Scope 1, 2 and 3 Emissions: SECR Reporting Explained
Understanding emission scopes is fundamental to SECR compliance and carbon accounting. If you're responsible for environmental reporting at a UK business, you'll need to master the distinction between Scope 1, 2, and 3 emissions to accurately calculate and report your organisation's carbon footprint.
This comprehensive guide explains the GHG Protocol emission scope framework, how it applies to SECR reporting requirements, and provides practical examples to help you categorize your emissions correctly.
What Are Emission Scopes?
The concept of emission scopes comes from the GHG Protocol Corporate Standard, the international framework for measuring and reporting greenhouse gas emissions. The protocol divides emissions into three distinct categories based on where they occur and who controls them.
This classification system serves several purposes:
- Prevents double counting: Ensures emissions aren't counted multiple times across different organisations
- Clarifies responsibility: Identifies which organisation should report which emissions
- Enables meaningful comparisons: Allows like-for-like comparisons between companies
- Supports reduction strategies: Helps identify where emissions occur and who can control them
Understanding these scopes is essential for SECR compliance, as UK regulations require reporting of Scope 1 and 2 emissions (with Scope 3 recommended but optional).
Scope 1 Emissions: Direct Emissions
Definition
Scope 1 emissions are direct greenhouse gas emissions from sources that your organisation owns or controls. These are emissions that physically occur at your facilities or from your assets.
What's Included in Scope 1
Company Vehicles
All fuel combustion in vehicles you own or lease:
- Cars, vans, and trucks in your company fleet
- Forklifts and other on-site vehicles
- Construction equipment and machinery
- Company-owned motorcycles or scooters
Example: If your business operates 10 delivery vans using diesel, the combustion emissions from that diesel fuel are Scope 1 emissions.
Calculation: Litres of diesel × diesel emission factor = tCO2e
Using UK Government conversion factors: 100 litres diesel × 2.69 kgCO2e/litre ÷ 1,000 = 0.269 tCO2e
On-Site Fuel Combustion
Burning of fuels at your facilities:
- Natural gas for space heating, hot water, or industrial processes
- Oil for heating systems
- LPG (liquid petroleum gas) for heating or equipment
- Coal or biomass for heating or industrial processes
Example: Your office building uses natural gas for heating. The combustion of that gas in your boilers produces Scope 1 emissions.
Calculation: kWh of gas consumed × gas emission factor = tCO2e
Using UK Government conversion factors: 50,000 kWh gas × 0.18316 kgCO2e/kWh ÷ 1,000 = 9.16 tCO2e
Refrigerants and Fugitive Emissions
Leakage of refrigerants from:
- Air conditioning systems
- Refrigeration units (cold storage, display cases)
- Industrial cooling systems
- Heat pumps using refrigerant gases
Example: Your warehouse refrigeration system leaks 5kg of R404A refrigerant during the year. This is a Scope 1 emission.
Calculation: kg of refrigerant leaked × refrigerant global warming potential = tCO2e
5 kg R404A × 3,922 GWP = 19.61 tCO2e
Process Emissions
Emissions from industrial or chemical processes:
- Chemical reactions that release CO2 (e.g., cement production)
- Metal production processes
- Chemical manufacturing
- Waste treatment processes on-site
Example: A cement manufacturer produces CO2 as part of the calcination process (converting limestone to lime). These process emissions are Scope 1.
What's NOT Included in Scope 1
- Electricity purchased from the grid (this is Scope 2)
- Employee-owned vehicles used for business (this is Scope 3)
- Upstream production of fuels you purchase (this is Scope 3)
- Waste disposal emissions at third-party facilities (this is Scope 3)
Scope 1 and SECR
SECR Requirement: Scope 1 emissions are mandatory for all companies subject to SECR reporting.
Your SECR report must include:
- Total Scope 1 emissions in tonnes CO2 equivalent (tCO2e)
- Breakdown by fuel type (gas, transport fuel, etc.) - recommended but not mandatory
- Calculation methodology and conversion factors used
Scope 2 Emissions: Indirect Energy Emissions
Definition
Scope 2 emissions are indirect emissions from the generation of purchased energy consumed by your organisation. You don't directly produce these emissions, but they occur because of your energy consumption.
What's Included in Scope 2
Purchased Electricity
Emissions from generating the electricity you consume:
- Grid electricity for lighting, equipment, computers, etc.
- Electricity for heating (electric heaters, heat pumps)
- Electricity for air conditioning and cooling
- Electricity for electric vehicle charging (company-owned EVs)
Example: Your office consumes 100,000 kWh of grid electricity annually. The power station that generated that electricity produced emissions. Those generation emissions are your Scope 2.
Calculation: kWh electricity consumed × electricity emission factor = tCO2e
Using UK Government conversion factors (2025): 100,000 kWh × 0.21233 kgCO2e/kWh ÷ 1,000 = 21.23 tCO2e
Purchased Heat or Steam
If you purchase heat or steam from a third party:
- District heating systems
- Combined Heat and Power (CHP) plants supplying your building
- Steam from external generation facilities
Example: Your office is in a building connected to a district heating network. The heat you consume (and pay for) from this network generates Scope 2 emissions.
Calculation: kWh of heat consumed × heat emission factor = tCO2e
Purchased Cooling
If you purchase chilled water or cooling services:
- Centralised cooling systems serving multiple buildings
- District cooling networks
Note: Purchased cooling is less common in the UK compared to other regions.
Location-Based vs Market-Based Methods
The GHG Protocol recognizes two methods for calculating Scope 2 emissions:
Location-Based Method
Uses the average emissions intensity of the electricity grid where you're located.
UK Example: Use the official UK grid average emission factor published annually by DEFRA (0.21233 kgCO2e/kWh for 2025).
Pros: Simple, consistent, based on actual grid mix
Cons: Doesn't reflect renewable energy purchases
Market-Based Method
Reflects emissions from specific electricity products or suppliers you've chosen.
Renewable Energy Contracts: If you purchase electricity with Renewable Energy Guarantees of Origin (REGOs), you can claim 0 gCO2e/kWh for that portion.
Example: You purchase 100% renewable electricity backed by REGOs. Under the market-based method, your Scope 2 emissions could be zero.
SECR Requirement: SECR regulations don't mandate a specific method. Most UK businesses use the location-based method for simplicity and conservatism. If you use market-based, you must clearly explain this in your methodology.
What's NOT Included in Scope 2
- Natural gas you burn on-site (this is Scope 1)
- Emissions from generating electricity you produce and consume yourself (this is Scope 1)
- Electricity transmission and distribution losses (technically Scope 3)
- Renewable electricity generation you own and use (zero emissions, part of your energy inventory but not Scope 1 or 2)
Scope 2 and SECR
SECR Requirement: Scope 2 emissions are mandatory for all companies subject to SECR reporting.
Your SECR report must include:
- Total Scope 2 emissions in tonnes CO2 equivalent (tCO2e)
- Clear statement of whether location-based or market-based method was used
- Calculation methodology and conversion factors used
Scope 3 Emissions: Other Indirect Emissions
Definition
Scope 3 emissions are all other indirect emissions that occur in your value chain, both upstream and downstream of your operations. These are emissions that result from your activities but occur at sources you don't own or control.
Why Scope 3 Matters
For most organisations, Scope 3 represents the largest portion of their total carbon footprint:
- Service businesses: 70-90% of emissions are typically Scope 3
- Manufacturing: 50-80% of emissions are typically Scope 3
- Heavy industry: 30-60% of emissions are typically Scope 3
However, Scope 3 is much more complex to measure and report.
The 15 Categories of Scope 3 Emissions
The GHG Protocol divides Scope 3 into 15 distinct categories:
Upstream Scope 3 Emissions (Categories 1-8)
1. Purchased Goods and Services
- Emissions from producing goods and services you buy
- Example: Emissions from manufacturing the laptops, furniture, and office supplies you purchase
2. Capital Goods
- Emissions from producing capital assets (buildings, equipment, vehicles)
- Example: Emissions from manufacturing the company vehicles you purchase
3. Fuel and Energy-Related Activities
- Upstream emissions from producing fuels and energy you consume
- Transmission and distribution losses
- Example: Emissions from extracting, refining, and transporting the diesel you burn (the burning itself is Scope 1; this is the upstream production)
4. Upstream Transportation and Distribution
- Emissions from transporting purchased goods from suppliers to you
- Example: Supplier's truck delivering raw materials to your facility
5. Waste Generated in Operations
- Emissions from disposing of waste your operations generate
- Example: Emissions from incinerating or landfilling your business waste at third-party facilities
6. Business Travel
- Emissions from employee travel for business purposes in vehicles not owned by your company
- Example: Employee flights, train journeys, rental cars, taxi rides, personal vehicle mileage reimbursement
7. Employee Commuting
- Emissions from employees traveling between home and work
- Example: Emissions from employee cars, buses, trains used for daily commuting
8. Upstream Leased Assets
- Emissions from operating leased assets (if not already included in Scope 1 or 2)
- Example: Emissions from a leased warehouse operated by the lessor
Downstream Scope 3 Emissions (Categories 9-15)
9. Downstream Transportation and Distribution
- Emissions from transporting sold products from you to end customer
- Example: Third-party courier delivering your products to customers
10. Processing of Sold Products
- Emissions from further processing of intermediate products you sell
- Example: If you sell flour to bakeries, emissions from baking the bread
11. Use of Sold Products
- Emissions from customer use of products you sell
- Example: If you sell cars, emissions from customers driving those cars over their lifetime
12. End-of-Life Treatment of Sold Products
- Emissions from disposing of products you sell at end of their life
- Example: Recycling, incineration, or landfilling of products you manufactured
13. Downstream Leased Assets
- Emissions from operating assets you own and lease to others
- Example: If you lease office space to tenants, their energy consumption
14. Franchises
- Emissions from franchise operations (if you're a franchisor)
- Example: McDonald's would include emissions from franchise locations
15. Investments
- Emissions from investments you make (relevant for financial services)
- Example: Bank's emissions from companies they've provided loans to
Scope 3 and SECR
SECR Requirement: Scope 3 emissions are optional under current SECR regulations. You're not required to report them, but you can if you choose.
Practical Approach: Most UK businesses subject to SECR don't report Scope 3 due to:
- Data availability challenges
- Complexity of calculations
- Lack of standardized methodologies
- Reliance on estimates and assumptions
Trend: Pressure is growing for mandatory Scope 3 reporting, particularly:
- Category 6 (Business Travel) - relatively easy to measure
- Category 3 (Fuel and Energy-Related Activities) - often included by default in conversion factors
- Supply chain emissions for businesses with significant procurement
If you choose to report Scope 3 in your SECR disclosure, clearly state which categories you've included and your methodology.
Practical Examples: Categorizing Emissions
Let's work through several real-world scenarios to clarify scope classifications.
Example 1: Technology Company
Business: Software development company with 200 employees in a leased office
Emissions:
- Office electricity: 150,000 kWh → Scope 2
- Natural gas for heating: 80,000 kWh → Scope 1
- Company car fleet: 10 vehicles, 20,000 litres diesel → Scope 1
- Employee flights for client meetings: 50 return flights London-Berlin → Scope 3 (Category 6: Business Travel)
- Employee commuting: 200 employees, average 5,000 miles/year → Scope 3 (Category 7: Employee Commuting) (optional)
SECR Requirement: Must report Scope 1 (gas + fleet) and Scope 2 (electricity). Business travel (Scope 3) is optional.
Example 2: Manufacturing Company
Business: Small electronics manufacturer with factory and warehouse
Emissions:
- Factory electricity: 500,000 kWh → Scope 2
- Factory natural gas: 200,000 kWh → Scope 1
- Warehouse forklift diesel: 5,000 litres → Scope 1
- Air conditioning refrigerant leakage: 10 kg R410A → Scope 1
- Inbound freight from suppliers: 100 tonnes delivered by supplier trucks → Scope 3 (Category 4: Upstream Transportation) (optional)
- Waste sent to landfill: 50 tonnes → Scope 3 (Category 5: Waste) (optional)
SECR Requirement: Must report Scope 1 (gas + diesel + refrigerants) and Scope 2 (electricity).
Example 3: Retail Business
Business: Retail chain with 15 shops across the UK
Emissions:
- Shop electricity: 800,000 kWh → Scope 2
- Delivery vehicle fleet: 25 vans, 50,000 litres diesel → Scope 1
- Head office gas heating: 30,000 kWh → Scope 1
- Refrigeration units in shops: 20 kg refrigerant leakage → Scope 1
- Third-party courier deliveries to customers: 10,000 deliveries → Scope 3 (Category 9: Downstream Transportation) (optional)
- Employee cars used for business (mileage reimbursed): 100,000 business miles → Scope 3 (Category 6: Business Travel) (optional)
SECR Requirement: Must report Scope 1 (gas + delivery fleet + refrigerants) and Scope 2 (electricity).
Calculating Emissions: Step-by-Step
Here's the practical process for calculating emissions by scope for SECR reporting.
Step 1: Gather Energy Data
Collect 12 months of consumption data:
- Electricity bills: Total kWh consumed
- Gas bills: Total kWh or m³ consumed (convert to kWh)
- Fuel receipts: Litres of petrol, diesel, or other fuels
- Refrigerant records: kg of refrigerant topped up (indicates leakage)
Step 2: Obtain Current Conversion Factors
Download the latest UK Government GHG Conversion Factors published annually by DEFRA.
Key factors for 2025:
- Electricity (grid average): 0.21233 kgCO2e/kWh
- Natural gas: 0.18316 kgCO2e/kWh
- Diesel (average): 2.69 kgCO2e/litre
- Petrol (average): 2.17 kgCO2e/litre
Step 3: Calculate Scope 1 Emissions
For each Scope 1 source, multiply consumption by the appropriate conversion factor:
Natural gas: 80,000 kWh × 0.18316 kgCO2e/kWh ÷ 1,000 = 14.65 tCO2e
Diesel (vehicles): 20,000 litres × 2.69 kgCO2e/litre ÷ 1,000 = 53.80 tCO2e
Refrigerants: 10 kg × 2,088 GWP (R410A) ÷ 1,000 = 20.88 tCO2e
Total Scope 1: 14.65 + 53.80 + 20.88 = 89.33 tCO2e
Step 4: Calculate Scope 2 Emissions
Electricity: 150,000 kWh × 0.21233 kgCO2e/kWh ÷ 1,000 = 31.85 tCO2e
Total Scope 2: 31.85 tCO2e
Step 5: Calculate Scope 3 Emissions (Optional)
Business travel (flights): 50 return flights London-Berlin × 0.43 tCO2e/return flight = 21.50 tCO2e (using approximate flight emission factors)
Total Scope 3 (if reported): 21.50 tCO2e
Step 6: Calculate Total and Intensity Ratio
Total Scope 1 + 2: 89.33 + 31.85 = 121.18 tCO2e
Intensity ratio (if turnover is £10M): 121.18 ÷ 10 = 12.12 tCO2e per £M turnover
This is the information you'd include in your SECR report.
Common Mistakes in Emission Scope Classification
Mistake 1: Classifying Employee-Owned Vehicles as Scope 1
Wrong: "Our employees use their personal cars for business meetings. This is Scope 1 because it's for our business."
Right: Emissions from employee-owned vehicles used for business (even if you reimburse mileage) are Scope 3 (Category 6: Business Travel), not Scope 1.
Scope 1 rule: You must own or have operational control of the vehicle.
Mistake 2: Classifying Grid Electricity as Scope 1
Wrong: "We consume electricity in our building, so it's a direct emission - Scope 1."
Right: Purchased grid electricity is Scope 2 because the emissions occur at the power station, not at your facility.
Scope 1 electricity: Only if you generate electricity on-site (e.g., diesel generator) and consume it yourself. The diesel combustion is Scope 1.
Mistake 3: Including Upstream Fuel Emissions in Scope 1
Wrong: "We burn natural gas, so all emissions from producing and transporting that gas are Scope 1."
Right: Only the combustion of gas in your boiler is Scope 1. The emissions from extracting, processing, and transporting the gas to you are Scope 3 (Category 3: Fuel and Energy-Related Activities).
Mistake 4: Omitting Refrigerant Emissions
Wrong: "We only have air conditioning and refrigeration units. No fuel combustion, so no Scope 1 emissions."
Right: Refrigerant leakage produces Scope 1 emissions, often with very high global warming potentials. A small refrigerant leak can produce more emissions than significant fuel consumption.
Remember: Track refrigerant top-ups as a proxy for leakage.
Tools and Resources for Scope Calculations
Official UK Government Resources
- DEFRA Conversion Factors: Updated annually, essential for SECR compliance
- Companies House SECR Guidance: Official requirements and examples
- BEIS Guidance: Detailed methodology guidance for UK businesses
Automated SECR Platforms
Modern platforms like Comply Carbon automate scope classification and calculations:
- Upload energy bills (PDF or scanned)
- AI extracts consumption data automatically
- System applies correct conversion factors
- Emissions automatically categorized into correct scopes
- SECR-compliant report generated in minutes
This eliminates manual errors and ensures correct scope classification.
For more details on how to implement SECR compliance, see our complete SECR guide.
Future of Scope Reporting in SECR
Potential Regulatory Changes
UK regulations may evolve to require:
- Mandatory Scope 3 reporting: At least for key categories like business travel
- Scope 3 Category breakdown: Detailed reporting by Scope 3 category
- Enhanced methodology disclosure: More detailed explanation of assumptions and data quality
Growing Stakeholder Expectations
Even if not legally required, stakeholders increasingly expect:
- Comprehensive Scope 3 reporting: Investors want full value chain visibility
- Science-based reduction targets: Covering all scopes
- Supply chain engagement: Working with suppliers to reduce Scope 3
- Product carbon footprints: Understanding emissions from sold products
Forward-thinking businesses are already reporting Scope 3 voluntarily to get ahead of future requirements.
Conclusion
Understanding Scope 1, 2, and 3 emissions is fundamental to accurate SECR reporting and broader carbon accounting. The key distinctions are:
- Scope 1: Direct emissions from sources you own or control (fuel combustion, vehicles, refrigerants)
- Scope 2: Indirect emissions from purchased energy (grid electricity, heat, steam)
- Scope 3: All other indirect emissions in your value chain (business travel, supply chain, waste, etc.)
For SECR compliance, you must report Scope 1 and 2 emissions accurately using the GHG Protocol methodology and UK Government conversion factors. Scope 3 is currently optional but recommended for comprehensive carbon accounting.
By correctly classifying your emissions and using the right calculation methodology, you'll ensure SECR compliance while gaining valuable insights into your carbon footprint and opportunities for reduction.
Ready to simplify your emission calculations and SECR reporting? Get started with Comply Carbon to automate your scope classifications, calculations, and reporting in minutes with 100% accuracy guaranteed.
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