, tonnes, tonne-km, passenger-km, supplier data | Spend-based (per £ or $), average-data, or supplier-specific | Varies by category and method |
Scopes 1 and 2 are mostly calculated from your own invoices, so they can be accurate to a few per cent. Scope 3 usually starts as an estimate — often spend multiplied by an industry-average factor — and improves as suppliers share their own data. That is why scope 3 figures carry more uncertainty, and why a year-on-year change in scope 3 can come from better data rather than real reductions.
Scope 2 has one extra rule. Under the 2015 Guidance, companies report it twice: once with the average emissions of the grid they draw from (location-based), and once reflecting the electricity they contracted for, such as renewable tariffs and certificates (market-based). The location-based vs market-based comparison explains when the two diverge.
What has to be reported
The GHG Protocol is a voluntary standard, but it is the measurement basis that most disclosure rules point to. In practice:
- Scope 1 and scope 2 are required by the GHG Protocol Corporate Standard and by every major mandatory regime that asks for emissions at all.
- Scope 3 is required by the EU’s European Sustainability Reporting Standards (ESRS E1) and by the ISSB’s IFRS S2, subject to materiality and phase-in reliefs, and by science-based target setting when it is a large share of the total.
- Scope 2 in both methods is expected wherever the 2015 Guidance is followed.
Reporting rules change often; check the specific regime’s current text before relying on a phase-in date. What does not change is the vocabulary — every one of these regimes uses the three scopes as defined by the GHG Protocol.
Worked micro-example
A UK services firm with one office and two vans tallies its year. Scope 1 and 2 use UK DEFRA 2026 factors at the time of writing; the scope 3 lines are illustrative estimates of the kind a first inventory produces from spend and travel data.
| Item | Calculation | Emissions | Scope |
|---|---|---|---|
| Natural gas for heating | 100,000 kWh × 0.18231 | 18.2 tCO₂e | 1 |
| Diesel in two vans | 3,000 L × 2.58354 | 7.8 tCO₂e | 1 |
| Grid electricity (location-based) | 150,000 kWh × 0.131 | 19.7 tCO₂e | 2 |
| Purchased goods and services | spend-based estimate | 260.0 tCO₂e | 3 (cat. 1) |
| Business travel | flights and hotels | 55.0 tCO₂e | 3 (cat. 6) |
| Employee commuting | staff survey | 40.0 tCO₂e | 3 (cat. 7) |
| Total | — | 400.7 tCO₂e | — |
Scope 1 is 26.0 tCO₂e and scope 2 is 19.7 tCO₂e, so the firm’s operational footprint is 45.7 tCO₂e. Scope 3 is 355.0 tCO₂e — 89% of the total and about 7.8 times scopes 1 and 2 combined. A report that stopped at scope 2 would show about a ninth of the picture.
Common mistakes
- Putting own-generated electricity in scope 2. Fuel burned in your own generator or CHP plant is scope 1. Scope 2 is only for energy you buy.
- Mixing consolidation approaches. Choose operational control, financial control or equity share once and apply it everywhere, or leased assets and joint ventures land in the wrong scope.
- Counting the same emission twice inside one inventory. Fuel upstream emissions (well-to-tank) belong in scope 3 category 3, not on top of scope 1 again.
- Reporting only one scope 2 method. The 2015 Guidance expects both location-based and market-based totals.
- Calling scope 1 + 2 the “carbon footprint”. For most companies it is a minority of the total. State the boundary.
- Treating scope 3 trends as reductions. A falling scope 3 figure can come from a better factor or method. Check the restatement notes.
Not sure which scope a source belongs in? Run it through the checker, then roll all three scopes into one inventory.
Frequently asked questions
They are the three categories the GHG Protocol uses to divide a company’s greenhouse-gas emissions. Scope 1 is direct emissions from sources the company owns or controls. Scope 2 is indirect emissions from generating the electricity, heat, steam and cooling it buys. Scope 3 is all other indirect emissions in its value chain, both upstream and downstream.
Scope 1 emissions are released at sources the company owns or controls, such as its boilers, vehicles and refrigeration. Scope 2 emissions are released at someone else’s power station or heat plant to produce the energy the company buys. If the company generates its own electricity, the fuel it burns to do so is scope 1, not scope 2.
Under the GHG Protocol Corporate Standard, scope 3 is optional. Many disclosure regimes now require it, though: the EU’s ESRS E1 and the ISSB’s IFRS S2 both call for scope 3 disclosure, subject to materiality and transition reliefs, and science-based targets generally require scope 3 coverage when it is a large share of emissions.
Scope 3, for most companies. CDP and BCG found that companies’ upstream supply-chain emissions alone averaged 26 times their scope 1 and 2 emissions in 2023 data. Exceptions are energy-intensive operators such as power generators and cement producers, whose scope 1 can dominate.
Yes, by design. A power station’s scope 1 emissions are the scope 2 emissions of its customers and part of their customers’ scope 3. The scopes prevent double counting within one company’s inventory, not across companies, so adding up different companies’ footprints overstates the total.
Need someone who does this? 6 carbon accounting & inventory providers in our directory →